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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2998 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2998

To create clean energy jobs, achieve energy independence, reduce global 
      warming pollution and transition to a clean energy economy.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 23, 2009

Mr. Waxman (for himself and Mr. Markey of Massachusetts) introduced the 
   following bill; which was referred to the Committee on Energy and 
 Commerce, and in addition to the Committees on Foreign Affairs, Ways 
    and Means, Financial Services, Education and Labor, Science and 
   Technology, Transportation and Infrastructure, Natural Resources, 
Agriculture, Oversight and Government Reform, and the Judiciary, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL

 
To create clean energy jobs, achieve energy independence, reduce global 
      warming pollution and transition to a clean energy economy.

 

    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 ``American Clean 
Energy and Security Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. International participation.
                         TITLE I--CLEAN ENERGY

   Subtitle A--Combined Efficiency and Renewable Electricity Standard

Sec. 101. Combined efficiency and renewable electricity standard.
Sec. 102. Clarifying State authority to adopt renewable energy 
                            incentives.
              Subtitle B--Carbon Capture and Sequestration

Sec. 111. National strategy.
Sec. 112. Regulations for geologic sequestration sites.
        ``Sec. 813. Geologic sequestration sites.
Sec. 113. Studies and reports.
Sec. 114. Carbon capture and sequestration demonstration and early 
                            deployment program.
Sec. 115. Commercial deployment of carbon capture and sequestration 
                            technologies.
        ``Sec. 786. Commercial deployment of carbon capture and 
                            sequestration technologies.
Sec. 116. Performance standards for coal-fueled power plants.
        ``Sec. 812. Performance standards for new coal-fired power 
                            plants.
                    Subtitle C--Clean Transportation

Sec. 121. Electric vehicle infrastructure.
Sec. 122. Large-scale vehicle electrification program.
Sec. 123. Plug-in electric drive vehicle manufacturing.
Sec. 124. Investment in clean vehicles.
Sec. 125. Advanced technology vehicle manufacturing incentive loans.
Sec. 126. Amendment to renewable fuels standard.
Sec. 127. Open fuel standard.
Sec. 128. Diesel emissions reduction.
Sec. 129. Loan guarantees for projects to construct renewable fuel 
                            pipelines.
     Subtitle D--State Energy and Environment Development Accounts

Sec. 131. Establishment of SEED Accounts.
Sec. 132. Support of State renewable energy and energy efficiency 
                            programs.
Sec. 133. Support of Indian renewable energy and energy efficiency 
                            programs.
                   Subtitle E--Smart Grid Advancement

Sec. 141. Definitions.
Sec. 142.  Assessment of Smart Grid cost effectiveness in products.
Sec. 143. Inclusions of Smart Grid capability on appliance ENERGY GUIDE 
                            labels.
Sec. 144. Smart Grid peak demand reduction goals.
Sec. 145.  Reauthorization of energy efficiency public information 
                            program to include Smart Grid information.
Sec. 146. Inclusion of Smart Grid features in appliance rebate program.
                   Subtitle F--Transmission Planning

Sec. 151. Transmission planning.
Sec. 152. Net metering for Federal agencies.
Sec. 153. Support for qualified advanced electric transmission 
                            manufacturing plants, qualified high 
                            efficiency transmission property, and 
                            qualified advanced electric transmission 
                            property.
            Subtitle G--Technical Corrections to Energy Laws

Sec. 161. Technical corrections to Energy Independence and Security Act 
                            of 2007.
Sec. 162. Technical corrections to Energy Policy Act of 2005.
         Subtitle H--Energy and Efficiency Centers and Research

Sec. 171. Energy Innovation Hubs.
Sec. 172. Advanced energy research.
Sec. 173. Building Assessment Centers.
Sec. 174. Centers for Energy and Environmental Knowledge and Outreach.
             Subtitle I--Nuclear and Advanced Technologies

Sec. 181. Revisions to loan guarantee program authority.
Sec. 182. Purpose.
Sec. 183. Definitions.
Sec. 184. Clean energy investment fund.
Sec. 185. Energy technology deployment goals.
Sec. 186. Clean energy deployment administration.
Sec. 187. Direct support.
Sec. 188. Indirect support.
Sec. 189. Federal credit authority.
Sec. 190. General provisions.
Sec. 191. Conforming amendments.
                       Subtitle J--Miscellaneous

Sec. 195. Increased hydroelectric generation at existing Federal 
                            facilities.
Sec. 196. Clean technology business competition grant program.
Sec. 197. National Bioenergy Partnership.
Sec. 198. Office of Consumer Advocacy.
                      TITLE II--ENERGY EFFICIENCY

            Subtitle A--Building Energy Efficiency Programs

Sec. 201. Greater energy efficiency in building codes.
Sec. 202. Building retrofit program.
Sec. 203. Energy efficient manufactured homes.
Sec. 204. Building energy performance labeling program.
Sec. 205. Tree planting programs.
Sec. 206. Energy efficiency for data center buildings.
     Subtitle B--Lighting and Appliance Energy Efficiency Programs

Sec. 211. Lighting efficiency standards.
Sec. 212. Other appliance efficiency standards.
Sec. 213. Appliance efficiency determinations and procedures.
Sec. 214. Best-in-Class Appliances Deployment Program.
Sec. 215. WaterSense.
Sec. 216. Federal procurement of water efficient products.
Sec. 217. Water efficient product rebate programs.
Sec. 218. Certified stoves program.
Sec. 219. Energy Star standards.
                 Subtitle C--Transportation Efficiency

Sec. 221. Emissions standards.
                        ``Part B--Mobile Sources

        ``Sec. 821. Greenhouse gas emission standards for mobile 
                            sources.
Sec. 222. Greenhouse gas emissions reductions through transportation 
                            efficiency.
                   ``Part D--Transportation Emissions

        ``Sec. 841. Greenhouse gas emissions reductions through 
                            transportation efficiency.
Sec. 223. SmartWay transportation efficiency program.
        ``Sec. 822. SmartWay transportation efficiency program.
Sec. 224. State vehicle fleets.
           Subtitle D--Industrial Energy Efficiency Programs

Sec. 241. Industrial plant energy efficiency standards.
Sec. 242. Electric and thermal waste energy recovery award program.
Sec. 243. Clarifying election of waste heat recovery financial 
                            incentives.
Sec. 244. Motor market assessment and commercial awareness program.
Sec. 245. Motor efficiency rebate program.
   Subtitle E--Improvements in Energy Savings Performance Contracting

Sec. 251. Energy savings performance contracts.
                    Subtitle F--Public Institutions

Sec. 261. Public institutions.
Sec. 262. Community energy efficiency flexibility.
Sec. 263. Small community joint participation.
Sec. 264. Low income community energy efficiency program.
                       Subtitle G--Miscellaneous

Sec. 271. Energy efficient information and communications technologies.
Sec. 272. National energy efficiency goals.
Sec. 273. Affiliated island energy independence team.
Sec. 274. Product carbon disclosure program.
              TITLE III--REDUCING GLOBAL WARMING POLLUTION

Sec. 301. Short title.
             Subtitle A--Reducing Global Warming Pollution

Sec. 311. Reducing global warming pollution.
        ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

     ``Part A--Global Warming Pollution Reduction Goals and Targets

        ``Sec. 701. Findings and purpose.
        ``Sec. 702. Economy-wide reduction goals.
        ``Sec. 703. Reduction targets for specified sources.
        ``Sec. 704. Supplemental pollution reductions.
        ``Sec. 705. Review and program recommendations.
        ``Sec. 706. National Academy review.
        ``Sec. 707. Presidential response and recommendations.
       ``Part B--Designation and Registration of Greenhouse Gases

        ``Sec. 711. Designation of greenhouse gases.
        ``Sec. 712. Carbon dioxide equivalent value of greenhouse 
                            gases.
        ``Sec. 713. Greenhouse gas registry.
                        ``Part C--Program Rules

        ``Sec. 721. Emission allowances.
        ``Sec. 722. Prohibition of excess emissions.
        ``Sec. 723. Penalty for noncompliance.
        ``Sec. 724. Trading.
        ``Sec. 725. Banking and borrowing.
        ``Sec. 726. Strategic reserve.
        ``Sec. 727. Permits.
        ``Sec. 728. International emission allowances.
                           ``Part D--Offsets

        ``Sec. 731. Offsets Integrity Advisory Board.
        ``Sec. 732. Establishment of offsets program.
        ``Sec. 733. Eligible project types.
        ``Sec. 734. Requirements for offset projects.
        ``Sec. 735. Approval of offset projects.
        ``Sec. 736. Verification of offset projects.
        ``Sec. 737. Issuance of offset credits.
        ``Sec. 738. Audits.
        ``Sec. 739. Program review and revision.
        ``Sec. 740. Early offset supply.
        ``Sec. 741. Environmental considerations.
        ``Sec. 742. Trading.
        ``Sec. 743. International offset credits.
 ``Part E--Supplemental Emissions Reductions From Reduced Deforestation

        ``Sec. 751. Definitions.
        ``Sec. 752. Findings.
        ``Sec. 753. Supplemental emissions reductions through reduced 
                            deforestation.
        ``Sec. 754. Requirements for international deforestation 
                            reduction program.
        ``Sec. 755. Reports and reviews.
        ``Sec. 756. Legal effect of part.
Sec. 312. Definitions.
        ``Sec. 700. Definitions.
                 Subtitle B--Disposition of Allowances

Sec. 321. Disposition of allowances for global warming pollution 
                            reduction program.
                  ``Part H--Disposition of Allowances

        ``Sec. 781. Allocation of allowances for supplemental 
                            reductions.
        ``Sec. 782. Allocation of emission allowances.
        ``Sec. 783. Electricity consumers.
        ``Sec. 784. Natural gas consumers.
        ``Sec. 785. Home heating oil, propane, and kerosene consumers.
        ``Sec. 787. Allocations to refineries.
        ``Sec. 788. [SECTION RESERVED].
        ``Sec. 789. Climate change consumer refunds.
        ``Sec. 790. Exchange for State-issued allowances.
        ``Sec. 791. Auction procedures.
        ``Sec. 792. Auctioning allowances for other entities.
        ``Sec. 793. Establishment of funds.
        ``Sec. 794. Oversight of allocations.
            Subtitle C--Additional Greenhouse Gas Standards

Sec. 331. Greenhouse gas standards.
           ``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

        ``Sec. 801. Definitions.
                 ``Part A--Stationary Source Standards

        ``Sec. 811. Standards of performance.
                ``Part C--Exemptions From Other Programs

        ``Sec. 831. Criteria pollutants.
        ``Sec. 832. International air pollution.
        ``Sec. 833. Hazardous air pollutants.
        ``Sec. 834. New source review.
        ``Sec. 835. Title V permits.
Sec. 332. HFC Regulation.
Sec. 333. Black carbon.
                         ``Part E--Black Carbon

        ``Sec. 851. Black carbon.
Sec. 334. States.
Sec. 335. State programs.
                        ``Part F--Miscellaneous

        ``Sec. 861. State programs.
        ``Sec. 862. Grants for support of air pollution control 
                            programs.
Sec. 336. Enforcement.
Sec. 337. Conforming amendments.
Sec. 338. Davis-Bacon compliance.
Sec. 339. National strategy for domestic biological carbon 
                            sequestration.
                  Subtitle D--Carbon Market Assurance

Sec. 341. Carbon market assurance.
                Subtitle E--Additional Market Assurance

Sec. 351. Regulation of certain transactions in derivatives involving 
                            energy commodities.
Sec. 352. No effect on authority of the Federal Energy Regulatory 
                            Commission.
Sec. 353. Inspector General of the Commodity Futures Trading 
                            Commission.
Sec. 354. Settlement and clearing through registered derivatives 
                            clearing organizations.
Sec. 355. Limitation on eligibility to purchase a credit default swap.
Sec. 356. Transaction fees.
Sec. 357. No effect on antitrust law or authority of the Federal Trade 
                            Commission.
Sec. 358. Regulation of carbon derivatives markets.
Sec. 359. Cease-and-desist authority.
           TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

      Subtitle A--Ensuring Real Reductions in Industrial Emissions

Sec. 401. Ensuring real reductions in industrial emissions.
       ``Part F--Ensuring Real Reductions in Industrial Emissions

        ``Sec. 761. Purposes.
        ``Sec. 762. International negotiations.
        ``Sec. 763. Definitions.
             ``subpart 1--emission allowance rebate program

        ``Sec. 764. Eligible industrial sectors.
        ``Sec. 765. Distribution of emission allowance rebates.
          ``subpart 2--international reserve allowance program

        ``Sec. 766. International reserve allowance program.
                ``subpart 3--presidential determination

        ``Sec. 767. Presidential reports and determinations.
              Subtitle B--Green Jobs and Worker Transition

                           Part 1--Green Jobs

Sec. 421. Clean energy curriculum development grants.
Sec. 422. Increased funding for energy worker training program.
          Part 2--Climate Change Worker Adjustment Assistance

Sec. 425. Petitions, eligibility requirements, and determinations.
Sec. 426. Program benefits.
Sec. 427. General provisions.
                    Subtitle C--Consumer Assistance

Sec. 431. Energy refund program.
Sec. 432. Modification of earned income credit amount for individuals 
                            with no qualifying children.
Sec. 433. Protection of Social Security and Medicare trust funds.
                 Subtitle D--Exporting Clean Technology

Sec. 441. Findings and purposes.
Sec. 442. Definitions.
Sec. 443. Governance.
Sec. 444. Determination of eligible countries.
Sec. 445. Qualifying activities.
Sec. 446. Assistance.
                 Subtitle E--Adapting to Climate Change

                      Part 1--Domestic Adaptation

         subpart a--national climate change adaptation program

Sec. 451. Global change research and data management.
Sec. 452. National Climate Service.
Sec. 453. State programs to build resilience to climate change impacts.
              subpart b--public health and climate change

Sec. 461. Sense of Congress on public health and climate change.
Sec. 462. Relationship to other laws.
Sec. 463. National strategic action plan.
Sec. 464. Advisory board.
Sec. 465. Reports.
Sec. 466. Definitions.
Sec. 467. Climate Change Health Protection and Promotion Fund.
                 subpart c--natural resource adaptation

Sec. 471. Purposes.
Sec. 472. Natural resources climate change adaptation policy.
Sec. 473. Definitions.
Sec. 474. Council on Environmental Quality.
Sec. 475. Natural Resources Climate Change Adaptation Panel.
Sec. 476. Natural Resources Climate Change Adaptation Strategy.
Sec. 477. Natural resources adaptation science and information.
Sec. 478. Federal natural resource agency adaptation plans.
Sec. 479. State natural resources adaptation plans.
Sec. 480. Natural Resources Climate Change Adaptation Fund.
Sec. 481. National Wildlife Habitat and Corridors Information Program.
Sec. 482. Additional provisions regarding Indian tribes.
        Part 2--International Climate Change Adaptation Program

Sec. 491. Findings and purposes.
Sec. 492. Definitions.
Sec. 493. International Climate Change Adaptation Program.
Sec. 494. Distribution of allowances.
Sec. 495. Bilateral assistance.

SEC. 2. DEFINITIONS.

    For purposes of this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) State.--The term ``State'' has the meaning given that 
        term in section 302 of the Clean Air Act.

SEC. 3. INTERNATIONAL PARTICIPATION.

    The Administrator, in consultation with the Department of State and 
the United States Trade Representative, shall annually prepare and 
certify a report to the Congress regarding whether China and India have 
adopted greenhouse gas emissions standards at least as strict as those 
standards required under this Act. If the Administrator determines that 
China and India have not adopted greenhouse gas emissions standards at 
least as stringent as those set forth in this Act, the Administrator 
shall notify each Member of Congress of his determination, and shall 
release his determination to the media.

                         TITLE I--CLEAN ENERGY

   Subtitle A--Combined Efficiency and Renewable Electricity Standard

SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.

    (a) In General.--Title VI of the Public Utility Regulatory Policies 
Act of 1978 (16 U.S.C. 2601 and following) is amended by adding at the 
end the following:

``SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.

    ``(a) Definitions.--For purposes of this section:
            ``(1) CHP savings.--The term `CHP savings' means--
                    ``(A) CHP system savings from a combined heat and 
                power system that commences operation after the date of 
                enactment of this section; and
                    ``(B) the increase in CHP system savings from, at 
                any time after the date of the enactment of this 
                section, upgrading, replacing, expanding, or increasing 
                the utilization of a combined heat and power system 
                that commenced operation on or before the date of 
                enactment of this section.
            ``(2) CHP system savings.--The term `CHP system savings' 
        means the increment of electric output of a combined heat and 
        power system that is attributable to the higher efficiency of 
        the combined system (as compared to the efficiency of separate 
        production of the electric and thermal outputs).
            ``(3) Combined heat and power system.--The term `combined 
        heat and power system' means a system that uses the same energy 
        source both for the generation of electrical or mechanical 
        power and the production of steam or another form of useful 
        thermal energy, provided that--
                    ``(A) the system meets such requirements relating 
                to efficiency and other operating characteristics as 
                the Commission may promulgate by regulation; and
                    ``(B) the net sales of electricity by the facility 
                to customers not consuming the thermal output from that 
                facility will not exceed 50 percent of total annual 
                electric generation by the facility.
            ``(4) Customer facility savings.--The term `customer 
        facility savings' means a reduction in end-use electricity 
        consumption (including recycled energy savings) at a facility 
        of an end-use consumer of electricity served by a retail 
        electric supplier, as compared to--
                    ``(A) in the case of a new facility, consumption at 
                a reference facility of average efficiency;
                    ``(B) in the case of an existing facility, 
                consumption at such facility during a base period, 
                except as provided in subparagraphs (C) and (D);
                    ``(C) in the case of new equipment that replaces 
                existing equipment with remaining useful life, the 
                projected consumption of the existing equipment for the 
                remaining useful life of such equipment, and 
                thereafter, consumption of new equipment of average 
                efficiency of the same equipment type; and
                    ``(D) in the case of new equipment that replaces 
                existing equipment at the end of the useful life of the 
                existing equipment, consumption by new equipment of 
                average efficiency of the same equipment type.
            ``(5) Distributed renewable generation facility.--The term 
        `distributed renewable generation facility' means a facility 
        that--
                    ``(A) generates renewable electricity;
                    ``(B) primarily serves 1 or more electricity 
                consumers at or near the facility site; and
                    ``(C) is no greater than--
                            ``(i) 2 megawatts in capacity; or
                            ``(ii) 4 megawatts in capacity, in the case 
                        of a facility that is placed in service after 
                        the date of enactment of this section and 
                        generates electricity from a renewable energy 
                        resource other than by means of combustion.
            ``(6) Electricity savings.--The term `electricity savings' 
        means reductions in electricity consumption, relative to 
        business-as-usual projections, achieved through measures 
        implemented after the date of enactment of this section, 
        limited to--
                    ``(A) customer facility savings of electricity, 
                adjusted to reflect any associated increase in fuel 
                consumption at the facility;
                    ``(B) reductions in distribution system losses of 
                electricity achieved by a retail electricity 
                distributor, as compared to losses attributable to new 
                or replacement distribution system equipment of average 
                efficiency;
                    ``(C) CHP savings; and
                    ``(D) fuel cell savings.
            ``(7) Federal land.--The term `Federal land' means land 
        owned by the United States, other than land held in trust for 
        an Indian or Indian tribe.
            ``(8) Federal renewable electricity credit.--The term 
        `Federal renewable electricity credit' means a credit, 
        representing one megawatt hour of renewable electricity, issued 
        pursuant to subsection (e).
            ``(9) Fuel cell.--The term `fuel cell' means a device that 
        directly converts the chemical energy of a fuel and an oxidant 
        into electricity by electrochemical processes occurring at 
        separate electrodes in the device.
            ``(10) Fuel cell savings.--The term `fuel cell savings' 
        means the electricity saved by a fuel cell that is installed 
        after the date of enactment of this section, or by upgrading a 
        fuel cell that commenced operation on or before the date of 
        enactment of this section, as a result of the greater 
        efficiency with which the fuel cell transforms fuel into 
        electricity as compared with sources of electricity delivered 
        through the grid, provided that--
                    ``(A) the fuel cell meets such requirements 
                relating to efficiency and other operating 
                characteristics as the Commission may promulgate by 
                regulation; and
                    ``(B) the net sales of electricity from the fuel 
                cell to customers not consuming the thermal output from 
                the fuel cell, if any, do not exceed 50 percent of the 
                total annual electricity generation by the fuel cell.
            ``(11) High conservation priority land.--The term `high 
        conservation priority land' means land that is not Federal land 
        and is--
                    ``(A) globally or State ranked as critically 
                imperiled or imperiled under a State Natural Heritage 
                Program; or
                    ``(B) old-growth or late-successional forest, as 
                identified by the office of the relevant State Forester 
                or relevant State agency with regulatory jurisdiction 
                over forestry activities.
            ``(12) Other qualifying energy resource.--The term `other 
        qualifying energy resource' means any of the following:
                    ``(A) Landfill gas.
                    ``(B) Wastewater treatment gas.
                    ``(C) Coal mine methane used to generate 
                electricity at or near the mine mouth.
                    ``(D) Qualified waste-to-energy.
            ``(13) Qualified hydropower.--The term `qualified 
        hydropower' means--
                    ``(A) energy produced from increased efficiency 
                achieved, or additions of capacity made, on or after 
                January 1, 1992, at a hydroelectric facility that was 
                placed in service before that date and does not include 
                additional energy generated as a result of operational 
                changes not directly associated with efficiency 
                improvements or capacity additions; or
                    ``(B) energy produced from generating capacity 
                added to a dam on or after January 1, 1992, provided 
                that the Commission certifies that--
                            ``(i) the dam was placed in service before 
                        the date of the enactment of this section and 
                        was operated for flood control, navigation, or 
                        water supply purposes and was not producing 
                        hydroelectric power prior to the addition of 
                        such capacity;
                            ``(ii) the hydroelectric project installed 
                        on the dam is licensed (or is exempt from 
                        licensing) by the Commission and is in 
                        compliance with the terms and conditions of the 
                        license or exemption, and with other applicable 
                        legal requirements for the protection of 
                        environmental quality, including applicable 
                        fish passage requirements; and
                            ``(iii) the hydroelectric project installed 
                        on the dam is operated so that the water 
                        surface elevation at any given location and 
                        time that would have occurred in the absence of 
                        the hydroelectric project is maintained, 
                        subject to any license or exemption 
                        requirements that require changes in water 
                        surface elevation for the purpose of improving 
                        the environmental quality of the affected 
                        waterway.
            ``(14) Qualified waste-to-energy.--The term `qualified 
        waste-to-energy' means energy from the combustion of municipal 
        solid waste or construction, demolition, or disaster debris, or 
        from the gasification or pyrolization of such waste or debris 
        and the combustion of the resulting gas at the same facility, 
        provided that--
                    ``(A) such term shall include only the energy 
                derived from the non-fossil biogenic portion of such 
                waste or debris;
                    ``(B) the Commission determines, with the 
                concurrence of the Administrator of the Environmental 
                Protection Agency, that the total lifecycle greenhouse 
                gas emissions attributable to the generation of 
                electricity from such waste or debris are lower than 
                those attributable to the likely alternative method of 
                disposing of such waste or debris; and
                    ``(C) the owner or operator of the facility 
                generating electricity from such energy provides to the 
                Commission, on an annual basis--
                            ``(i) a certification that the facility is 
                        in compliance with all applicable State, 
                        tribal, and Federal environmental permits;
                            ``(ii) in the case of a facility that 
                        commenced operation before the date of 
                        enactment of this section, a certification that 
                        the facility meets emissions standards 
                        promulgated under sections 112 or 129 of the 
                        Clean Air Act (42 U.S.C. 7412 or 7429) that 
                        apply as of the date of enactment of this 
                        section to new facilities within the relevant 
                        source category; and
                            ``(iii) in the case of the combustion, 
                        pyrolization, or gasification of municipal 
                        solid waste, a certification that each local 
                        government unit from which such waste 
                        originates operates, participates in the 
                        operation of, contracts for, or otherwise 
                        provides for, recycling services for its 
                        residents.
            ``(15) Recycled energy savings.--The term `recycled energy 
        savings' means a reduction in electricity consumption that 
        results from a modification of an industrial or commercial 
        system that commenced operation before the date of enactment of 
        this section, in order to recapture electrical, mechanical, or 
        thermal energy that would otherwise be wasted.
            ``(16) Renewable biomass.--The term `renewable biomass' 
        means any of the following:
                    ``(A) Plant material, including waste material, 
                harvested or collected from actively managed 
                agricultural land that was in cultivation, cleared, or 
                fallow and nonforested on January 1, 2009.
                    ``(B) Plant material, including waste material, 
                harvested or collected from pastureland that was 
                nonforested on January 1, 2009.
                    ``(C) Nonhazardous vegetative matter derived from 
                waste, including separated yard waste, landscape right-
                of-way trimmings, construction and demolition debris or 
                food waste (but not municipal solid waste, recyclable 
                waste paper, painted, treated or pressurized wood, or 
                wood contaminated with plastic or metals).
                    ``(D) Animal waste or animal byproducts, including 
                products of animal waste digesters.
                    ``(E) Algae.
                    ``(F) Trees, brush, slash, residues, or any other 
                vegetative matter removed from within 600 feet of any 
                building, campground, or route designated for 
                evacuation by a public official with responsibility for 
                emergency preparedness, or from within 300 feet of a 
                paved road, electric transmission line, utility tower, 
                or water supply line.
                    ``(G) Residues from or byproducts of milled logs.
                    ``(H) Any of the following removed from forested 
                land that is not Federal and is not high conservation 
                priority land:
                            ``(i) Trees, brush, slash, residues, 
                        interplanted energy crops, or any other 
                        vegetative matter removed from an actively 
                        managed tree plantation established--
                                    ``(I) prior to January 1, 2009; or
                                    ``(II) on land that, as of January 
                                1, 2009, was cultivated or fallow and 
                                non-forested.
                            ``(ii) Trees, logging residue, thinnings, 
                        cull trees, pulpwood, and brush removed from 
                        naturally-regenerated forests or other non-
                        plantation forests, including for the purposes 
                        of hazardous fuel reduction or preventative 
                        treatment for reducing or containing insect or 
                        disease infestation.
                            ``(iii) Logging residue, thinnings, cull 
                        trees, pulpwood, brush and species that are 
                        non-native and noxious, from stands that were 
                        planted and managed after January 1, 2009, to 
                        restore or maintain native forest types.
                            ``(iv) Dead or severely damaged trees 
                        removed within 5 years of fire, blowdown, or 
                        other natural disaster, and badly infested 
                        trees.
                    ``(I) Materials, pre-commercial thinnings, or 
                removed invasive species from National Forest System 
                land and public lands (as defined in section 103 of the 
                Federal Land Policy and Management Act of 1976 (43 
                U.S.C. 1702)), including those that are byproducts of 
                preventive treatments (such as trees, wood, brush, 
                thinnings, chips, and slash), that are removed as part 
                of a federally recognized timber sale, or that are 
                removed to reduce hazardous fuels, to reduce or contain 
                disease or insect infestation, or to restore ecosystem 
                health, and that are--
                            ``(i) not from components of the National 
                        Wilderness Preservation System, Wilderness 
                        Study Areas, Inventoried Roadless Areas, old 
                        growth or mature forest stands, components of 
                        the National Landscape Conservation System, 
                        National Monuments, National Conservation 
                        Areas, Designated Primitive Areas, or Wild and 
                        Scenic Rivers corridors;
                            ``(ii) harvested in environmentally 
                        sustainable quantities, as determined by the 
                        appropriate Federal land manager; and
                            ``(iii) harvested in accordance with 
                        Federal and State law and applicable land 
                        management plans.
            ``(17) Renewable electricity.--The term `renewable 
        electricity' means electricity generated (including by means of 
        a fuel cell) from a renewable energy resource or other 
        qualifying energy resources.
            ``(18) Renewable energy resource.--The term `renewable 
        energy resource' means each of the following:
                    ``(A) Wind energy.
                    ``(B) Solar energy.
                    ``(C) Geothermal energy.
                    ``(D) Renewable biomass.
                    ``(E) Biogas derived exclusively from renewable 
                biomass.
                    ``(F) Biofuels derived exclusively from renewable 
                biomass.
                    ``(G) Qualified hydropower.
                    ``(H) Marine and hydrokinetic renewable energy, as 
                that term is defined in section 632 of the Energy 
                Independence and Security Act of 2007 (42 U.S.C. 
                17211).
            ``(19) Retail electric supplier.--
                    ``(A) In general.--The term `retail electric 
                supplier' means, for any given year, an electric 
                utility that sold not less than 4,000,000 megawatt 
                hours of electric energy to electric consumers for 
                purposes other than resale during the preceding 
                calendar year.
                    ``(B) Inclusions and limitations.--For purposes of 
                determining whether an electric utility qualifies as a 
                retail electric supplier under subparagraph (A)--
                            ``(i) the sales of any affiliate of an 
                        electric utility to electric consumers, other 
                        than sales to the affiliate's lessees or 
                        tenants, for purposes other than resale shall 
                        be considered to be sales of such electric 
                        utility; and
                            ``(ii) sales by any electric utility to an 
                        affiliate, lessee, or tenant of such electric 
                        utility shall not be treated as sales to 
                        electric consumers.
                    ``(C) Affiliate.--For purposes of this paragraph, 
                the term `affiliate' when used in relation to a person, 
                means another person that directly or indirectly owns 
                or controls, is owned or controlled by, or is under 
                common ownership or control with, such person, as 
                determined under regulations promulgated by the 
                Commission.
            ``(20) Retail electric supplier's base amount.--The term 
        `retail electric supplier's base amount' means the total amount 
        of electric energy sold by the retail electric supplier, 
        expressed in megawatt hours, to electric customers for purposes 
        other than resale during the relevant calendar year, 
        excluding--
                    ``(A) electricity generated by a hydroelectric 
                facility that is not qualified hydropower;
                    ``(B) electricity generated by a nuclear generating 
                unit placed in service after the date of enactment of 
                this section; and
                    ``(C) the proportion of electricity generated by a 
                fossil-fueled generating unit that is equal to the 
                proportion of greenhouse gases produced by such unit 
                that are captured and geologically sequestered.
            ``(21) Retire and retirement.--The terms `retire' and 
        `retirement' with respect to a Federal renewable electricity 
        credit, means to disqualify such credit for any subsequent use 
        under this section, regardless of whether the use is a sale, 
        transfer, exchange, or submission in satisfaction of a 
        compliance obligation.
            ``(22) Third-party efficiency provider.--The term `third-
        party efficiency provider' means any retailer, building owner, 
        energy service company, financial institution or other 
        commercial, industrial or nonprofit entity that is capable of 
        providing electricity savings in accordance with the 
        requirements of this section.
            ``(23) Total annual electricity savings.--The term `total 
        annual electricity savings' means electricity savings during a 
        specified calendar year from measures implemented since the 
        date of the enactment of this section, taking into account 
        verified measure lifetimes or verified annual savings attrition 
        rates, as determined in accordance with such regulations as the 
        Commission may promulgate and measured in megawatt hours.
    ``(b) Annual Compliance Obligation.--
            ``(1) In general.--For each of calendar years 2012 through 
        2039, not later than March 31 of the following calendar year, 
        each retail electric supplier shall submit to the Commission an 
        amount of Federal renewable electricity credits and 
        demonstrated total annual electricity savings that, in the 
        aggregate, is equal to such retail electric supplier's annual 
        combined target as set forth in subsection (d), except as 
        otherwise provided in subsection (g).
            ``(2) Demonstration of savings.--For purposes of this 
        subsection, submission of demonstrated total annual electricity 
        savings means submission of a report that demonstrates, in 
        accordance with the requirements of subsection (f), the total 
        annual electricity savings achieved by the retail electric 
        supplier within the relevant compliance year.
            ``(3) Renewable electricity credits portion.--Except as 
        provided in paragraph (4), each retail electric supplier must 
        submit Federal renewable electricity credits equal to at least 
        three quarters of the retail electric supplier's annual 
        combined target.
            ``(4) State petition.--
                    ``(A) In general.--Upon written request from the 
                Governor of any State (including, for purposes of this 
                paragraph, the Mayor of the District of Columbia), the 
                Commission shall increase, to not more than two fifths, 
                the proportion of the annual combined targets of retail 
                electric suppliers located within such State that may 
                be met through submission of demonstrated total annual 
                electricity savings, provided that such increase shall 
                be effective only with regard to the portion of a 
                retail electric supplier's annual combined target that 
                is attributable to electricity sales within such State.
                    ``(B) Contents.--A Governor's request under this 
                paragraph shall include an explanation of the 
                Governor's rationale for determining, after 
                consultation with the relevant State regulatory 
                authority and other retail electricity ratemaking 
                authorities within the State, to make such request. The 
                request shall specify the maximum proportion of annual 
                combined targets (not more than two fifths) that can be 
                met through demonstrated total annual electricity 
                savings, and the period for which such proportion shall 
                be effective.
                    ``(C) Revision.--The Governor of any State may, 
                after consultation with the relevant State regulatory 
                authority and other retail electricity ratemaking 
                authorities within the State, submit a written request 
                for revocation or revision of a previous request 
                submitted under this paragraph. The Commission shall 
                grant such request, provided that--
                            ``(i) any revocation or revision shall not 
                        apply to the combined annual target for any 
                        year that is any earlier than 2 calendar years 
                        after the calendar year in which such request 
                        is submitted, so as to provide retail electric 
                        suppliers with adequate notice of such change; 
                        and
                            ``(ii) any revision shall meet the 
                        requirements of subparagraph (A).
    ``(c) Establishment of Program.--Not later than 1 year after the 
date of enactment of this section, the Commission shall promulgate 
regulations to implement and enforce the requirements of this section. 
In promulgating such regulations, the Commission shall, to the extent 
practicable--
            ``(1) preserve the integrity, and incorporate best 
        practices, of existing State and tribal renewable electricity 
        and energy efficiency programs;
            ``(2) rely upon existing and emerging State, tribal, or 
        regional tracking systems that issue and track non-Federal 
        renewable electricity credits; and
            ``(3) cooperate with the States and Indian tribes to 
        facilitate coordination between State, tribal, and Federal 
        renewable electricity and energy efficiency programs and to 
        minimize administrative burdens and costs to retail electric 
        suppliers.
    ``(d) Annual Compliance Requirement.--
            ``(1) Annual combined targets.--For each of calendar years 
        2012 through 2039, a retail electric supplier's annual combined 
        target shall be the product of--
                    ``(A) the required annual percentage for such year, 
                as set forth in paragraph (2); and
                    ``(B) the retail electric supplier's base amount 
                for such year.
            ``(2) Required annual percentage.--For each of calendar 
        years 2012 through 2039, the required annual percentage shall 
        be as follows:

 
            ``Calendar year                 Required annual percentage
 
2012...................................  6.0
2013...................................  6.0
2014...................................  9.5
2015...................................  9.5
2016...................................  13.0
2017...................................  13.0
2018...................................  16.5
2019...................................  16.5
2020...................................  20.0
2021 through 2039......................  20.0
 

    ``(e) Federal Renewable Electricity Credits.--
            ``(1) In general.--The regulations promulgated under this 
        section shall include provisions governing the issuance, 
        tracking, and verification of Federal renewable electricity 
        credits. Except as provided in paragraphs (2), (3), and (4) of 
        this subsection, the Commission shall issue to each generator 
        of renewable electricity, 1 Federal renewable electricity 
        credit for each megawatt hour of renewable electricity 
        generated by such generator after December 31, 2011. The 
        Commission shall assign a unique serial number to each Federal 
        renewable electricity credit.
            ``(2) Generation from certain state renewable electricity 
        programs.--Where renewable electricity is generated with the 
        support of payments from a retail electric supplier pursuant to 
        a State renewable electricity program (whether through State 
        alternative compliance payments or through payments to a State 
        renewable electricity procurement fund or entity), the 
        Commission shall issue Federal renewable electricity credits to 
        such retail electric supplier for the proportion of the 
        relevant renewable electricity generation that is attributable 
        to the retail electric supplier's payments, as determined 
        pursuant to regulations issued by the Commission. For any 
        remaining portion of the relevant renewable electricity 
        generation, the Commission shall issue Federal renewable 
        electricity credits to the generator, as provided in paragraph 
        (1), except that in no event shall more than 1 Federal 
        renewable electricity credit be issued for the same megawatt 
        hour of electricity. In determining how Federal renewable 
        electricity credits will be apportioned among retail electric 
        suppliers and generators in such circumstances, the Commission 
        shall consider information and guidance furnished by the 
        relevant State or States.
            ``(3) Certain power sales contracts.--When a generator has 
        sold renewable electricity to a retail electric supplier under 
        a contract for power from a facility placed in service before 
        the date of enactment of this section, and the contract does 
        not provide for the determination of ownership of the Federal 
        renewable electricity credits associated with such generation, 
        the Commission shall issue such Federal renewable electricity 
        credits to the retail electric supplier for the duration of the 
        contract.
            ``(4) Credit multiplier for distributed renewable 
        generation.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Commission shall issue 3 Federal 
                renewable electricity credits for each megawatt hour of 
                renewable electricity generated by a distributed 
                renewable generation facility.
                    ``(B) Adjustment.--Except as provided in 
                subparagraph (C), not later than January 1, 2014, and 
                not less frequently than every 4 years thereafter, the 
                Commission shall review the effect of this paragraph 
                and shall, as necessary, reduce the number of Federal 
                renewable electricity credits per megawatt hour issued 
                under this paragraph for any given energy source or 
                technology, but not below 1, to ensure that such number 
                is no higher than the Commission determines is 
                necessary to make distributed renewable generation 
                facilities using such source or technology cost 
                competitive with other sources of renewable electricity 
                generation.
                    ``(C) Facilities placed in service after 
                enactment.--For any distributed renewable generation 
                facility placed in service after the date of enactment 
                of this section, subparagraph (B) shall not apply for 
                the first 10 years after the date on which the facility 
                is placed in service. For each year during such 10-year 
                period, the Commission shall issue to the facility the 
                same number of Federal renewable electricity credits 
                per megawatt hour as are issued to that facility in the 
                year in which such facility is placed in service. After 
                such 10-year period, the Commission shall issue Federal 
                renewable electricity credits to the facility in 
                accordance with the current multiplier as determined 
                pursuant to subparagraph (B).
            ``(5) Credits based on qualified hydropower.--For purposes 
        of this subsection, the number of Federal renewable electricity 
        credits issued for qualified hydropower shall be calculated--
                    ``(A) based solely on the increase in average 
                annual generation directly resulting from the 
                efficiency improvements or capacity additions described 
                in subsection (a)(13)(A); and
                    ``(B) using the same water flow information used to 
                determine a historic average annual generation baseline 
                for the hydroelectric facility, as certified by the 
                Commission.
            ``(6) Generation from qualified waste-to-energy.--In the 
        case of electricity generated from the combustion of any 
        municipal solid waste or construction, demolition, or disaster 
        debris that is included in the definition of renewable biomass, 
        or from the gasification or pyrolization of such waste or 
        debris and the combustion of the resulting gas at the same 
        facility, the Commission shall issue Federal renewable 
        electricity credits only for electricity generated from 
        qualified waste-to-energy.
            ``(7) Generation from mixed renewable and nonrenewable 
        resources.--If electricity is generated using both a renewable 
        energy resource or other qualifying energy resource and an 
        energy source that is not a renewable energy resource or other 
        qualifying energy resource (as, for example, in the case of co-
        firing of renewable biomass and fossil fuel), the Commission 
        shall issue Federal renewable electricity credits based on the 
        proportion of the electricity that is attributable to the 
        renewable energy resource or other qualifying energy resource.
            ``(8) Prohibition against double-counting.--Except as 
        provided in paragraph (4) of this subsection, the Commission 
        shall ensure that no more than 1 Federal renewable electricity 
        credit will be issued for any megawatt hour of renewable 
        electricity and that no Federal renewable electricity credit 
        will be used more than once for compliance with this section.
            ``(9) Trading.--The lawful holder of a Federal renewable 
        electricity credit may sell, exchange, transfer, submit for 
        compliance in accordance with subsection (b), or submit such 
        credit for retirement by the Commission.
            ``(10) Banking.--A Federal renewable electricity credit may 
        be submitted in satisfaction of the compliance obligation set 
        forth in subsection (b) for the compliance year in which the 
        credit was issued or for any of the 3 immediately subsequent 
        compliance years. The Commission shall retire any Federal 
        renewable electricity credit that has not been retired by April 
        2 of the calendar year that is 3 years after the calendar year 
        in which the credit was issued.
            ``(11) Retirement.--The Commission shall retire a Federal 
        renewable electricity credit immediately upon submission by the 
        lawful holder of such credit, whether in satisfaction of a 
        compliance obligation under subsection (b) or on some other 
        basis.
    ``(f) Electricity Savings.--
            ``(1) Standards for measurement of savings.--As part of the 
        regulations promulgated under this section, the Commission 
        shall prescribe standards and protocols for defining and 
        measuring electricity savings and total annual electricity 
        savings that can be counted towards the compliance obligation 
        set forth in subsection (b). Such protocols and standards 
        shall, at minimum--
                    ``(A) specify the types of energy efficiency and 
                energy conservation measures that can be counted;
                    ``(B) require that energy consumption estimates for 
                customer facilities or portions of facilities in the 
                applicable base and current years be adjusted, as 
                appropriate, to account for changes in weather, level 
                of production, and building area;
                    ``(C) account for the useful life of measures;
                    ``(D) include deemed savings values for specific, 
                commonly used measures;
                    ``(E) allow for savings from a program to be 
                estimated based on extrapolation from a representative 
                sample of participating customers;
                    ``(F) include procedures for counting CHP savings, 
                recycled energy savings, and fuel cell savings;
                    ``(G) include procedures for documenting measurable 
                and verifiable electricity savings achieved as a result 
                of market transformation efforts;
                    ``(H) include procedures for counting electricity 
                savings achieved by solar water heating and solar light 
                pipe technology that has the capability to provide 
                measurable data on the amount of megawatt-hours 
                displaced;
                    ``(I) avoid double-counting of savings used for 
                compliance with this section, including savings that 
                are transferred pursuant to paragraph (3);
                    ``(J) ensure that, except as provided in 
                subparagraph (L), the retail electric supplier claiming 
                the savings played a significant role in achieving the 
                savings (including through the activities of a 
                designated agent of the supplier or through the 
                purchase of transferred savings);
                    ``(K) include savings from programs administered by 
                a retail electric supplier (or a retail electricity 
                distributor that is not a retail electric supplier) 
                that are funded by State, Federal, or other sources;
                    ``(L) in any State in which the State regulatory 
                authority has designated 1 or more entities to 
                administer electric ratepayer-funded efficiency 
                programs approved by such State regulatory authority, 
                provide that electricity savings achieved through such 
                programs shall be distributed equitably among retail 
                electric suppliers in accordance with the direction of 
                the relevant State regulatory authority; and
                    ``(M) exclude savings achieved as a result of 
                compliance with mandatory appliance and equipment 
                efficiency standards or building codes.
            ``(2) Standards for third-party verification of savings.--
        The regulations promulgated under this section shall establish 
        procedures and standards requiring third-party verification of 
        all reported electricity savings, including requirements for 
        accreditation of third-party verifiers to ensure that such 
        verifiers are professionally qualified and have no conflicts of 
        interest.
            ``(3) Transfers of savings.--
                    ``(A) Bilateral contracts for savings transfers.--
                Subject to the limitations of this paragraph, a retail 
                electric supplier may use electricity savings 
                transferred, pursuant to a bilateral contract, from 
                another retail electric supplier, an owner of an 
                electric distribution facility that is not a retail 
                electric supplier, a State, or a third-party efficiency 
                provider to meet the applicable compliance obligation 
                under subsection (b).
                    ``(B) Requirements.--Electricity savings 
                transferred and used for compliance pursuant to this 
                paragraph shall be--
                            ``(i) measured and verified in accordance 
                        with the procedures specified under this 
                        subsection;
                            ``(ii) reported in accordance with 
                        paragraph (4) of this subsection; and
                            ``(iii) achieved within the same State as 
                        is served by the retail electric supplier.
                    ``(C) Regulatory approval.--Nothing in this 
                paragraph shall limit or affect the authority of a 
                State regulatory authority to require a retail electric 
                supplier that is regulated by such authority to obtain 
                such authority's authorization or approval of a 
                contract for transfer of savings under this paragraph.
            ``(4) Reporting savings.--
                    ``(A) Requirements.--The regulations promulgated 
                under this section shall establish requirements 
                governing the submission of reports to demonstrate, in 
                accordance with the protocols and standards for 
                measurement and third-party verification established 
                under this subsection, the total annual electricity 
                savings achieved by a retail electric supplier within 
                the relevant year.
                    ``(B) Review and approval.--The Commission shall 
                review each report submitted to the Commission by a 
                retail electric supplier and shall exclude any 
                electricity savings that have not been adequately 
                demonstrated in accordance with the requirements of 
                this subsection.
            ``(5) State administration.--
                    ``(A) Delegation of authority.--Upon receipt of an 
                application from the Governor of a State (including, 
                for purposes of this subsection, the Mayor of the 
                District of Columbia), the Commission may delegate to 
                the State the authority to review and verify reported 
                electricity savings for purposes of determining 
                demonstrated total annual electricity savings that may 
                be counted towards a retail electric supplier's 
                compliance obligation under subsection (b). The 
                Commission shall make a substantive determination 
                approving or disapproving a State application under 
                this subparagraph, after notice and comment, within 180 
                days of receipt of a complete application.
                    ``(B) Alternative measurement and verification 
                procedures and standards.--As part of an application 
                submitted under subparagraph (A), a State may request 
                to use alternative measurement and verification 
                procedures and standards to those specified in 
                paragraphs (1) and (2), provided the State demonstrates 
                that such alternative procedures and standards provide 
                a level of accuracy of measurement and verification at 
                least equivalent to the Federal procedures and 
                standards promulgated under paragraphs (1) and (2).
                    ``(C) Review of state implementation.--The 
                Commission shall, not less frequently than once every 4 
                years, review each State's implementation of delegated 
                authority under this paragraph to ensure conformance 
                with the requirements of this section. The Commission 
                may, at any time, revoke the delegation of authority 
                under this section upon a finding that the State is not 
                implementing its delegated responsibilities in 
                conformity with this paragraph. As a condition of 
                maintaining its delegated authority under this 
                paragraph, the Commission may require a State to submit 
                a revised application under subparagraph (A) if the 
                Commission has--
                            ``(i) promulgated new or substantially 
                        revised measurement and verification procedures 
                        and standards under this subsection; or
                            ``(ii) otherwise substantially revised the 
                        program established under this section.
    ``(g) Alternative Compliance Payments.--
            ``(1) In general.--A retail electric supplier may satisfy 
        the requirements of subsection (b) in whole or in part by 
        submitting in accordance with this subsection, in lieu of each 
        Federal renewable electricity credit or megawatt hour of 
        demonstrated total annual electricity savings that would 
        otherwise be due, a payment equal to $25, adjusted for 
        inflation on January 1 of each year following calendar year 
        2009, in accordance with such regulations as the Commission may 
        promulgate.
            ``(2) Payment to state funds.--Except as otherwise provided 
        in this paragraph, payments made under this subsection shall be 
        made directly to the State or States in which the retail 
        electric supplier is located, in proportion to the portion of 
        the retail electric supplier's base amount that is sold within 
        each relevant State, provided that such payments are deposited 
        directly into a fund in the State treasury established for this 
        purpose and that the State uses such funds in accordance with 
        paragraphs (3) and (4). If the Commission determines at any 
        time that a State is in substantial noncompliance with 
        paragraph (3) or (4), the Commission shall direct that any 
        future alternative compliance payments that would otherwise be 
        paid to such State under this subsection shall instead be paid 
        to the Commission and deposited in the United States Treasury.
            ``(3) State use of funds.--As a condition of continued 
        receipt of alternative compliance payments pursuant to this 
        subsection, a State shall use such payments exclusively for the 
        purposes of--
                    ``(A) deploying technologies that generate 
                electricity from renewable energy resources; or
                    ``(B) implementing cost-effective energy efficiency 
                programs to achieve electricity savings.
            ``(4) Reporting.--As a condition of continued receipt of 
        alternative compliance payments pursuant to this subsection, a 
        State shall, within 12 months of receipt of any such payments 
        and at 12-month intervals thereafter until such payments are 
        expended, provide a report to the Commission, in accordance 
        with such regulations as the Commission may prescribe, giving a 
        full accounting of the use of such payments, including a 
        detailed description of the activities funded thereby.
    ``(h) Information Collection.--The Commission may require any 
retail electric supplier, renewable electricity generator, or such 
other entities as the Commission deems appropriate, to provide any 
information the Commission determines appropriate to carry out this 
section. Failure to submit such information or submission of false or 
misleading information under this subsection shall be a violation of 
this section.
    ``(i) Enforcement and Judicial Review.--
            ``(1) Failure to submit credits or demonstrate savings.--If 
        any person fails to comply with the requirements of subsection 
        (b) or (g), such person shall be liable to pay to the 
        Commission a civil penalty equal to the product of--
                    ``(A) double the alternative compliance payment 
                calculated under subsection (g)(1), and
                    ``(B) the aggregate quantity of Federal renewable 
                electricity credits, total annual electricity savings, 
                or equivalent alternative compliance payments that the 
                person failed to submit in violation of the 
                requirements of subsections (b) and (g).
            ``(2) Enforcement.--The Commission shall assess a civil 
        penalty under paragraph (1) in accordance with the procedures 
        described in section 31(d) of the Federal Power Act (16 U.S.C. 
        823b(d)).
            ``(3) Violation of requirement of regulations or orders.--
        Any person who violates, or fails or refuses to comply with, 
        any requirement of a regulation promulgated or order issued 
        under this section shall be subject to a civil penalty under 
        section 316A(b) of the Federal Power Act (16 U.S.C. 825o-1). 
        Such penalty shall be assessed by the Commission in the same 
        manner as in the case of a violation referred to in section 
        316A(b) of such Act.
    ``(j) Judicial Review.--Any person aggrieved by a final action 
taken by the Commission under this section, other than the assessment 
of a civil penalty under subsection (i), may use the procedures for 
review described in section 313 of the Federal Power Act (16 U.S.C. 
825l). For purposes of this paragraph, references to an order in 
section 313 of such Act shall be deemed to refer also to all other 
final actions of the Commission under this section other than the 
assessment of a civil penalty under subsection (i).
    ``(k) Savings Provisions.--Nothing in this section shall--
            ``(1) diminish or qualify any authority of a State, a 
        political subdivision of a State, or an Indian tribe to--
                    ``(A) adopt or enforce any law or regulation 
                respecting renewable electricity or energy efficiency, 
                including any law or regulation establishing 
                requirements more stringent than those established by 
                this section, provided that no such law or regulation 
                may relieve any person of any requirement otherwise 
                applicable under this section; or
                    ``(B) regulate the acquisition and disposition of 
                Federal renewable electricity credits by retail 
                electric suppliers within the jurisdiction of such 
                State, political subdivision, or Indian tribe, 
                including the authority to require such retail electric 
                supplier to acquire and submit to the Secretary for 
                retirement Federal renewable electricity credits in 
                excess of those submitted under this section; or
            ``(2) affect the application of, or the responsibility for 
        compliance with, any other provision of law or regulation, 
        including environmental and licensing requirements.
    ``(l) Sunset.--This section expires on December 31, 2040.''.
    (b) Conforming Amendment.--The table of contents set forth in 
section 1(b) of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2601 and following) is amended by inserting after the item 
relating to section 609 the following:

``Sec. 610. Combined efficiency and renewable electricity standard.''.

SEC. 102. CLARIFYING STATE AUTHORITY TO ADOPT RENEWABLE ENERGY 
              INCENTIVES.

     Section 210 of the Public Utility Regulatory Policies Act of 1978 
is amended by adding at the end thereof:
    ``(o) Clarification of State Authority to Adopt Renewable Energy 
Incentives.--Notwithstanding any other provision of this Act or the 
Federal Power Act, a State legislature or regulatory authority may set 
the rates for a sale of electric energy by a facility generating 
electric energy from renewable energy sources pursuant to a State-
approved production incentive program under which the facility 
voluntarily sells electric energy. For purposes of this subsection, 
`State-approved production incentive program' means a requirement 
imposed pursuant to State law, or by a State regulatory authority 
acting within its authority under State law, that an electric utility 
purchase renewable energy (as defined in section 609 of this Act) at a 
specified rate.''.

              Subtitle B--Carbon Capture and Sequestration

SEC. 111. NATIONAL STRATEGY.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Administrator, in consultation with the Secretary of 
Energy, the Secretary of the Interior, and the heads of such other 
relevant Federal agencies as the President may designate, shall submit 
to Congress a report setting forth a unified and comprehensive strategy 
to address the key legal, regulatory and other barriers to the 
commercial-scale deployment of carbon capture and sequestration.
    (b) Barriers.-- The report under this section shall--
            (1) identify those regulatory, legal, and other gaps and 
        barriers that could be addressed by a Federal agency using 
        existing statutory authority, those, if any, that require 
        Federal legislation, and those that would be best addressed at 
        the State, tribal, or regional level;
            (2) identify regulatory implementation challenges, 
        including those related to approval of State and tribal 
        programs and delegation of authority for permitting; and
            (3) recommend rulemakings, Federal legislation, or other 
        actions that should be taken to further evaluate and address 
        such barriers.

SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION SITES.

    (a) Coordinated Certification and Permitting Process.--Title VIII 
of the Clean Air Act, as added by section 331 of this Act, is amended 
by adding after section 812 (as added by section 116 of this Act) the 
following:

``SEC. 813. GEOLOGIC SEQUESTRATION SITES.

    ``(a) Coordinated Process.--The Administrator shall establish a 
coordinated approach to certifying and permitting geologic 
sequestration, taking into consideration all relevant statutory 
authorities. In establishing such approach, the Administrator shall--
            ``(1) take into account, and reduce redundancy with, the 
        requirements of section 1421 of the Safe Drinking Water Act (42 
        U.S.C. 300h), as amended by section 112(b) of the American 
        Clean Energy and Security Act of 2009, including the rulemaking 
        for geologic sequestration wells described at 73 Fed. Reg. 
        43491-541 (July 25, 2008); and
            ``(2) to the extent practicable, reduce the burden on 
        certified entities and implementing authorities.
    ``(b) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to protect human health and the environment by minimizing the risk of 
escape to the atmosphere of carbon dioxide injected for purposes of 
geologic sequestration.
    ``(c) Requirements.--The regulations under subsection (b) shall 
include--
            ``(1) a process to obtain certification for geologic 
        sequestration under this section; and
            ``(2) requirements for--
                    ``(A) monitoring, record keeping, and reporting for 
                emissions associated with injection into, and escape 
                from, geologic sequestration sites, taking into account 
                any requirements or protocols developed under section 
                713;
                    ``(B) public participation in the certification 
                process that maximizes transparency;
                    ``(C) the sharing of data between States, Indian 
                tribes, and the Environmental Protection Agency; and
                    ``(D) other elements or safeguards necessary to 
                achieve the purpose set forth in subsection (b).
    ``(d) Report.--Not later than 2 years after the promulgation of 
regulations under subsection (b), and at 3-year intervals thereafter, 
the Administrator shall deliver to the Committee on Energy and Commerce 
of the House of Representatives and the Committee on Environment and 
Public Works of the Senate a report on geologic sequestration in the 
United States, and, to the extent relevant, other countries in North 
America. Such report shall include--
            ``(1) data regarding injection, emissions to the 
        atmosphere, if any, and performance of active and closed 
        geologic sequestration sites, including those where enhanced 
        hydrocarbon recovery operations occur;
            ``(2) an evaluation of the performance of relevant Federal 
        environmental regulations and programs in ensuring 
        environmentally protective geologic sequestration practices;
            ``(3) recommendations on how such programs and regulations 
        should be improved or made more effective; and
            ``(4) other relevant information.''.
    (b) Safe Drinking Water Act Standards.--Section 1421 of the Safe 
Drinking Water Act (42 U.S.C. 300h) is amended by inserting after 
subsection (d) the following:
    ``(e) Carbon Dioxide Geologic Sequestration Wells.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this subsection, the Administrator shall 
        promulgate regulations under subsection (a) for carbon dioxide 
        geologic sequestration wells.
            ``(2) Financial responsibility.--The regulations referred 
        to in paragraph (1) shall include requirements for maintaining 
        evidence of financial responsibility, including financial 
        responsibility for emergency and remedial response, well 
        plugging, site closure, and post-injection site care. Financial 
        responsibility may be established for carbon dioxide geologic 
        sequestration wells in accordance with regulations promulgated 
        by the Administrator by any one, or any combination, of the 
        following: insurance, guarantee, trust, standby trust, surety 
        bond, letter of credit, qualification as a self-insurer, or any 
        other method satisfactory to the Administrator.''.

SEC. 113. STUDIES AND REPORTS.

    (a) Study of Legal Framework for Geologic Sequestration Sites.--
            (1) Establishment of task force.--As soon as practicable, 
        but not later than 6 months after the date of enactment of this 
        Act, the Administrator shall establish a task force to be 
        composed of an equal number of subject matter experts, 
        nongovernmental organizations with expertise in environmental 
        policy, academic experts with expertise in environmental law, 
        State and tribal officials with environmental expertise, 
        representatives of State and tribal Attorneys General, 
        representatives from the Environmental Protection Agency, the 
        Department of the Interior, the Department of Energy, the 
        Department of Transportation, and other relevant Federal 
        agencies, and members of the private sector, to conduct a study 
        of--
                    (A) existing Federal environmental statutes, State 
                environmental statutes, and State common law that apply 
                to geologic sequestration sites for carbon dioxide, 
                including the ability of such laws to serve as risk 
                management tools;
                    (B) the existing statutory framework, including 
                Federal and State laws, that apply to harm and damage 
                to the environment or public health at closed sites 
                where carbon dioxide injection has been used for 
                enhanced hydrocarbon recovery;
                    (C) the statutory framework, environmental health 
                and safety considerations, implementation issues, and 
                financial implications of potential models for Federal, 
                State, or private sector assumption of liabilities and 
                financial responsibilities with respect to closed 
                geologic sequestration sites;
                    (D) private sector mechanisms, including insurance 
                and bonding, that may be available to manage 
                environmental, health and safety risk from closed 
                geologic sequestration sites; and
                    (E) the subsurface mineral rights, water rights, or 
                property rights issues associated with geologic 
                sequestration of carbon dioxide, including issues 
                specific to Federal lands.
            (2) Report.--Not later than 18 months after the date of 
        enactment of this Act, the task force established under 
        paragraph (1) shall submit to Congress a report describing the 
        results of the study conducted under that paragraph including 
        any consensus recommendations of the task force.
    (b) Environmental Statutes.--
            (1) Study.--The Administrator shall conduct a study 
        examining how, and under what circumstances, the environmental 
        statutes for which the Environmental Protection Agency has 
        responsibility would apply to carbon dioxide injection and 
        geologic sequestration activities.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator shall submit to 
        Congress a report describing the results of the study conducted 
        under paragraph (1).

SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEMONSTRATION AND EARLY 
              DEPLOYMENT PROGRAM.

    (a) Definitions.--For purposes of this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (2) Distribution utility.--The term ``distribution 
        utility'' means an entity that distributes electricity directly 
        to retail consumers under a legal, regulatory, or contractual 
        obligation to do so.
            (3) Electric utility.--The term ``electric utility'' has 
        the meaning provided by section 3(22) of the Federal Power Act 
        (16 U.S.C. 796(22)).
            (4) Fossil fuel-based electricity.--The term ``fossil fuel-
        based electricity'' means electricity that is produced from the 
        combustion of fossil fuels.
            (5) Fossil fuel.--The term ``fossil fuel'' means coal, 
        petroleum, natural gas or any derivative of coal, petroleum, or 
        natural gas.
            (6) Corporation.--The term ``Corporation'' means the Carbon 
        Storage Research Corporation established in accordance with 
        this section.
            (7) Qualified industry organization.--The term ``qualified 
        industry organization'' means the Edison Electric Institute, 
        the American Public Power Association, the National Rural 
        Electric Cooperative Association, a successor organization of 
        such organizations, or a group of owners or operators of 
        distribution utilities delivering fossil fuel-based electricity 
        who collectively represent at least 20 percent of the volume of 
        fossil fuel-based electricity delivered by distribution 
        utilities to consumers in the United States.
            (8) Retail consumer.--The term ``retail consumer'' means an 
        end-user of electricity.
    (b) Carbon Storage Research Corporation.--
            (1) Establishment.--
                    (A) Referendum.--Qualified industry organizations 
                may conduct, at their own expense, a referendum among 
                the owners or operators of distribution utilities 
                delivering fossil fuel-based electricity for the 
                creation of a Carbon Storage Research Corporation. Such 
                referendum shall be conducted by an independent 
                auditing firm agreed to by the qualified industry 
                organizations. Voting rights in such referendum shall 
                be based on the quantity of fossil fuel-based 
                electricity delivered to consumers in the previous 
                calendar year or other representative period as 
                determined by the Secretary pursuant to subsection (f). 
                Upon approval of those persons representing two-thirds 
                of the total quantity of fossil fuel-based electricity 
                delivered to retail consumers, the Corporation shall be 
                established unless opposed by the State regulatory 
                authorities pursuant to subparagraph (B). All 
                distribution utilities voting in the referendum shall 
                certify to the independent auditing firm the quantity 
                of fossil fuel-based electricity represented by their 
                vote.
                    (B) State regulatory authorities.--Upon its own 
                motion or the petition of a qualified industry 
                organization, each State regulatory authority shall 
                consider its support or opposition to the creation of 
                the Corporation under subparagraph (A). State 
                regulatory authorities may notify the independent 
                auditing firm referred to in subparagraph (A) of their 
                views on the creation of the Corporation within 180 
                days after the date of enactment of this Act. If 40 
                percent or more of the State regulatory authorities 
                submit to the independent auditing firm written notices 
                of opposition, the Corporation shall not be established 
                notwithstanding the approval of the qualified industry 
                organizations as provided in subparagraph (A).
            (2) Termination.--The Corporation shall be authorized to 
        collect assessments and conduct operations pursuant to this 
        section for a 10-year period from the date 6 months after the 
        date of enactment of this Act. After such 10-year period, the 
        Corporation is no longer authorized to collect assessments and 
        shall be dissolved on the date 15 years after such date of 
        enactment, unless the period is extended by an Act of Congress.
            (3) Governance.--The Corporation shall operate as a 
        division or affiliate of the Electric Power Research Institute 
        (referred to in this section as ``EPRI'') and be managed by a 
        Board of not more than 15 voting members responsible for its 
        operations, including compliance with this section. EPRI, in 
        consultation with the Edison Electric Institute, the American 
        Public Power Association and the National Rural Electric 
        Cooperative Association shall appoint the Board members under 
        clauses (i), (ii), and (iii) of subparagraph (A) from among 
        candidates recommended by those organizations. At least a 
        majority of the Board members appointed by EPRI shall be 
        representatives of distribution utilities subject to 
        assessments under subsection (d).
                    (A) Members.--The Board shall include at least one 
                representative of each of the following:
                            (i) Investor-owned utilities.
                            (ii) Utilities owned by a State agency, a 
                        municipality, and an Indian tribe.
                            (iii) Rural electric cooperatives.
                            (iv) Fossil fuel producers.
                            (v) Nonprofit environmental organizations.
                            (vi) Independent generators or wholesale 
                        power providers.
                            (vii) Consumer groups.
                    (B) Nonvoting members.--The Board shall also 
                include as additional nonvoting Members the Secretary 
                of Energy or his designee and 2 representatives of 
                State regulatory authorities as defined in section 
                3(17) of the Public Utility Regulatory Policies Act of 
                1978 (16 U.S.C. 2602(17)), each designated by the 
                National Association of State Regulatory Utility 
                Commissioners from States that are not within the same 
                transmission interconnection.
            (4) Compensation.--Corporation Board members shall receive 
        no compensation for their services, nor shall Corporation Board 
        members be reimbursed for expenses relating to their service.
            (5) Terms.--Corporation Board members shall serve terms of 
        4 years and may serve not more than 2 full consecutive terms. 
        Members filling unexpired terms may serve not more than a total 
        of 8 consecutive years. Former members of the Corporation Board 
        may be reappointed to the Corporation Board if they have not 
        been members for a period of 2 years. Initial appointments to 
        the Corporation Board shall be for terms of 1, 2, 3, and 4 
        years, staggered to provide for the selection of 3 members each 
        year.
            (6) Status of corporation.--The Corporation shall not be 
        considered to be an agency, department, or instrumentality of 
        the United States, and no officer or director or employee of 
        the Corporation shall be considered to be an officer or 
        employee of the United States Government, for purposes of title 
        5 or title 31 of the United States Code, or for any other 
        purpose, and no funds of the Corporation shall be treated as 
        public money for purposes of chapter 33 of title 31, United 
        States Code, or for any other purpose.
    (c) Functions and Administration of the Corporation.--
            (1) In general.--The Corporation shall establish and 
        administer a program to accelerate the commercial availability 
        of carbon dioxide capture and storage technologies and methods, 
        including technologies which capture and store, or capture and 
        convert, carbon dioxide. Under such program competitively 
        awarded grants, contracts, and financial assistance shall be 
        provided and entered into with eligible entities. Except as 
        provided in paragraph (8), the Corporation shall use all funds 
        derived from assessments under subsection (d) to issue grants 
        and contracts to eligible entities.
            (2) Purpose.--The purposes of the grants, contracts, and 
        assistance under this subsection shall be to support 
        commercial-scale demonstrations of carbon capture or storage 
        technology projects capable of advancing the technologies to 
        commercial readiness. Such projects should encompass a range of 
        different coal and other fossil fuel varieties, be 
        geographically diverse, involve diverse storage media, and 
        employ capture or storage, or capture and conversion, 
        technologies potentially suitable either for new or for 
        retrofit applications. The Corporation shall seek, to the 
        extent feasible, to support at least 5 commercial-scale 
        demonstration projects integrating carbon capture and 
        sequestration or conversion technologies.
            (3) Eligible entities.--Entities eligible for grants, 
        contracts or assistance under this subsection may include 
        distribution utilities, electric utilities and other private 
        entities, academic institutions, national laboratories, Federal 
        research agencies, State and tribal research agencies, 
        nonprofit organizations, or consortiums of 2 or more entities. 
        Pilot-scale and similar small-scale projects are not eligible 
        for support by the Corporation. Owners or developers of 
        projects supported by the Corporation shall, where appropriate, 
        share in the costs of such projects.
            (4) Grants for early movers.--Fifty percent of the funds 
        raised under this section shall be provided in the form of 
        grants to electric utilities that had, prior to the award of 
        any grant under this section, committed resources to deploy a 
        large scale electricity generation unit with integrated carbon 
        capture and sequestration or conversion applied to a 
        substantial portion of the unit's carbon dioxide emissions.   
        Grant funds shall be provided to defray costs incurred by such 
        electricity utilities for at least 5 such electricity 
        generation units.
            (5) Administration.--The members of the Board of Directors 
        of the Corporation shall elect a Chairman and other officers as 
        necessary, may establish committees and subcommittees of the 
        Corporation, and shall adopt rules and bylaws for the conduct 
        of business and the implementation of this section. The Board 
        shall appoint an Executive Director and professional support 
        staff who may be employees of the Electric Power Research 
        Institute (EPRI). After consultation with the Technical 
        Advisory Committee established under subsection (j), the 
        Secretary, and the Director of the National Energy Technology 
        Laboratory to obtain advice and recommendations on plans, 
        programs, and project selection criteria, the Board shall 
        establish priorities for grants, contracts, and assistance; 
        publish requests for proposals for grants, contracts, and 
        assistance; and award grants, contracts, and assistance 
        competitively, on the basis of merit, after the establishment 
        of procedures that provide for scientific peer review by the 
        Technical Advisory Committee. The Board shall give preference 
        to applications that reflect the best overall value and 
        prospect for achieving the purposes of the section, such as 
        those which demonstrate an integrated approach for capture and 
        storage or capture and conversion technologies. The Board 
        members shall not participate in making grants or awards to 
        entities with whom they are affiliated.
            (6) Uses of grants, contracts, and assistance.--A grant, 
        contract, or other assistance provided under this subsection 
        may be used to purchase carbon dioxide when needed to conduct 
        tests of carbon dioxide storage sites, in the case of 
        established projects that are storing carbon dioxide emissions, 
        or for other purposes consistent with the purposes of this 
        section. The Corporation shall make publicly available at no 
        cost information learned as a result of projects which it 
        supports financially.
            (7) Intellectual property.--The Board shall establish 
        policies regarding the ownership of intellectual property 
        developed as a result of Corporation grants and other forms of 
        technology support. Such policies shall encourage individual 
        ingenuity and invention.
            (8) Administrative expenses.--Up to 5 percent of the funds 
        collected in any fiscal year under subsection (d) may be used 
        for the administrative expenses of operating the Corporation 
        (not including costs incurred in the determination and 
        collection of the assessments pursuant to subsection (d)).
            (9) Programs and budget.--Before August 1 each year, the 
        Corporation, after consulting with the Technical Advisory 
        Committee and the Secretary and the Director of the 
        Department's National Energy Technology Laboratory and other 
        interested parties to obtain advice and recommendations, shall 
        publish for public review and comment its proposed plans, 
        programs, project selection criteria, and projects to be funded 
        by the Corporation for the next calendar year. The Corporation 
        shall also publish for public review and comment a budget plan 
        for the next calendar year, including the probable costs of all 
        programs, projects, and contracts and a recommended rate of 
        assessment sufficient to cover such costs. The Secretary may 
        recommend programs and activities the Secretary considers 
        appropriate. The Corporation shall include in the first 
        publication it issues under this paragraph a strategic plan or 
        roadmap for the achievement of the purposes of the Corporation, 
        as set forth in paragraph (2).
            (10) Records; audits.--The Corporation shall keep minutes, 
        books, and records that clearly reflect all of the acts and 
        transactions of the Corporation and make public such 
        information. The books of the Corporation shall be audited by a 
        certified public accountant at least once each fiscal year and 
        at such other times as the Corporation may designate. Copies of 
        each audit shall be provided to the Congress, all Corporation 
        board members, all qualified industry organizations, each State 
        regulatory authority and, upon request, to other members of the 
        industry. If the audit determines that the Corporation's 
        practices fail to meet generally accepted accounting principles 
        the assessment collection authority of the Corporation under 
        subsection (d) shall be suspended until a certified public 
        accountant renders a subsequent opinion that the failure has 
        been corrected. The Corporation shall make its books and 
        records available for review by the Secretary or the 
        Comptroller General of the United States.
            (11) Public access.--The Corporation Board's meetings shall 
        be open to the public and shall occur after at least 30 days 
        advance public notice. Meetings of the Board of Directors may 
        be closed to the public where the agenda of such meetings 
        includes only confidential matters pertaining to project 
        selection, the award of grants or contracts, personnel matters, 
        or the receipt of legal advice. The minutes of all meetings of 
        the Corporation shall be made available to and readily 
        accessible by the public.
            (12) Annual report.--Each year the Corporation shall 
        prepare and make publicly available a report which includes an 
        identification and description of all programs and projects 
        undertaken by the Corporation during the previous year. The 
        report shall also detail the allocation or planned allocation 
        of Corporation resources for each such program and project. The 
        Corporation shall provide its annual report to the Congress, 
        the Secretary, each State regulatory authority, and upon 
        request to the public. The Secretary shall, not less than 60 
        days after receiving such report, provide to the President and 
        Congress a report assessing the progress of the Corporation in 
        meeting the objectives of this section.
    (d) Assessments.--
            (1) Amount.--(A) In all calendar years following its 
        establishment, the Corporation shall collect an assessment on 
        distribution utilities for all fossil fuel-based electricity 
        delivered directly to retail consumers (as determined under 
        subsection (f)). The assessments shall reflect the relative 
        carbon dioxide emission rates of different fossil fuel-based 
        electricity, and initially shall be not less than the following 
        amounts for coal, natural gas, and oil:

Fuel type                               Rate of assessment per kilowatt
                                         hour
  Coal................................  $0.00043
  Natural Gas.........................  $0.00022
  Oil.................................  $0.00032.
 

            (B) The Corporation is authorized to adjust the assessments 
        on fossil fuel-based electricity to reflect changes in the 
        expected quantities of such electricity from different fuel 
        types, such that the assessments generate not less than $1.0 
        billion and not more than $1.1 billion annually. The 
        Corporation is authorized to supplement assessments through 
        additional financial commitments.
            (2) Investment of funds.--Pending disbursement pursuant to 
        a program, plan, or project, the Corporation may invest funds 
        collected through assessments under this subsection, and any 
        other funds received by the Corporation, only in obligations of 
        the United States or any agency thereof, in general obligations 
        of any State or any political subdivision thereof, in any 
        interest-bearing account or certificate of deposit of a bank 
        that is a member of the Federal Reserve System, or in 
        obligations fully guaranteed as to principal and interest by 
        the United States.
            (3) Reversion of unused funds.--If the Corporation does not 
        disburse, dedicate or assign 75 percent or more of the 
        available proceeds of the assessed fees in any calendar year 7 
        or more years following its establishment, due to an absence of 
        qualified projects or similar circumstances, it shall reimburse 
        the remaining undedicated or unassigned balance of such fees, 
        less administrative and other expenses authorized by this 
        section, to the distribution utilities upon which such fees 
        were assessed, in proportion to their collected assessments.
    (e)  ERCOT.--
            (1) Assessment, collection, and remittance.--(A) 
        Notwithstanding any other provision of this section, within 
        ERCOT, the assessment provided for in subsection (d) shall be--
                    (i) levied directly on qualified scheduling 
                entities, or their successor entities;
                    (ii) charged consistent with other charges imposed 
                on qualified scheduling entities as a fee on energy 
                used by the load-serving entities; and
                    (iii) collected and remitted by ERCOT to the 
                Corporation in the amounts and in the same manner as 
                set forth in subsection (d).
            (B) The assessment amounts referred to in subparagraph (A) 
        shall be--
                    (i) determined by the amount and types of fossil 
                fuel-based electricity delivered directly to all retail 
                customers in the prior calendar year beginning with the 
                year ending immediately prior to the period described 
                in subsection (b)(2); and
                    (ii) take into account the number of renewable 
                energy credits retired by the load-serving entities 
                represented by a qualified scheduling entity within the 
                prior calendar year.
            (2) Administration expenses.--Up to 1 percent of the funds 
        collected in any fiscal year by ERCOT under the provisions of 
        this subsection may be used for the administrative expenses 
        incurred in the determination, collection and remittance of the 
        assessments to the Corporation.
            (3) Audit.--ERCOT shall provide a copy of its annual audit 
        pertaining to the administration of the provisions of this 
        subsection to the Corporation.
            (4) Definitions.--For the purposes of this subsection:
                    (A) The term ``ERCOT'' means the Electric 
                Reliability Council of Texas.
                    (B) The term ``load-serving entities'' has the 
                meaning adopted by ERCOT Protocols and in effect on the 
                date of enactment of this Act.
                    (C) The term ``qualified scheduling entities'' has 
                the meaning adopted by ERCOT Protocols and in effect on 
                the date of enactment of this Act.
                    (D) The term ``renewable energy credit'' has the 
                meaning as promulgated and adopted by the Public 
                Utility Commission of Texas pursuant to section 
                39.904(b) of the Public Utility Regulatory Act of 1999, 
                and in effect on the date of enactment of this Act.
    (f) Determination of Fossil Fuel-based Electricity Deliveries.--
            (1) Findings.--The Congress finds that:
                    (A) The assessments under subsection (d) are to be 
                collected based on the amount of fossil fuel-based 
                electricity delivered by each distribution utility.
                    (B) Since many distribution utilities purchase all 
                or part of their retail consumer's electricity needs 
                from other entities, it may not be practical to 
                determine the precise fuel mix for the power sold by 
                each individual distribution utility.
                    (C) It may be necessary to use average data, often 
                on a regional basis with reference to Regional 
                Transmission Organization (``RTO'') or NERC regions, to 
                make the determinations necessary for making 
                assessments.
            (2) DOE proposed rule.--The Secretary, acting in close 
        consultation with the Energy Information Administration, shall 
        issue for notice and comment a proposed rule to determine the 
        level of fossil fuel electricity delivered to retail customers 
        by each distribution utility in the United States during the 
        most recent calendar year or other period determined to be most 
        appropriate. Such proposed rule shall balance the need to be 
        efficient, reasonably precise, and timely, taking into account 
        the nature and cost of data currently available and the nature 
        of markets and regulation in effect in various regions of the 
        country. Different methodologies may be applied in different 
        regions if appropriate to obtain the best balance of such 
        factors.
            (3) Final rule.--Within 6 months after the date of 
        enactment of this Act, and after opportunity for comment, the 
        Secretary shall issue a final rule under this subsection for 
        determining the level and type of fossil fuel-based electricity 
        delivered to retail customers by each distribution utility in 
        the United States during the appropriate period. In issuing 
        such rule, the Secretary may consider opportunities and costs 
        to develop new data sources in the future and issue 
        recommendations for the Energy Information Administration or 
        other entities to collect such data. After notice and 
        opportunity for comment the Secretary may, by rule, 
        subsequently update and modify the methodology for making such 
        determinations.
            (4) Annual determinations.--Pursuant to the final rule 
        issued under paragraph (3), the Secretary shall make annual 
        determinations of the amounts and types for each such utility 
        and publish such determinations in the Federal Register. Such 
        determinations shall be used to conduct the referendum under 
        subsection (b) and by the Corporation in applying any 
        assessment under this subsection.
            (5) Rehearing and judicial review.--The owner or operator 
        of any distribution utility that believes that the Secretary 
        has misapplied the methodology in the final rule in determining 
        the amount and types of fossil fuel electricity delivered by 
        such distribution utility may seek rehearing of such 
        determination within 30 days of publication of the 
        determination in the Federal Register. The Secretary shall 
        decide such rehearing petitions within 30 days. The Secretary's 
        determinations following rehearing shall be final and subject 
        to judicial review in the United States Court of Appeals for 
        the District of Columbia.
    (g) Compliance With Corporation Assessments.--The Corporation may 
bring an action in the appropriate court of the United States to compel 
compliance with an assessment levied by the Corporation under this 
section. A successful action for compliance under this subsection may 
also require payment by the defendant of the costs incurred by the 
Corporation in bringing such action.
    (h) Midcourse Review.--Not later than 5 years following 
establishment of the Corporation, the Comptroller General of the United 
States shall prepare an analysis, and report to Congress, assessing the 
Corporation's activities, including project selection and methods of 
disbursement of assessed fees, impacts on the prospects for 
commercialization of carbon capture and storage technologies, adequacy 
of funding, and administration of funds. The report shall also make 
such recommendations as may be appropriate in each of these areas. The 
Corporation shall reimburse the Government Accountability Office for 
the costs associated with performing this midcourse review.
    (i) Recovery of Costs.--
            (1) In general.--A distribution utility whose transmission, 
        delivery, or sales of electric energy are subject to any form 
        of rate regulation shall not be denied the opportunity to 
        recover the full amount of the prudently incurred costs 
        associated with complying with this section, consistent with 
        applicable State or Federal law.
            (2) Ratepayer rebates.--Regulatory authorities that approve 
        cost recovery pursuant to paragraph (1) may order rebates to 
        ratepayers to the extent that distribution utilities are 
        reimbursed undedicated or unassigned balances pursuant to 
        subsection (d)(3).
    (j) Technical Advisory Committee.--
            (1) Establishment.--There is established an advisory 
        committee, to be known as the ``Technical Advisory Committee''.
            (2) Membership.--The Technical Advisory Committee shall be 
        comprised of not less than 7 members appointed by the Board 
        from among academic institutions, national laboratories, 
        independent research institutions, and other qualified 
        institutions. No member of the Committee shall be affiliated 
        with EPRI or with any organization having members serving on 
        the Board. At least one member of the Committee shall be 
        appointed from among officers or employees of the Department of 
        Energy recommended to the Board by the Secretary of Energy.
            (3) Chairperson and vice chairperson.--The Board shall 
        designate one member of the Technical Advisory Committee to 
        serve as Chairperson of the Committee and one to serve as Vice 
        Chairperson of the Committee.
            (4) Compensation.--The Board shall provide compensation to 
        members of the Technical Advisory Committee for travel and 
        other incidental expenses and such other compensation as the 
        Board determines to be necessary.
            (5) Purpose.--The Technical Advisory Committee shall 
        provide independent assessments and technical evaluations, as 
        well as make non-binding recommendations to the Board, 
        concerning Corporation activities, including but not limited to 
        the following:
                    (A) Reviewing and evaluating the Corporation's 
                plans and budgets described in subsection (c)(9), as 
                well as any other appropriate areas, which could 
                include approaches to prioritizing technologies, 
                appropriateness of engineering techniques, monitoring 
                and verification technologies for storage, geological 
                site selection, and cost control measures.
                    (B) Making annual non-binding recommendations to 
                the Board concerning any of the matters referred to in 
                subparagraph (A), as well as what types of investments, 
                scientific research, or engineering practices would 
                best further the goals of the Corporation.
            (6) Public availability.--All reports, evaluations, and 
        other materials of the Technical Advisory Committee shall be 
        made available to the public by the Board, without charge, at 
        time of receipt by the Board.
    (k) Lobbying Restrictions.--No funds collected by the Corporation 
shall be used in any manner for influencing legislation or elections, 
except that the Corporation may recommend to the Secretary and the 
Congress changes in this section or other statutes that would further 
the purposes of this section.
    (l) Davis-Bacon Compliance.--The Corporation shall ensure that 
entities receiving grants, contracts, or other financial support from 
the Corporation for the project activities authorized by this section 
are in compliance with the Davis-Bacon Act (40 U.S.C. 276a-276a-5).

SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION 
              TECHNOLOGIES.

    Part H of title VII of the Clean Air Act (as added by section 321 
of this Act) is amended by adding the following new section after 
section 785:

``SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION 
              TECHNOLOGIES.

    ``(a) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
providing for the distribution of emission allowances allocated 
pursuant to section 782(f), pursuant to the requirements of this 
section, to support the commercial deployment of carbon capture and 
sequestration technologies in both electric power generation and 
industrial operations.
    ``(b) Eligibility Criteria.--For an owner or operator of a project 
to be eligible to receive emission allowances under this section, the 
project must--
            ``(1) implement carbon capture and sequestration 
        technology--
                    ``(A) at an electric generating unit that--
                            ``(i) has a nameplate capacity of 200 
                        megawatts or more;
                            ``(ii) in the case of a retrofit 
                        application, applies the carbon capture and 
                        sequestration technology to the flue gas from 
                        at least 200 megawatts of the total nameplate 
                        generating capacity of the unit, provided that 
                        clause (i) shall apply without exception;
                            ``(iii) derives at least 50 percent of its 
                        annual fuel input from coal, petroleum coke, or 
                        any combination of these 2 fuels; and
                            ``(iv) upon implementation of capture and 
                        sequestration technology, will achieve an 
                        emission limit that is at least a 50 percent 
                        reduction in emissions of the carbon dioxide 
                        produced by--
                                    ``(I) the unit, measured on an 
                                annual basis, determined in accordance 
                                with section 812(b)(2); or
                                    ``(II) in the case of retrofit 
                                applications under clause (ii), the 
                                treated portion of flue gas from the 
                                unit, measured on an annual basis, 
                                determined in accordance with section 
                                812(b)(2); or
                    ``(B) at an industrial source that--
                            ``(i) absent carbon capture and 
                        sequestration, would emit greater than 50,000 
                        tons per year of carbon dioxide;
                            ``(ii) upon implementation, will achieve an 
                        emission limit that is at least a 50 percent 
                        reduction in emissions of the carbon dioxide 
                        produced by the emission point, measured on an 
                        annual basis, determined in accordance with 
                        section 812(b)(2); and
                            ``(iii) does not produce a liquid 
                        transportation fuel from a solid fossil-based 
                        feedstock;
            ``(2) geologically sequester carbon dioxide at a site that 
        meets all applicable permitting and certification requirements 
        for geologic sequestration, or, pursuant to such requirements 
        as the Administrator may prescribe by regulation, convert 
        captured carbon dioxide to a stable form that will safely and 
        permanently sequester such carbon dioxide;
            ``(3) meet all other applicable State, tribal, and Federal 
        permitting requirements; and
            ``(4) be located in the United States.
    ``(c) Phase I Distribution to Electric Generating Units.--
            ``(1) Application.--This subsection shall apply only to 
        projects at the first 6 gigawatts of electric generating units, 
        measured in cumulative generating capacity of such units, that 
        receive allowances under this section.
            ``(2) Distribution.--The Administrator shall distribute 
        emission allowances allocated under section 782(f) to the owner 
        or operator of each eligible project at an electric generating 
        unit in a quantity equal to the quotient obtained by dividing--
                    ``(A) the product obtained by multiplying--
                            ``(i) the number of metric tons of carbon 
                        dioxide emissions avoided through capture and 
                        sequestration of emissions by the project, as 
                        determined pursuant to such methodology as the 
                        Administrator shall prescribe by regulation; 
                        and
                            ``(ii) a bonus allowance value, pursuant to 
                        paragraph (3); by
                    ``(B) the average fair market value of an emission 
                allowance during the preceding year.
            ``(3) Bonus allowance values.--
                    ``(A) For a generating unit achieving the capture 
                and sequestration of 85 percent or more of the carbon 
                dioxide that otherwise would be emitted by such unit, 
                the bonus allowance value shall be $90 per ton.
                    ``(B) The Administrator shall by regulation 
                establish a bonus allowance value for each rate of 
                lower capture and sequestration achieved by a 
                generating unit, from a minimum of $50 per ton for a 50 
                percent rate and varying directly with increasing rates 
                of capture and sequestration up to $90 per ton for an 
                85 percent rate.
                    ``(C) For a generating unit that achieves the 
                capture and sequestration of at least 50 percent of the 
                carbon dioxide that otherwise would be emitted by such 
                unit by not later than January 1, 2017, the otherwise 
                applicable bonus allowance value under this paragraph 
                shall be increased by $10, provided that the owner of 
                such unit notifies the Administrator by not later than 
                January 1, 2012, of its intent to achieve such rate of 
                capture and sequestration.
                    ``(D) For a carbon capture and sequestration 
                project sequestering in a geological formation for 
                purposes of enhanced hydrocarbon recovery, the 
                Administrator shall, by regulation, reduce the 
                applicable bonus allowance value under this paragraph 
                to reflect the lower net cost of the project when 
                compared to sequestration into geological formations 
                solely for purposes of sequestration.
                    ``(E) The Administrator shall annually adjust for 
                inflation the bonus allowance values established under 
                this paragraph.
    ``(d) Phase II Distribution to Electric Generating Units.--
            ``(1) Application.--This subsection shall apply only to the 
        distribution of emission allowances for carbon capture and 
        sequestration projects at electric generating units after the 
        capacity threshold identified in subsection (c)(1) is reached.
            ``(2) Regulations.--Not later than 2 years prior to the 
        date on which the capacity threshold identified in subsection 
        (c)(1) is projected to be reached, the Administrator shall 
        promulgate regulations to govern the distribution of emission 
        allowances to the owners or operators of eligible projects 
        under this subsection.
            ``(3) Reverse auctions.--
                    ``(A) In general.--Except as provided in paragraph 
                (4), the regulations promulgated under paragraph (2) 
                shall provide for the distribution of emission 
                allowances to the owners or operators of eligible 
                projects under this subsection through reverse 
                auctions, which shall be held no less frequently than 
                once each calendar year. The Administrator may 
                establish a separate auction for each of no more than 5 
                different project categories, defined on the basis of 
                coal type, capture technology, geological formation 
                type, new unit versus retrofit application, such other 
                factors as the Administrator may prescribe, or any 
                combination thereof. The Administrator may establish 
                appropriate minimum rates of capture and sequestration 
                in implementing this paragraph.
                    ``(B) Auction process.--At each reverse auction--
                            ``(i) the Administrator shall solicit bids 
                        from eligible projects;
                            ``(ii) eligible projects participating in 
                        the auction shall submit a bid including the 
                        desired level of carbon dioxide sequestration 
                        incentive per ton and the estimated quantity of 
                        carbon dioxide that the project will 
                        permanently sequester over 10 years; and
                            ``(iii) the Administrator shall select 
                        bids, within each auction, for the 
                        sequestration amount submitted, beginning with 
                        the eligible project submitting the bid for the 
                        lowest level of sequestration incentive on a 
                        per ton basis and meeting such other 
                        requirements as the Administrator may specify, 
                        until the amount of funds available for the 
                        reverse auction is committed.
                    ``(C) Form of distribution.--The Administrator 
                shall distribute emission allowances to the owners or 
                operators of eligible projects selected through a 
                reverse auction under this paragraph pursuant to a 
                formula equivalent to that described in subsection 
                (c)(2), except that the bonus allowance value that is 
                bid by the entity shall be substituted for the bonus 
                allowance values set forth in subsection (c)(3).
            ``(4) Alternative distribution method.--
                    ``(A) In general.--If the Administrator determines 
                that reverse auctions would not provide for efficient 
                and cost-effective commercial deployment of carbon 
                capture and sequestration technologies, the 
                Administrator may instead, through regulations 
                promulgated under paragraph (2) or (5), prescribe a 
                schedule for the award of bonus allowances to the 
                owners or operators of eligible projects under this 
                subsection, in accordance with the requirements of this 
                paragraph.
                    ``(B) Multiple tranches.--The Administrator shall 
                divide emission allowances available for distribution 
                to the owners or operators of eligible projects into a 
                series of tranches, each supporting the deployment of a 
                specified quantity of cumulative electric generating 
                capacity utilizing carbon capture and sequestration 
                technology, each of which shall not be greater than 6 
                gigawatts.
                    ``(C) Method of distribution.--The Administrator 
                shall distribute emission allowances within each 
                tranche, on a first-come, first-served basis--
                            ``(i) based on the date of full-scale 
                        operation of capture and sequestration 
                        technology; and
                            ``(ii) pursuant to a formula, similar to 
                        that set forth in subsection (c)(2) (except 
                        that the Administrator shall prescribe bonus 
                        allowance values different than those set forth 
                        in subsection (c)(3)), establishing the number 
                        of allowances to be distributed per ton of 
                        carbon dioxide sequestered by the project.
                    ``(D) Requirements.--For each tranche established 
                pursuant to subparagraph (B), the Administrator shall 
                establish a schedule for distributing emission 
                allowances that--
                            ``(i) is based on a sliding scale that 
                        provides higher bonus allowance values for 
                        projects achieving higher rates of capture and 
                        sequestration;
                            ``(ii) for each capture and sequestration 
                        rate, establishes a bonus allowance value that 
                        is lower than that established for such rate in 
                        the previous tranche (or, in the case of the 
                        first tranche, than that established for such 
                        rate under subsection (c)(3)); and
                            ``(iii) may establish different bonus 
                        allowance levels for no more than 5 different 
                        project categories, defined by coal type, 
                        capture technology, geological formation type, 
                        new unit versus retrofit application, such 
                        other factors as the Administrator may 
                        prescribe, or any combination thereof.
                    ``(E) Criteria for establishing bonus allowance 
                values.--In setting bonus allowance values under this 
                paragraph, the Administrator shall seek to cover no 
                more than the reasonable incremental capital and 
                operating costs of a project that are attributable to 
                implementation of carbon capture, transportation, and 
                sequestration technologies, taking into account--
                            ``(i) the reduced cost of compliance with 
                        section 722 of this Act;
                            ``(ii) the reduced cost associated with 
                        sequestering in a geological formation for 
                        purposes of enhanced hydrocarbon recovery when 
                        compared to sequestration into geological 
                        formations solely for purposes of 
                        sequestration;
                            ``(iii) the relevant factors defining the 
                        project category; and
                            ``(iv) such other factors as the 
                        Administrator determines are appropriate.
            ``(5) Revision of regulations.--The Administrator shall 
        review, and as appropriate revise, the applicable regulations 
        under this subsection no less frequently than every 8 years.
    ``(e) Limits for Certain Electric Generating Units.--
            ``(1) Definitions.--For purposes of this subsection, the 
        terms `covered EGU' and `initially permitted' shall have the 
        meaning given those terms in section 812 of this Act.
            ``(2) Covered egus initially permitted from 2009 through 
        2014.--For a covered EGU that is initially permitted on or 
        after January 1, 2009, and before January 1, 2015, the 
        Administrator shall reduce the quantity of emission allowances 
        that the owner or operator of such covered EGU would otherwise 
        be eligible to receive under this section as follows:
                    ``(A) In the case of a unit commencing operation on 
                or before January 1, 2019, if the date in clause 
                (ii)(I) is earlier than the date in clause (ii)(II), by 
                the product of--
                            ``(i) 20 percent; and
                            ``(ii) the number of years, if any, that 
                        have elapsed between--
                                    ``(I) the earlier of January 1, 
                                2020, or the date that is 5 years after 
                                the commencement of operation of such 
                                covered EGU; and
                                    ``(II) the first year that such 
                                covered EGU achieves (and thereafter 
                                maintains) an emission limit that is at 
                                least a 50 percent reduction in 
                                emissions of the carbon dioxide 
                                produced by the unit, measured on an 
                                annual basis, as determined in 
                                accordance with section 812(b)(2).
                    ``(B) In the case of a unit commencing operation 
                after January 1, 2019, by the product of--
                            ``(i) 20 percent; and
                            ``(ii) the number of years between--
                                    ``(I) the commencement of operation 
                                of such covered EGU; and
                                    ``(II) the first year that such 
                                covered EGU achieves (and thereafter 
                                maintains) an emission limit that is at 
                                least a 50 percent reduction in 
                                emissions of the carbon dioxide 
                                produced by the unit, measured on an 
                                annual basis, as determined in 
                                accordance with section 812(b)(2).
            ``(3) Covered egus initially permitted from 2015 through 
        2019.--The owner or operator of a covered EGU that is initially 
        permitted on or after January 1, 2015, and before January 1, 
        2020, shall be ineligible to receive emission allowances 
        pursuant to this section if such unit, upon commencement of 
        operations (and thereafter), does not achieve and maintain an 
        emission limit that is at least a 50 percent reduction in 
        emissions of the carbon dioxide produced by the unit, measured 
        on an annual basis, as determined in accordance with section 
        812(b)(2).
    ``(f) Industrial Sources.--
            ``(1) Allowances.--The Administrator may distribute not 
        more than 15 percent of the allowances allocated under section 
        782(f) for any vintage year to the owners or operators of 
        eligible industrial sources to support the commercial-scale 
        deployment of carbon capture and sequestration technologies at 
        such sources.
            ``(2) Distribution.--The Administrator shall, by 
        regulation, prescribe requirements for the distribution of 
        emission allowances to the owners or operators of industrial 
        sources under this subsection, based on a bonus allowance 
        formula that awards allowances to qualifying projects on the 
        basis of tons of carbon dioxide captured and permanently 
        sequestered. The Administrator may provide for the distribution 
        of emission allowances pursuant to--
                    ``(A) a reverse auction method, similar to that 
                described under subsection (d)(3), including the use of 
                separate auctions for different project categories; or
                    ``(B) an incentive schedule, similar to that 
                described under subsection (d)(4), which shall ensure 
                that incentives are set so as to satisfy the 
                requirement described in subsection (d)(4)(E).
            ``(3) Revision of regulations.--The Administrator shall 
        review, and as appropriate revise, the applicable regulations 
        under this subsection no less frequently than every 8 years.
    ``(g) Limitations.--Allowances may be distributed under this 
section only for tons of carbon dioxide emissions that have already 
been captured and sequestered. A qualifying project may receive annual 
emission allowances under this section only for the first 10 years of 
operation. No greater than 72 gigawatts of total cumulative generating 
capacity (including industrial applications, measured by such 
equivalent metric as the Administrator may designate) may receive 
emission allowances under this section. Upon reaching the limit 
described in the preceding sentence, any emission allowances that are 
allocated for carbon capture and sequestration deployment under section 
782(f) and are not yet obligated under this section shall be treated as 
allowances not designated for distribution for purposes of section 
782(r).
    ``(h) Exhaustion of Account and Annual Roll-over of Surplus 
Allowances.--
            ``(1) In distributing emission allowances under this 
        section, the Administrator shall ensure that qualifying 
        projects receiving allowances receive distributions for 10 
        years.
            ``(2) If the Administrator determines that the emission 
        allowances allocated under section 782(f) with a vintage year 
        that matches the year of distribution will be exhausted once 
        the estimated full 10-year distributions will be provided to 
        current eligible participants, the Administrator shall provide 
        to new eligible projects allowances from vintage years after 
        the year of the distribution.
    ``(i) Retrofit Applications.--(1) In calculating bonus allowance 
values for retrofit applications eligible under subsection 
(b)(1)(A)(ii) and (iv)(II), the Administrator shall apply the required 
capture rates with respect to the treated portion of flue gas from the 
unit.
    ``(2) No additional projects shall be eligible for allowances under 
subsection (b)(1)(A)(ii) and (iv)(II) as of such time as the 
Administrator reports, pursuant to section 812(d), that carbon capture 
and sequestration retrofit projects at electric generating units that 
are eligible for allowances under this section have been applied, in 
the aggregate, to the flue gas generated by 1 gigawatt of total 
cumulative generating capacity.
    ``(j) Davis-Bacon Compliance.--All laborers and mechanics employed 
on projects funded directly by or assisted in whole or in part by this 
section through the use of emission allowances shall be paid wages at 
rates not less than those prevailing on projects of a character similar 
in the locality as determined by the Secretary of Labor in accordance 
with subchapter IV, chapter 31, part A of subtitle II of title 40, 
United States Code. With respect to the labor standards specified in 
this subsection, the Secretary of Labor shall have the authority and 
functions set forth in Reorganization Plan Numbered 14 of 1950 (64 
Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States 
Code.''.

SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED POWER PLANTS.

    (a) In General.--Title VIII of the Clean Air Act (as added by 
section 331 of this Act) is amended by adding the following new section 
after section 811:

``SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL-FIRED POWER PLANTS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Covered egu.--The term `covered EGU' means a utility 
        unit that is required to have a permit under section 503(a) and 
        is authorized under state or federal law to derive at least 30 
        percent of its annual heat input from coal, petroleum coke, or 
        any combination of these fuels.
            ``(2) Initially permitted.--The term `initially permitted' 
        means that the owner or operator has received a Clean Air Act 
        preconstruction approval or permit, for the covered EGU as a 
        new (not a modified) source, but administrative review or 
        appeal of such approval or permit has not been exhausted. A 
        subsequent modification of any such approval or permits, 
        ongoing administrative or court review, appeals, or challenges, 
        or the existence or tolling of any time to pursue further 
        review, appeals, or challenges shall not affect the date on 
        which a covered EGU is considered to be initially permitted 
        under this paragraph.
    ``(b) Standards.--(1) A covered EGU that is initially permitted on 
or after January 1, 2020, shall achieve an emission limit that is a 65 
percent reduction in emissions of the carbon dioxide  produced by the  
unit, as measured on an annual basis, or meet such more stringent 
standard as the Administrator may establish pursuant to subsection (c).
    ``(2) A covered EGU that is initially permitted after January 1, 
2009, and before January 1, 2020, shall, by the applicable compliance 
date established under this paragraph, achieve an emission limit that 
is a 50 percent reduction in emissions of the carbon dioxide produced 
by the  unit, as measured on an annual basis. Compliance with the 
requirement set forth in this paragraph shall be required by the 
earliest of the following:
            ``(A) Four years after the date the Administrator has 
        published pursuant to subsection (d) a report that there are in 
        commercial operation in the United States electric generating 
        units or other stationary sources equipped with carbon capture 
        and sequestration technology that, in the aggregate--
                    ``(i) have a total of at least 4 gigawatts of 
                nameplate generating capacity of which--
                            ``(I) at least 3 gigawatts must be electric 
                        generating units; and
                            ``(II) up to 1 gigawatt may be industrial 
                        applications, for which capture and 
                        sequestration of 3 million tons of carbon 
                        dioxide per year on an aggregate annualized 
                        basis shall be considered equivalent to 1 
                        gigawatt;
                    ``(ii) include at least 2 electric generating 
                units, each with a nameplate generating capacity of 250 
                megawatts or greater, that capture, inject, and 
                sequester carbon dioxide into geologic formations other 
                than oil and gas fields; and
                    ``(iii) are capturing and sequestering in the 
                aggregate at least 12 million tons of carbon dioxide 
                per year, calculated on an aggregate annualized basis.
            ``(B) January 1, 2025.
    ``(3) If the deadline for compliance with paragraph (2) is January 
1, 2025, the Administrator may extend the deadline for compliance by a 
covered EGU by up to 18 months if the Administrator makes a 
determination, based on a showing by the owner or operator of the unit, 
that it will be technically infeasible for the unit to meet the 
standard by the deadline. The owner or operator must submit a request 
for such an extension by no later than January 1, 2022, and the 
Administrator shall provide for public notice and comment on the 
extension request.
    ``(c) Review and Revision of Standards.--Not later than 2025 and at 
5-year intervals thereafter, the Administrator shall review the 
standards for new covered EGUs under this section and shall, by rule, 
reduce the maximum carbon dioxide emission rate for new covered EGUs to 
a rate which reflects the degree of emission limitation achievable 
through the application of the best system of emission reduction which 
(taking into account the cost of achieving such reduction and any 
nonair quality health and environmental impact and energy requirements) 
the Administrator determines has been adequately demonstrated.
    ``(d)  Reports.--Not later than the date 18 months after the date 
of enactment of this title and semiannually thereafter, the 
Administrator shall publish a report on the nameplate capacity of units 
(determined pursuant to subsection (b)(2)(A)) in commercial operation 
in the United States equipped with carbon capture and sequestration 
technology, including the information described in subsection (b)(2)(A) 
(including the cumulative generating capacity to which carbon capture 
and sequestration retrofit projects meeting the criteria described in 
section 786(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied and the 
quantities of carbon dioxide captured and sequestered by such 
projects).
    ``(e) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to carry out the requirements of this section.''.

                    Subtitle C--Clean Transportation

SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE.

    (a) Amendment of PURPA.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by 
adding at the end the following:
            ``(20) Plug-in electric drive vehicle infrastructure.--
                    ``(A) Utility plan for infrastructure.--Each 
                electric utility shall develop a plan to support the 
                use of plug-in electric drive vehicles, including 
                heavy-duty hybrid electric vehicles. The plan may 
                provide for deployment of electrical charging stations 
                in public or private locations, including street 
                parking, parking garages, parking lots, homes, gas 
                stations, and highway rest stops. Any such plan may 
                also include--
                            ``(i) battery exchange, fast charging 
                        infrastructure and other services;
                            ``(ii) triggers for infrastructure 
                        deployment based upon market penetration of 
                        plug-in electric drive vehicles; and
                            ``(iii) such other elements as the State 
                        determines necessary to support plug-in 
                        electric drive vehicles.
                Each plan under this paragraph shall provide for the 
                deployment of the charging infrastructure or other 
                infrastructure necessary to adequately support the use 
                of plug-in electric drive vehicles.
                    ``(B) Support requirements.--Each State regulatory 
                authority (in the case of each electric utility for 
                which it has ratemaking authority) and each utility (in 
                the case of a nonregulated utility) shall--
                            ``(i) require that charging infrastructure 
                        deployed is interoperable with products of all 
                        auto manufacturers to the extent possible; and
                            ``(ii) consider adopting minimum 
                        requirements for deployment of electrical 
                        charging infrastructure and other appropriate 
                        requirements necessary to support the use of 
                        plug-in electric drive vehicles.
                    ``(C) Cost recovery.--Each State regulatory 
                authority (in the case of each electric utility for 
                which it has ratemaking authority) and each utility (in 
                the case of a nonregulated utility) shall consider 
                whether, and to what extent, to allow cost recovery for 
                plans and implementation of plans.
                    ``(D) Smart grid integration.--The State regulatory 
                authority (in the case of each electric utility for 
                which it has ratemaking authority) and each utility (in 
                the case of a nonregulated utility) shall, in 
                accordance with regulations issued by the Federal 
                Energy Regulatory Commission pursuant to section 
                1305(d) of the Energy Independence and Security Act of 
                2007--
                            ``(i) establish any appropriate protocols 
                        and standards for integrating plug-in electric 
                        drive vehicles into an electrical distribution 
                        system, including Smart Grid systems and 
                        devices as described in title XIII of the 
                        Energy Independence and Security Act of 2007;
                            ``(ii) include, to the extent feasible, the 
                        ability for each plug-in electric drive vehicle 
                        to be identified individually and to be 
                        associated with its owner's electric utility 
                        account, regardless of the location that the 
                        vehicle is plugged in, for purposes of 
                        appropriate billing for any electricity 
                        required to charge the vehicle's batteries as 
                        well as any crediting for electricity provided 
                        to the electric utility from the vehicle's 
                        batteries; and
                            ``(iii) review the determination made in 
                        response to section 1252 of the Energy Policy 
                        Act of 2005 in light of this section, including 
                        whether time-of-use pricing should be employed 
                        to enable the use of plug-in electric drive 
                        vehicles to contribute to meeting peak-load and 
                        ancillary service power needs.''.
    (b) Compliance.--
            (1) Time limitations.--Section 112(b) of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended 
        by adding the following at the end thereof:
    ``(7)(A) Not later than 3 years after the date of enactment of this 
paragraph, each State regulatory authority (with respect to each 
electric utility for which it has ratemaking authority) and each 
nonregulated utility shall commence the consideration referred to in 
section 111, or set a hearing date for consideration, with respect to 
the standard established by paragraph (20) of section 111(d).
    ``(B) Not later than 4 years after the date of enactment of the 
this paragraph, each State regulatory authority (with respect to each 
electric utility for which it has ratemaking authority), and each 
nonregulated electric utility, shall complete the consideration, and 
shall make the determination, referred to in section 111 with respect 
to the standard established by paragraph (20) of section 111(d).''.
            (2) Failure to comply.--Section 112(c) of the Public 
        Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is 
        amended by adding the following at the end: ``In the case of 
        the standards established by paragraph (20) of section 111(d), 
        the reference contained in this subsection to the date of 
        enactment of this Act shall be deemed to be a reference to the 
        date of enactment of such paragraph.''.
            (3) Prior state actions.--Section 112(d) of the Public 
        Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(d)) is 
        amended by striking ``(19)'' and inserting ``(20)'' before ``of 
        section 111(d)''.

SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PROGRAM.

    (a) Deployment Program.--The Secretary of Energy shall establish a 
program to deploy and integrate plug-in electric drive vehicles into 
the electricity grid in multiple regions. In carrying out the program, 
the Secretary may provide financial assistance described under 
subsection (d), consistent with the goals under subsection (b). The 
Secretary shall select regions based upon applications for assistance 
received pursuant to subsection (c).
    (b) Goals.--The goals of the program established pursuant to 
subsection (a) shall be--
            (1) to demonstrate the viability of a vehicle-based 
        transportation system that is not overly dependent on petroleum 
        as a fuel and contributes to lower carbon emissions than a 
        system based on conventional vehicles;
            (2) to facilitate the integration of advanced vehicle 
        technologies into electricity distribution areas to improve 
        system performance and reliability;
            (3) to demonstrate the potential benefits of coordinated 
        investments in vehicle electrification on personal mobility and 
        a regional grid;
            (4) to demonstrate protocols and standards that facilitate 
        vehicle integration into the grid; and
            (5) to investigate differences in each region and 
        regulatory environment regarding best practices in implementing 
        vehicle electrification.
    (c) Applications.--Any State, Indian tribe, or local government (or 
group of State, Indian tribe, or local governments) may apply to the 
Secretary of Energy for financial assistance in furthering the regional 
deployment and integration into the electricity grid of plug-in 
electric drive vehicles. Such applications may be jointly sponsored by 
electric utilities, automobile manufacturers, technology providers, car 
sharing companies or organizations, or other persons or entities.
    (d) Use of Funds.--Pursuant to applications received under 
subsection (c), the Secretary may make financial assistance available 
to any applicant or joint sponsor of the application to be used for any 
of the following:
            (1) Assisting persons located in the regional deployment 
        area, including fleet owners, in the purchase of new plug-in 
        electric drive vehicles by offsetting in whole or in part the 
        incremental cost of such vehicles above the cost of comparable 
        conventionally fueled vehicles.
            (2) Supporting the use of plug-in electric drive vehicles 
        by funding projects for the deployment of any of the following:
                    (A) Electrical charging infrastructure for plug-in 
                electric drive vehicles, including battery exchange, 
                fast charging infrastructure, and other services, in 
                public or private locations, including street parking, 
                parking garages, parking lots, homes, gas stations, and 
                highway rest stops.
                    (B) Smart Grid equipment and infrastructure, as 
                described in title XIII of the Energy Independence and 
                Security Act of 2007, to facilitate the charging and 
                integration of plug-in electric drive vehicles.
            (3) Such other projects as the Secretary determines 
        appropriate to support the large-scale deployment of plug-in 
        electric drive vehicles in regional deployment areas.
    (e) Program Requirements.--The Secretary, in consultation with the 
Administrator and the Secretary of Transportation, shall determine 
design elements and requirements of the program established pursuant to 
subsection (a), including--
            (1) the type of financial mechanism with which to provide 
        financial assistance;
            (2) criteria for evaluating applications submitted under 
        subsection (c), including the anticipated ability to promote 
        deployment and market penetration of vehicles that are less 
        dependent on petroleum as a fuel source; and
            (3) reporting requirements for entities that receive 
        financial assistance under this section, including a 
        comprehensive set of performance data characterizing the 
        results of the deployment program.
    (f) Information Clearinghouse.--The Secretary shall, as part of the 
program established pursuant to subsection (a), collect and make 
available to the public information regarding the cost, performance, 
and other technical data regarding the deployment and integration of 
plug-in electric drive vehicles.
    (g) Authorization.--There are authorized to be appropriated to 
carry out this section such sums as may be necessary.

SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFACTURING.

    (a) Vehicle Manufacturing Assistance Program.--The Secretary of 
Energy shall establish a program to provide financial assistance to 
automobile manufacturers to facilitate the manufacture of plug-in 
electric drive vehicles, as defined in section 131(a)(5) of the Energy 
Independence and Security Act of 2007, that are developed and produced 
in the United States.
    (b) Financial Assistance.--The Secretary of Energy may provide 
financial assistance to an automobile manufacturer under the program 
established pursuant to subsection (a) for--
            (1) the reconstruction or retooling of facilities for the 
        manufacture of plug-in electric drive vehicles that are 
        developed and produced in the United States; and
            (2) if appropriate, the purchase of vehicle batteries to be 
        used in the manufacture of vehicles manufactured pursuant to 
        paragraph (1).
    (c) Coordination With Regional Deployment.--The Secretary may 
provide financial assistance under subsection (b) in conjunction with 
the award of financial assistance under the large scale vehicle 
electrification program established pursuant to section 122 of this 
Act.
    (d) Program Requirements.--The Secretary shall determine design 
elements and requirements of the program established pursuant to 
subsection (a), including--
            (1) the type of financial mechanism with which to provide 
        financial assistance;
            (2) criteria, in addition to the criteria described under 
        subsection (e), for evaluating applications for financial 
        assistance; and
            (3) reporting requirements for automobile manufacturers 
        that receive financial assistance under this section.
    (e) Criteria.--In selecting recipients of financial assistance from 
among applicant automobile manufacturers, the Secretary shall give 
preference to proposals that--
            (1) are most likely to be successful; and
            (2) are located in local markets that have the greatest 
        need for the facility.
    (f) Reports.--The Secretary shall annually submit to Congress a 
report on the program established pursuant to this section.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 124. INVESTMENT IN CLEAN VEHICLES.

    (a) Definitions.--In this section:
            (1) Advanced technology vehicles and qualifying 
        components.--The terms ``advanced technology vehicles'' and 
        ``qualifying components'' shall have the definition of such 
        terms in section 136 of the Energy Independence and Security 
        Act of 2007, except that for purposes of this section, the 
        average base year as described in such section 136(a)(1)(C) 
        shall be the following:
                    (A) In each of the years 2012 through 2016, model 
                year 2009.
                    (B) In 2017, the Administrator shall, 
                notwithstanding such section 136(a)(1)(C), determine an 
                appropriate baseline based on technological and 
                economic feasibility.
            (2) Plug-in electric drive vehicle.--The term ``plug-in 
        electric drive vehicle'' shall have the definition of such term 
        in section 131 of the Energy Independence and Security Act of 
        2007.
    (b) Distribution of Allowances.--The Administrator shall, in 
accordance with this section, distribute emission allowances allocated 
pursuant to section 782(i) of the Clean Air Act not later than 
September 30 of 2012 and each calendar year thereafter through 2025.
    (c) Plug-in Electric Drive Vehicle Manufacturing and Deployment.--
            (1) In general.--The Administrator shall, at the direction 
        of the Secretary of Energy, provide emission allowances 
        allocated pursuant to section 782(i) to applicants, joint 
        sponsors and automobile manufacturers pursuant to sections 122 
        and 123 of this Act.
            (2) Annual amount.--In each of the years 2012 through 2017, 
        one-quarter of the portion of the emission allowances allocated 
        pursuant to section 782(i) of the Clean Air Act shall be 
        available to carry out paragraph (1) such that--
                    (A) one-eighth of the portion shall be available to 
                carry out section 122; and,
                    (B) one-eighth of the portion shall be available to 
                carry out section 123.
            (3) Preference.--In directing the provision of emission 
        allowances under this subsection to carry out section 122, the 
        Secretary shall give preference to applications under section 
        122(c) that are jointly sponsored by one or more automobile 
        manufacturers.
            (4) Multi-year commitments.--The Administrator shall commit 
        to providing emission allowances to an applicant, joint 
        sponsor, or automobile manufacturer for up to five consecutive 
        years if--
                    (A) an application under section 122 or 123 of this 
                Act requests a multi-year commitment;
                    (B) such application meets the criteria for support 
                established by the Secretary of Energy under sections 
                122 or 123 of this Act;
                    (C) the Administrator confirms to the Secretary 
                that emission allowances will be available for a multi-
                year commitment;
                    (D) the Secretary of Energy determines that a 
                multi-year commitment for such application will advance 
                the goals of section 122 or 123; and
                    (E) the Secretary of Energy directs the 
                Administrator to make a multi-year commitment.
            (5) Insufficient applications.--If, in any year, emission 
        allowances available under paragraph (2) cannot be provided 
        because of insufficient numbers of submitted applications that 
        meet the criteria for support established by the Secretary of 
        Energy under sections 122 or 123 of this Act, the remaining 
        emission allowances shall be distributed according to 
        subsection (d).
    (d) Advanced Technology Vehicles.--
            (1) In general.--The Administrator shall, at the direction 
        of the Secretary of Energy, provide any emission allowances 
        allocated pursuant to section 782(i) of the Clean Air Act that 
        are not provided under subsection (c) to automobile 
        manufacturers and component suppliers to pay not more than 30 
        percent of the cost of--
                    (A) reequipping, expanding, or establishing a 
                manufacturing facility in the United States to 
                produce--
                            (i) qualifying advanced technology 
                        vehicles; or
                            (ii) qualifying components; and
                    (B) engineering integration performed in the United 
                States of qualifying vehicles and qualifying 
                components.
            (2) Preference.--In directing the provision of emission 
        allowances under this subsection during the years 2012 through 
        2017, the Secretary shall give preference to applications for 
        projects that save the maximum number of gallons of fuel.

SEC. 125. ADVANCED TECHNOLOGY VEHICLE MANUFACTURING INCENTIVE LOANS.

    Section 136(d)(1) of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17013(d)(1)) is amended by striking ``$25,000,000,000'' 
and inserting ``$50,000,000,000''.

SEC. 126. AMENDMENT TO RENEWABLE FUELS STANDARD.

    (a) Definition of Renewable Biomass.--Section 211(o)(1)(I) of the 
Clean Air Act (42 U.S.C. 7545(o)) is amended to read as follows:
                    ``(I) Renewable biomass.--The term `renewable 
                biomass' means any of the following:
                            ``(i) Plant material, including waste 
                        material, harvested or collected from actively 
                        managed agricultural land that was in 
                        cultivation, cleared, or fallow and nonforested 
                        on January 1, 2009.
                            ``(ii) Plant material, including waste 
                        material, harvested or collected from 
                        pastureland that was nonforested on January 1, 
                        2009.
                            ``(iii) Nonhazardous vegetative matter 
                        derived from waste, including separated yard 
                        waste, landscape right-of-way trimmings, 
                        construction and demolition debris or food 
                        waste (but not recyclable waste paper, painted, 
                        treated or pressurized wood, or wood 
                        contaminated with plastic or metals).
                            ``(iv) Animal waste or animal byproducts, 
                        including products of animal waste digesters.
                            ``(v) Algae.
                            ``(vi) Trees, brush, slash, residues, or 
                        any other vegetative matter removed from within 
                        600 feet of any building, campground, or route 
                        designated for evacuation by a public official 
                        with responsibility for emergency preparedness, 
                        or from within 300 feet of a paved road, 
                        electric transmission line, utility tower, or 
                        water supply line.
                            ``(vii) Residues from or byproducts of 
                        milled logs.
                            ``(viii) Any of the following removed from 
                        forested land that is not Federal and is not 
                        high conservation priority land:
                                    ``(I) Trees, brush, slash, 
                                residues, interplanted energy crops, or 
                                any other vegetative matter removed 
                                from an actively managed tree 
                                plantation established--
                                            ``(aa) prior to January 1, 
                                        2009; or
                                            ``(bb) on land that, as of 
                                        January 1, 2009, was cultivated 
                                        or fallow and non-forested.
                                    ``(II) Trees, logging residue, 
                                thinnings, cull trees, pulpwood, and 
                                brush removed from naturally-
                                regenerated forests or other non-
                                plantation forests, including for the 
                                purposes of hazardous fuel reduction or 
                                preventative treatment for reducing or 
                                containing insect or disease 
                                infestation.
                                    ``(III) Logging residue, thinnings, 
                                cull trees, pulpwood, brush and species 
                                that are non-native and noxious, from 
                                stands that were planted and managed 
                                after January 1, 2009, to restore or 
                                maintain native forest types.
                                    ``(IV) Dead or severely damaged 
                                trees removed within 5 years of fire, 
                                blowdown, or other natural disaster, 
                                and badly infested trees.
                            ``(ix) Materials, pre-commercial thinnings, 
                        or removed invasive species from National 
                        Forest System land and public lands (as defined 
                        in section 103 of the Federal Land Policy and 
                        Management Act of 1976 (43 U.S.C. 1702)), 
                        including those that are byproducts of 
                        preventive treatments (such as trees, wood, 
                        brush, thinnings, chips, and slash), that are 
                        removed as part of a federally recognized 
                        timber sale, or that are removed to reduce 
                        hazardous fuels, to reduce or contain disease 
                        or insect infestation, or to restore ecosystem 
                        health, and that are--
                                    ``(I) not from components of the 
                                National Wilderness Preservation 
                                System, Wilderness Study Areas, 
                                Inventoried Roadless Areas, old growth 
                                or mature forest stands, components of 
                                the National Landscape Conservation 
                                System, National Monuments, National 
                                Conservation Areas, Designated 
                                Primitive Areas, or Wild and Scenic 
                                Rivers corridors;
                                    ``(II) harvested in environmentally 
                                sustainable quantities, as determined 
                                by the appropriate Federal land 
                                manager; and
                                    ``(III) harvested in accordance 
                                with Federal and State law and 
                                applicable land management plans.''.
    (b) Definition of High Conservation Priority Land.--Section 
211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)) is amended by 
inserting the following at the end thereof:
                    ``(M) High conservation priority land.--The term 
                `high conservation priority land' means land that is 
                not Federal land and is--
                            ``(i) globally or State ranked as 
                        critically imperiled or imperiled under a State 
                        Natural Heritage Program; or
                            ``(ii) old-growth or late-successional 
                        forest, as identified by the office of the 
                        State Forester or relevant State agency with 
                        regulatory jurisdiction over forestry 
                        activities.''.

SEC. 127. OPEN FUEL STANDARD.

    (a) Findings.--The Congress finds that--
            (1) the status of oil as a strategic commodity, which 
        derives from its domination of the transportation sector, 
        presents a clear and present danger to the United States;
            (2) in a prior era, when salt was a strategic commodity, 
        salt mines conferred national power and wars were fought over 
        the control of such mines;
            (3) technology, in the form of electricity and 
        refrigeration, decisively ended salt's monopoly of meat 
        preservation and greatly reduced its strategic importance;
            (4) fuel competition and consumer choice would similarly 
        serve to end oil's monopoly in the transportation sector and 
        strip oil of its strategic status;
            (5) the current closed fuel market has allowed a cartel of 
        petroleum exporting countries to inflate fuel prices, 
        effectively imposing a harmful tax on the economy of the United 
        States;
            (6) much of the inflated petroleum revenues the oil cartel 
        earns at the expense of the people of the United States are 
        used for purposes antithetical to the interests of the United 
        States and its allies;
            (7) alcohol fuels, including ethanol and methanol, could 
        potentially provide significant supplies of additional fuels 
        that could be produced in the United States and in many other 
        countries in the Western Hemisphere that are friendly to the 
        United States;
            (8) alcohol fuels can only play a major role in securing 
        the energy independence of the United States if a substantial 
        portion of vehicles in the United States are capable of 
        operating on such fuels;
            (9) it is not in the best interest of United States 
        consumers or the United States Government to be constrained to 
        depend solely upon petroleum resources for vehicle fuels if 
        alcohol fuels are potentially available;
            (10) existing technology, in the form of flexible fuel 
        vehicles, allows internal combustion engine cars and trucks to 
        be produced at little or no additional cost, which are capable 
        of operating on conventional gasoline, alcohol fuels, or any 
        combination of such fuels, as availability or cost advantage 
        dictates, providing a platform on which fuels can compete;
            (11) the necessary distribution system for such alcohol 
        fuels will not be developed in the United States until a 
        substantial fraction of the vehicles in the United States are 
        capable of operating on such fuels;
            (12) the establishment of such a vehicle fleet and 
        distribution system would provide a large market that would 
        mobilize private resources to substantially advance the 
        technology and expand the production of alcohol fuels in the 
        United States and abroad;
            (13) the United States has an urgent national security 
        interest to develop alcohol fuels technology, production, and 
        distribution systems as rapidly as possible;
            (14) new cars sold in the United States that are equipped 
        with an internal combustion engine should allow for fuel 
        competition by being flexible fuel vehicles, and new diesel 
        cars should be capable of operating on biodiesel; and
            (15) such an open fuel standard would help to protect the 
        United States economy from high and volatile oil prices and 
        from the threats caused by global instability, terrorism, and 
        natural disaster.
    (b) Open Fuel Standard for Transportation.--(1) Chapter 329 of 
title 49, United States Code, is amended by adding at the end the 
following:
``Sec. 32920. Open fuel standard for transportation
    ``(a) Definitions.--In this section:
            ``(1) E85.--The term `E85' means a fuel mixture containing 
        85 percent ethanol and 15 percent gasoline by volume.
            ``(2) Flexible fuel automobile.--The term `flexible fuel 
        automobile' means an automobile that has been warranted by its 
        manufacturer to operate on gasoline, E85, and M85.
            ``(3) Fuel choice-enabling automobile.--The term `fuel 
        choice-enabling automobile' means--
                    ``(A) a flexible fuel automobile; or
                    ``(B) an automobile that has been warranted by its 
                manufacturer to operate on biodiesel.
            ``(4) Light-duty automobile.--The term `light-duty 
        automobile' means--
                    ``(A) a passenger automobile; or
                    ``(B) a non-passenger automobile.
            ``(5) Light-duty automobile manufacturer's annual covered 
        inventory.--The term `light-duty automobile manufacturer's 
        annual covered inventory' means the number of light-duty 
        automobiles powered by an internal combustion engine that a 
        manufacturer, during a given calendar year, manufactures in the 
        United States or imports from outside of the United States for 
        sale in the United States.
            ``(6) M85.--The term `M85' means a fuel mixture containing 
        85 percent methanol and 15 percent gasoline by volume.
    ``(b) Open Fuel Standard for Transportation.--
            ``(1) In general.--The Secretary may promulgate regulations 
        to require each light-duty automobile manufacturer's annual 
        covered inventory to be comprised of a minimum percentage of 
        fuel-choice enabling automobiles, with sufficient lead time, if 
        the Secretary, in coordination with the Secretary of Energy and 
        the Administrator of the Environmental Protection Agency, 
        determines such requirement is a cost-effective way to achieve 
        the Nation's energy independence and environmental objectives. 
        The cost-effective determination shall consider the future 
        availability of both alternative fuel supply and infrastructure 
        to deliver the alternative fuel to the fuel-choice enabling 
        vehicles.
            ``(2) Temporary exemption from requirements.--
                    ``(A) Application.--A manufacturer may request an 
                exemption from the requirement described in paragraph 
                (1) by submitting an application to the Secretary, at 
                such time, in such manner, and containing such 
                information as the Secretary may require by regulation. 
                Each such application shall specify the models, lines, 
                and types of automobiles affected.
                    ``(B) Evaluation.--After evaluating an application 
                received from a manufacturer, the Secretary may at any 
                time, under such terms and conditions, and to such 
                extent as the Secretary considers appropriate, 
                temporarily exempt, or renew the exemption of, a light-
                duty automobile from the requirement described in 
                paragraph (1) if the Secretary determines that 
                unavoidable events not under the control of the 
                manufacturer prevent the manufacturer of such 
                automobile from meeting its required production volume 
                of fuel choice-enabling automobiles, including--
                            ``(i) a disruption in the supply of any 
                        component required for compliance with the 
                        regulations;
                            ``(ii) a disruption in the use and 
                        installation by the manufacturer of such 
                        component; or
                            ``(iii) application to plug-in electric 
                        drive vehicles causing such vehicles to fail to 
                        meet State air quality requirements.
                    ``(C) Consolidation.--The Secretary may consolidate 
                applications received from multiple manufacturers under 
                subparagraph (A) if they are of a similar nature.
                    ``(D) Conditions.--Any exemption granted under 
                subparagraph (B) shall be conditioned upon the 
                manufacturer's commitment to recall the exempted 
                automobiles for installation of the omitted components 
                within a reasonable time proposed by the manufacturer 
                and approved by the Secretary after such components 
                become available in sufficient quantities to satisfy 
                both anticipated production and recall volume 
                requirements.
                    ``(E) Notice.--The Secretary shall publish in the 
                Federal Register--
                            ``(i) notice of each application received 
                        from a manufacturer;
                            ``(ii) notice of each decision to grant or 
                        deny a temporary exemption; and
                            ``(iii) the reasons for granting or denying 
                        such exemptions.''.
    (2) The table of contents in chapter 329 of such title is amended 
adding at the end the following:

``32920. Open fuel standard for transportation.''.

SEC. 128. DIESEL EMISSIONS REDUCTION.

    Subtitle G of title VII of the Energy Policy Act of 2005 (42 U.S.C. 
16131 et seq.) is amended--
            (1) in the matter preceding clause (i) in section 
        791(3)(B), by inserting ``in any State'' after ``nonprofit 
        organization or institution'';
            (2) in section 791(9), by striking ``The term `State' 
        includes the District of Columbia.'' and inserting ``The term 
        `State' includes the District of Columbia, American Samoa, 
        Guam, the Commonwealth of the Northern Mariana Islands, Puerto 
        Rico, and the Virgin Islands.''; and
            (3) in section 793(c)--
                    (A) in paragraph (2)(A), by striking ``51 States'' 
                and inserting ``56 States'';
                    (B) in paragraph (2)(A), by striking ``1.96 
                percent'' and inserting ``1.785 percent'';
                    (C) in paragraph (2)(B), by striking ``51 States'' 
                and inserting ``56 States''; and
                    (D) in paragraph (2)(B), by amending clause (ii) to 
                read as follows:
                            ``(ii) the amount of funds remaining after 
                        each State described in paragraph (1) receives 
                        the 1.785-percent allocation under this 
                        paragraph.''.

SEC. 129. LOAN GUARANTEES FOR PROJECTS TO CONSTRUCT RENEWABLE FUEL 
              PIPELINES.

    (a) Definitions.--Section 1701 of the Energy Policy Act of 2005 (42 
U.S.C. 16511) is amended by adding at the end the following:
            ``(6) Renewable fuel.--The term `renewable fuel' has the 
        meaning given the term in section 211(o)(1) of the Clean Air 
        Act (42 U.S.C. 7545(o)(1)), except that the term shall include 
        all ethanol and biodiesel.
            ``(7) Renewable fuel pipeline.--The term `renewable fuel 
        pipeline' means a common carrier pipeline for transporting 
        renewable fuel.''.
    (b) Renewable Fuel Pipeline Eligibility.--Section 1703(b) the 
Energy Policy Act of 2005 (42 U.S.C. 16513) is amended by adding at the 
end the following:
            ``(11) Renewable fuel pipelines.''.

     Subtitle D--State Energy and Environment Development Accounts

SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS.

    (a) Definitions.--In this section:
            (1) SEED account.--The term ``SEED Account'' means a State 
        Energy and Environment Development Account established pursuant 
        to this section.
            (2) State energy office.--The term ``State Energy Office'' 
        means a State entity eligible for grants under part D of title 
        III of the Energy Policy and Conservation Act (42 U.S.C. 6321 
        et seq.).
    (b) Establishment of Program.--The Administrator shall establish a 
program under which a State, through its State Energy Office or other 
State agency designated by the State, may operate a State Energy and 
Environment Development Account.
    (c) Purpose.--The purpose of each SEED Account is to serve as a 
common State-level repository for managing and accounting for emission 
allowances provided to States designated for renewable energy and 
energy efficiency purposes.
    (d) Regulations.--Not later than one year after the date of 
enactment of this Act, the Administrator shall promulgate regulations 
to carry out this section, including regulations--
            (1) to ensure that each State operates its SEED Account and 
        any subaccounts thereof efficiently and in accordance with this 
        Act and applicable State and Federal laws;
            (2) to prevent waste, fraud, and abuse;
            (3) to indicate the emission allowances that may be 
        deposited in a State's SEED Account pending distribution or 
        use;
            (4) to indicate the programs and objectives authorized by 
        Federal law for which emission allowances in a SEED Account may 
        be distributed or used;
            (5) to identify the forms of financial assistance and 
        incentives that States may provide through distribution or use 
        of SEED Accounts; and
            (6) to prescribe the form and content of reports that the 
        States are required to submit under this section on the use of 
        SEED Accounts.
    (e) Operation.--
            (1) Deposits.--
                    (A) In general.--In the allowance tracking system 
                established pursuant to section 724(d) of the Clean Air 
                Act, the Administrator shall establish a SEED Account 
                for each State and place in it the allowances allocated 
                pursuant to section 782(g) of the Clean Air Act to be 
                distributed to States pursuant to sections 132 and 201 
                of this Act.
                    (B) Financial account.--A State may create a 
                financial account associated with its SEED Account to 
                deposit, retain, and manage any proceeds of any sale of 
                any allowance provided pursuant to this Act pending 
                expenditure or disbursement of those proceeds for 
                purposes permitted under this section. The funds in 
                such an account shall not be commingled with other 
                funds not derived from the sale of allowances provided 
                to the State; however, loans made by the State from 
                such funds pursuant to paragraph (2)(C)(i) may be 
                repaid into such a financial account, including any 
                interest charged.
            (2) Withdrawals.--
                    (A) In general.--All allowances distributed 
                pursuant to sections 132 and 201, including the 
                proceeds of any sale of such allowances, shall support 
                renewable energy and energy efficiency programs 
                authorized or approved by the Federal Government.
                    (B) Dedicated allowances.--Allowances distributed 
                pursuant to sections 132 and 201 that are required by 
                law to be used for specific purposes for a specified 
                period shall be used according to those requirements 
                during that period.
                    (C) Undedicated allowances.--To the extent that 
                allowances distributed pursuant to sections 132 and 201 
                are not required by law to be used for specific 
                purposes for a specified period as described in 
                subparagraph (B), such allowances or the proceeds of 
                their sale may be used for any of the following 
                purposes:
                            (i) Loans.--Loans of allowances, or the 
                        proceeds from the sale of allowances, may be 
                        provided, interest on commercial loans may be 
                        subsidized at an interest rate as low as zero, 
                        and other credit support may be provided to 
                        support programs authorized to use SEED Account 
                        allowance value or any other renewable energy 
                        or energy efficiency purpose authorized or 
                        approved by the Federal Government.
                            (ii) Grants.--Grants of allowances or the 
                        proceeds of their sale may be provided to 
                        support programs authorized to use SEED Account 
                        allowance value or any other renewable energy 
                        or energy efficiency purpose authorized or 
                        approved by the Federal Government.
                            (iii) Other forms of support.--Allowances 
                        or the proceeds of the sale of allowances may 
                        be provided for other forms of support for 
                        programs authorized to use SEED Account 
                        allowance value or any other renewable energy 
                        or energy efficiency purpose authorized or 
                        approved by the Federal Government.
                            (iv) Administrative costs.--Except to the 
                        extent provided in Federal law authorizing or 
                        allocating allowances deposited in a SEED 
                        Account, not more than 5 percent of the 
                        allowance value in a SEED Account in any year 
                        may be used to cover administrative expenses of 
                        the SEED Account.
                    (D) Subaccounts.--A State may request that the 
                Administrator establish accounts for local governments 
                that request such subaccounts to hold allowances 
                distributed to local governments for renewable energy 
                or energy efficiency programs authorized or approved by 
                the Federal Government.
                    (E) Intended use plans.--
                            (i) In general.--After providing for public 
                        review and comment, each State administering a 
                        SEED Account shall annually prepare a plan that 
                        identifies the intended uses of the allowances 
                        or proceeds from the sale of allowances in its 
                        SEED Account.
                            (ii) Contents.--An intended use plan shall 
                        include--
                                    (I) a list of the projects or 
                                programs for which withdrawals from the 
                                SEED Account are intended in the next 
                                fiscal year that begins after the date 
                                of the plan, including a description of 
                                each project;
                                    (II) the relationship of each of 
                                the projects or programs to an 
                                identified Federal purpose authorized 
                                by this Act, or any other Federal 
                                statute;
                                    (III) the expected terms of use of 
                                allowance value to provide assistance;
                                    (IV) the criteria and methods 
                                established for the distribution of 
                                allowances or allowance value;
                                    (V) a description of the equivalent 
                                financial value and status of the SEED 
                                Account; and
                                    (VI) a statement of the mid-term 
                                and long-term goals of the State for 
                                use of its SEED Account.
            (3) Accountability and transparency.--
                    (A) Controls and procedures.--Any State that has a 
                SEED Account shall establish fiscal controls and 
                recordkeeping and accounting procedures for the SEED 
                Account sufficient to ensure proper accounting during 
                appropriate accounting periods for distributions into 
                the SEED Account, transfers from the SEED Account, and 
                SEED Account balances, including any related financial 
                accounts. Such controls and procedures shall conform to 
                generally accepted government accounting principles. 
                Any State that has a SEED Account shall retain records 
                for a period of at least 5 years.
                    (B) Audits.--Any State that has a SEED Account 
                shall have an annual audit conducted of the SEED 
                Account by an independent public accountant in 
                accordance with generally accepted auditing standards, 
                and shall transmit the results of that audit to the 
                Administrator.
                    (C) State report.--Each State administering a SEED 
                Account shall make publicly available and submit to the 
                Administrator a report every 2 years on its activities 
                related to its SEED Account.
                    (D) Public information.--Any--
                            (i) controls and procedures established 
                        under subparagraph (A); and
                            (ii) information obtained through audits 
                        conducted under subparagraph (B), except to the 
                        extent that it would be protected from 
                        disclosure, if it were information held by the 
                        Federal Government, under section 552(b) of 
                        title 5, United States Code,
                shall be made publicly available.
                    (E) Other protections.--The Administrator shall 
                require such additional procedures and protections as 
                are necessary to ensure that any State that has a SEED 
                Account will operate the SEED Account in an accountable 
                and transparent manner.
    (f) Requirements for Eligibility.--A State's eligibility to receive 
allowances in its SEED Account shall depend on that State's compliance 
with the requirements of this Act (and the amendments made by this 
Act).
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator such sums as may be necessary for 
SEED Account operations.

SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND ENERGY EFFICIENCY 
              PROGRAMS.

    (a) Definitions.--For purposes of this section:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act 
        (as added by section 311 of this Act).
            (2) Cost-effective.--The term ``cost-effective'', with 
        respect to an energy efficiency program, means that the program 
        meets the Total Resource Cost Test, which requires that the net 
        present value of economic benefits over the life of the program 
        or measure, including avoided supply and delivery costs and 
        deferred or avoided investments, is greater than the net 
        present value of the economic costs over the life of the 
        program, including program costs and incremental costs borne by 
        the energy consumer.
            (3) Renewable energy resource.--The term ``renewable energy 
        resource'' shall have the meaning given that term in section 
        610 of the Public Utility Regulatory Policies Act of 1978 (as 
        added by section 101 of this Act).
            (4) Vintage year.--The term ``vintage year'' shall the 
        meaning given that term in section 700 of the Clean Air Act (as 
        added by section 311 of this Act).
    (b) Distribution Among States.--Not later than September 30 of each 
calendar year from 2011 through 2049, the Administrator shall, in 
accordance with this section, distribute allowances allocated pursuant 
to section 782(g)(1) of the Clean Air Act (as added by section 311 of 
this Act) for the following vintage year. The Administrator shall 
distribute 0.5 percent of such allowances pursuant to section 133 of 
this Act. The Administrator shall distribute the remaining allowances 
to States for renewable energy and energy efficiency programs to be 
deposited in and administered through the State Energy and Environment 
Development (SEED) Accounts established pursuant to section 131. The 
Administrator shall distribute allowances among the States under this 
section each year in accordance with the following formula:
            (1) One third of the allowances shall be divided equally 
        among the States.
            (2) One third of the allowances shall be distributed 
        ratably among the States based on the population of each State, 
        as contained in the most recent reliable census data available 
        from the Bureau of the Census, Department of Commerce, for all 
        States at the time the Administrator calculates the formula for 
        distribution.
            (3) One third of the allowances for shall be distributed 
        ratably among the States on the basis of the energy consumption 
        of each State as contained in the most recent State Energy Data 
        Report available from the Energy Information Administration (or 
        such alternative reliable source as the Administrator may 
        designate).
    (c) Uses.--The allowances distributed to each State pursuant to 
this section shall be used exclusively in accordance with the following 
requirements:
            (1) Not less than 12.5 percent shall be distributed by the 
        State to units of local government within such State to be used 
        exclusively to support the energy efficiency and renewable 
        energy purposes listed in paragraphs (2) and (3).
            (2) Not less than 20 percent shall be used exclusively for 
        the following energy efficiency purposes, provided that not 
        less than 1 percent shall be used for the purpose described in 
        subparagraph (D) and not less than 5 percent shall be used for 
        the purpose described in subparagraph (E):
                    (A) Implementation and enforcement of building 
                codes adopted in compliance with section 201.
                    (B) Implementation of the energy efficient 
                manufactured homes program established pursuant to 
                section 203.
                    (C) Implementation of the building energy 
                performance labeling program established pursuant to 
                section 204.
                    (D) Low-income community energy efficiency programs 
                that are consistent with the grant program established 
                under section 264 of this Act.
                    (E) Implementation of the Retrofit for Energy and 
                Environmental Performance (REEP) program established 
                pursuant to section 202.
            (3) Not less than 20 percent shall be used exclusively for 
        capital grants, tax credits, production incentives, loans, loan 
        guarantees, forgivable loans, and interest rate buy-downs for--
                    (A) re-equipping, expanding, or establishing a 
                manufacturing facility that receives certification from 
                the Secretary of Energy pursuant to section 1302 of the 
                American Recovery and Reinvestment Act of 2009 for the 
                production of--
                            (i) property designed to be used to produce 
                        energy from renewable energy sources; and
                            (ii) electricity storage systems;
                    (B) deployment of technologies to generate 
                electricity from renewable energy sources; and
                    (C) deployment of facilities or equipment, such as 
                solar panels, to generate electricity or thermal energy 
                from renewable energy resources in and on buildings in 
                an urban environment.
            (4) The remaining 47.5 percent shall be used exclusively 
        for any of the following purposes:
                    (A) Energy efficiency purposes described in 
                paragraph (2).
                    (B) Renewable energy purposes described in 
                paragraph (3)(B) and (C).
                    (C) Cost-effective energy efficiency programs for 
                end-use consumers of electricity, natural gas, home 
                heating oil, or propane, including, where appropriate, 
                programs or mechanisms administered by local 
                governments and entities other than the State.
                    (D) Enabling the development of a Smart Grid (as 
                described in section 1301 of the Energy Independence 
                and Security Act of 2007 (42 U.S.C. 17381)) for State, 
                local government, and other public buildings and 
                facilities, including integration of renewable energy 
                resources and distributed generation, demand response, 
                demand side management, and systems analysis.
                    (E) Providing the non-Federal share of support for 
                surface transportation capital projects under--
                            (i) sections 5307, 5308, 5309, 5310, 5311 
                        and 5319 of title 49, United States Code; and
                            (ii) sections 142, 146, and 149 of title 
                        23, United States Code,
                provided that not more than 10 percent of allowances 
                distributed to each State pursuant to this section 
                shall be used for such purpose.
            (5) For any allowances used for the purpose described in 
        paragraph (4)(C), the State shall--
                    (A) prioritize expansion of existing energy 
                efficiency programs approved and overseen by the State 
                or the appropriate State regulatory authority; and
                    (B) demonstrate that such allowances have been used 
                to supplement, and not to supplant, existing and 
                otherwise available State, local, and ratepayer funding 
                for such purpose.
    (d) Reporting.--Each State receiving allowances under this section 
shall include in its biennial reports required under section 131, in 
accordance with such requirements as the Administrator may prescribe
            (1) a list of entities receiving allowances or allowance 
        value under this section, including entities receiving such 
        allowances or allowance value from units of local government 
        pursuant to subsection (c)(1);
            (2) the amount and nature of allowances or allowance value 
        received by each such recipient;
            (3) the specific purposes for which such allowances or 
        allowance value was conveyed to each such recipient;
            (4) documentation of the amount of energy savings, emission 
        reductions, renewable energy deployment, and new or retooled 
        manufacturing capacity resulting from the use of such 
        allowances or allowance value; and
            (5) for any energy efficiency program supported under 
        subsection (c)(4)(C)--
                    (A) an assessment demonstrating the cost-
                effectiveness of such program; and
                    (B) a demonstration that the requirements set forth 
                in subsection (c)(5) have been satisfied.
    (e) Enforcement.--If the Administrator determines that a State is 
not in compliance with this section, the Administrator may withhold up 
to twice the number of allowances that the State failed to use in 
accordance with the requirements of this section, that such State would 
otherwise be eligible to receive under this section in later years. 
Allowances withheld pursuant to this subsection shall be distributed 
among the remaining States in accordance with the requirements of 
subsection (b).

SEC. 133. SUPPORT OF INDIAN RENEWABLE ENERGY AND ENERGY EFFICIENCY 
              PROGRAMS.

    (a) Definitions.--For purposes of this section:
            (1) Allowance; cost-effective; renewable energy resource.--
        The terms ``allowance'', ``cost-effective'', and ``renewable 
        energy resource'' have the meaning given those terms in section 
        132 of this Act.
            (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25. U.S.C. 450b).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (b) Establishment.--Not later than 18 months after the date of 
enactment of this Act, the Secretary shall, in consultation with the 
Administrator and the Secretary of the Interior, promulgate regulations 
establishing a program to distribute allowances to Indian tribes on a 
competitive basis for the following purposes:
            (1) Energy efficiency.--Cost-effective energy efficiency 
        programs for end-use consumers of electricity, natural gas, 
        home heating oil, or propane.
            (2) Renewable energy.--Deployment of technologies to 
        generate electricity from renewable energy resources.
    (c) Requirements.--The regulations promulgated pursuant to 
subsection (b) shall prescribe design elements and requirements of the 
program established under this section, including--
            (1) objective criteria for evaluating proposals submitted 
        by Indian tribes, and for selecting projects and programs to 
        receive support, under this section;
            (2) reporting requirements for Indian tribes that receive 
        allowances under this section; and
            (3) other appropriate elements and requirements.
    (d) Distribution.--The Administrator shall, at the direction of the 
Secretary, distribute to Indian tribes allowances that are set aside, 
pursuant to section 132, for use under this section.

                   Subtitle E--Smart Grid Advancement

SEC. 141. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``applicable baseline'' means the average of 
        the highest three annual peak demands a load-serving entity has 
        experienced during the 5 years immediately prior to the date of 
        enactment of this Act.
            (2) The term ``Commission'' means Federal Energy Regulatory 
        Commission.
            (3) The term ``load-serving entity'' means an entity that 
        provides electricity directly to retail consumers with the 
        responsibility to assure power quality and reliability, 
        including such entities that are investor-owned, publicly 
        owned, owned by rural electric cooperatives, or other entities.
            (4) The term ``peak demand'' means the highest point of 
        electricity demand, net of any distributed electricity 
        generation or storage from sources on the load-serving entity's 
        customers' premises, during any hour on the system of a load 
        serving entity during a calendar year, expressed in Megawatts 
        (MW), or more than one such high point as a function of 
        seasonal demand changes.
            (5) The term ``peak demand reduction'' means the reduction 
        in annual peak demand as compared to a previous baseline year 
        or period, expressed in Megawatts (MW), whether accomplished 
        by--
                    (A) diminishing the end-use requirements for 
                electricity;
                    (B) use of locally stored energy or generated 
                electricity to meet those requirements from distributed 
                resources on the load-serving entity's customers' 
                premises and without use of high-voltage transmission; 
                or
                    (C) energy savings from efficient operation of the 
                distribution grid resulting from the use of a Smart 
                Grid.
            (6) The term ``peak demand reduction plan'' means a plan 
        developed by or for a load-serving entity that it will 
        implement to meet its peak demand reduction goals.
            (7) The term ``peak period'' means the time period on the 
        system of a load-serving entity relative to peak demand that 
        may warrant special measures or electricity resources to 
        maintain system reliability while meeting peak demand.
            (8) The term ``Secretary'' means the Secretary of Energy.
            (9) The term ``Smart Grid'' has the meaning provided by 
        section 1301 of the Energy Independence and Security Act of 
        2007 (15 U.S.C. 17381).

SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVENESS IN PRODUCTS.

    (a) Assessment.--Within one year after the date of enactment of 
this Act, the Secretary and the Administrator shall each assess the 
potential for cost-effective integration of Smart Grid technologies and 
capabilities in all products that are reviewed by the Department of 
Energy and the Environmental Protection Agency, respectively, for 
potential designation as Energy Star products.
    (b) Analysis.--(1) Within 2 years after the date of enactment of 
this Act, the Secretary and the Administrator shall each prepare an 
analysis of the potential energy savings, greenhouse gas emission 
reductions, and electricity cost savings that could accrue for each of 
the products identified by the assessment in subsection (a) in the 
following optimal circumstances:
            (A) The products possessed Smart Grid capability and 
        interoperability that is tested and proven reliable.
            (B) The products were utilized in an electricity utility 
        service area which had Smart Grid capability and offered 
        customers rate or program incentives to use the products.
            (C) The utility's rates reflected national average costs, 
        including average peak and valley seasonal and daily 
        electricity costs.
            (D) Consumers using such products took full advantage of 
        such capability.
            (E) The utility avoided incremental investments and rate 
        increases related to such savings.
    (2) The analysis under paragraph (1) shall be considered the ``best 
case'' Smart Grid analysis. On the basis of such an analysis for each 
product, the Secretary and the Administrator shall determine whether 
the installation of Smart Grid capability for such a product would be 
cost effective. For purposes of this paragraph, the term ``cost 
effective'' means that the cumulative savings from using the product 
under the best case Smart Grid circumstances for a period of one-half 
of the product's expected useful life will be greater than the 
incremental cost of the Smart Grid features included in the product.
    (3) To the extent that including Smart Grid capability in any 
products analyzed under paragraph (2) is found to be cost effective in 
the best case, the Secretary and the Administrator shall, not later 
than 3 years after the date of enactment of this Act take each of the 
following actions:
            (A) Inform the manufacturer of such product of such finding 
        of cost effectiveness.
            (B) Assess the potential contributions the development and 
        use of products with Smart Grid technologies bring to reducing 
        peak demand and promoting grid stability.
            (C) Assess the potential national energy savings and 
        electricity cost savings that could be realized if Smart Grid 
        potential were installed in the relevant products reviewed by 
        the Energy Star program.
            (D) Assess and identify options for providing consumers 
        information on products with Smart Grid capabilities, including 
        the necessary conditions for cost-effective savings.
            (E) Submit a report to Congress summarizing the results of 
        the assessment for each class of products, and presenting the 
        potential energy and greenhouse gas savings that could result 
        if Smart Grid capability were installed and utilized on such 
        products.

SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON APPLIANCE ENERGY GUIDE 
              LABELS.

    Section 324(a)(2) of the Energy Policy and Conservation Act (42 
U.S.C. 6294(a)(2)) is amended by adding the following at the end:
                    ``(J)(i) Not later than 1 year after the date of 
                enactment of this subparagraph, the Federal Trade 
                Commission shall initiate a rulemaking to consider 
                making a special note in a prominent manner on any 
                ENERGY GUIDE label for any product actually including 
                Smart Grid capability that--
                            ``(I) Smart Grid capability is a feature of 
                        that product;
                            ``(II) the use and value of that feature 
                        depended on the Smart Grid capability of the 
                        utility system in which the product was 
                        installed and the active utilization of that 
                        feature by the customer; and
                            ``(III) on a utility system with Smart Grid 
                        capability, the use of the product's Smart Grid 
                        capability could reduce the customer's cost of 
                        the product's annual operation by an estimated 
                        dollar amount range representing the result of 
                        incremental energy and electricity cost savings 
                        that would result from the customer taking full 
                        advantage of such Smart Grid capability.
                    ``(ii) Not later than 3 years after the date of 
                enactment of this subparagraph, the Commission shall 
                complete the rulemaking initiated under clause (i).''.

SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS.

    (a) Goals.--Not later than one year after the date of enactment of 
this section, each load-serving entity, or, at the option of the State, 
each State with respect to load-serving entities that the State 
regulates, shall determine and publish peak demand reduction goals for 
any load-serving entities that have an applicable baseline in excess of 
250 megawatts.
    (b) Baselines.--(1) The Commission, in consultation with the 
Secretary and the Administrator, shall develop and publish, after an 
opportunity for public comment, but not later than 180 days after 
enactment of this section, a methodology to provide for adjustments or 
normalization to a load-serving entity's applicable baseline over time 
to reflect changes in the number of customers served, weather 
conditions, general economic conditions, and any other appropriate 
factors external to peak demand management, as determined by the 
Commission.
    (2) The Commission shall support load-serving entities (including 
any load-serving entities with an applicable baseline of less than 250 
megawatts that volunteer to participate in achieving the purposes of 
this section) in determining their applicable baselines, and in 
developing their peak demand reduction goals.
    (3) The Secretary, in consultation with the Commission, the 
Administrator, and the North American Electric Reliability Corporation, 
shall develop a system and rules for measurement and verification of 
demand reductions.
    (c) Peak Demand Reduction Goals.--(1) Peak demand reduction goals 
may be established for an individual load-serving entity, or, at the 
determination of a State, tribal, or regional entity, by that State, 
tribal, or regional entity for a larger region that shares a common 
system peak demand and for which peak demand reduction measures would 
offer regional benefit.
    (2) A State or regional entity establishing peak demand reduction 
goals shall cooperate, as necessary and appropriate, with the 
Commission, the Secretary, State regulatory commissions, State energy 
offices, the North American Electric Reliability Corporation, and other 
relevant authorities.
    (3) In determining the applicable peak demand reduction goals--
            (A) States and other jurisdictional entities may utilize 
        the results of the 2009 National Demand Response Potential 
        Assessment, as authorized by section 571 of the National Energy 
        Conservation Policy Act (42 U.S.C. 8279); and
            (B) the relative economics of peak demand reduction and 
        generation required to meet peak demand shall be evaluated in a 
        neutral and objective manner.
    (4) The applicable peak demand reduction goals shall provide that--
            (A) load-serving entities will reduce or mitigate peak 
        demand by a minimum percentage amount from the applicable 
        baseline to a lower peak demand during calendar year 2012;
            (B) load-serving entities will reduce or mitigate peak 
        demand by a minimum percentage greater amount from the 
        applicable baseline to a lower peak demand during calendar year 
        2015; and
            (C) the minimum percentage reductions established as peak 
        demand reduction goals shall be the maximum reductions that are 
        realistically achievable with an aggressive effort to deploy 
        Smart Grid and peak demand reduction technologies and methods, 
        including but not limited to those listed in subsection (d).
    (d) Plan.--Each load-serving entity shall prepare a peak demand 
reduction plan that demonstrates its ability to meet each applicable 
goal by any or a combination of the following options:
            (1) Direct reduction in megawatts of peak demand through--
                    (A) energy efficiency measures (including efficient 
                transmission wire technologies which significantly 
                reduce line loss compared to traditional wire 
                technology) with reliable and continued application 
                during peak demand periods; or
                    (B) use of a Smart Grid.
            (2) Demonstration that an amount of megawatts equal to a 
        stated portion of the applicable goal is contractually 
        committed to be available for peak reduction through one or 
        more of the following:
                    (A) Megawatts enrolled in demand response programs.
                    (B) Megawatts subject to the ability of a load-
                serving entity to call on demand response programs, 
                smart appliances, smart electricity or energy storage 
                devices, distributed generation resources on the 
                entity's customers' premises, or other measures 
                directly capable of actively, controllably, reliably, 
                and dynamically reducing peak demand (``dynamic peak 
                management control'').
                    (C) Megawatts available from distributed dynamic 
                electricity or energy storage under agreement with the 
                owner of that storage.
                    (D) Megawatts committed from dispatchable 
                distributed generation demonstrated to be reliable 
                under peak period conditions and in compliance with air 
                quality regulations.
                    (E) Megawatts available from smart appliances and 
                equipment with Smart Grid capability available for 
                direct control by the utility through agreement with 
                the customer owning the appliances or equipment or with 
                a third party pursuant to such agreements.
                    (F) Megawatts from a demonstrated and assured 
                minimum of distributed solar electric generation 
                capacity in instances where peak period and peak demand 
                conditions are directly related to solar radiation and 
                accompanying heat.
            (3) If any of the methods listed in subparagraph (C), (D), 
        or (E) of paragraph (2) are relied upon to meet its peak demand 
        reduction goals, the load-serving entity must demonstrate this 
        capability by operating a test during the applicable calendar 
        year.
            (4) Nothing in this section shall require the publication 
        in peak demand reduction goals or in any peak demand reduction 
        plan of any information that is confidential for competitive or 
        other reasons or that identifies individual customers.
    (e) Existing Authority and Requirements.--Nothing in this section 
diminishes or supersedes any authority of a State or political 
subdivision of a State to adopt or enforce any law or regulation 
respecting peak demand management, demand response, distributed energy 
storage, use of distributed generation, or the regulation of load-
serving entities. The Commission, in consultation with States and 
Indian tribes having such peak management, demand response and 
distributed energy storage programs, shall to the maximum extent 
practicable, facilitate coordination between the Federal program and 
such State and tribal programs.
    (f) Relief.--The Commission may, for good cause, grant relief to 
load-serving entities from the requirements of this section.
    (g) Other Laws.--Except as provided in subsections (e) and (f), no 
law or regulation shall relieve any person of any requirement otherwise 
applicable under this section.
    (h) Compliance.--(1) The Commission shall within one year after the 
date of enactment of this Act establish a public website where the 
Commission will provide information and data demonstrating compliance 
by States, Indian tribes regional entities, and load-serving entities 
with this section, including the success of load-serving entities in 
meeting applicable peak demand reduction goals.
    (2) The Commission shall, by April 1 of each year beginning in 
2012, provide a report to Congress on compliance with this section and 
success in meeting applicable peak demand reduction goals and, as 
appropriate, shall make recommendations as to how to increase peak 
demand reduction efforts.
    (3) The Commission shall note in each such report any State, 
political subdivision of a State, or load-serving entity that has 
failed to comply with this section, or is not a part of any region or 
group of load-serving entities serving a region that has complied with 
this section.
    (4) The Commission shall have and exercise the authority to take 
reasonable steps to modify the process of establishing peak demand 
reduction goals and to accept adjustments to them as appropriate when 
sought by load-serving entities.
    (i) Assistance and Funding.--
            (1) Assistance to states and tribes.--Any costs incurred by 
        States for activities undertaken pursuant to this section shall 
        be supported by the use of emission allowances allocated to the 
        States' SEED Accounts or to the tribes pursuant to section 132 
        of this Act. To the extent that a State provides allowances to 
        local governments within the State to implement this program, 
        that shall be deemed a distribution of such allowances to units 
        of local government pursuant to subsection (c)(1) of that 
        section.
            (2) Funding.--There are authorized to be appropriated such 
        sums as may be necessary to the Commission, the Secretary, and 
        the Administrator to carry out the provisions of this section.

SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUBLIC INFORMATION 
              PROGRAM TO INCLUDE SMART GRID INFORMATION.

    (a) In General.--Section 134 of the Energy Policy Act of 2005 (42 
U.S.C. 15832) is amended as follows:
            (1) By amending the section heading to read as follows: 
        ``energy efficiency and smart grid public information 
        initiative''.
            (2) In paragraph (1) of subsection (a) by striking ``reduce 
        energy consumption during the 4-year period beginning on the 
        date of enactment of this Act'' and inserting ``increase energy 
        efficiency and to adopt Smart Grid technology and practices''.
            (3) In paragraph (2) of subsection (a) by striking 
        ``benefits to consumers of reducing'' and inserting ``economic 
        and environmental benefits to consumers and the United States 
        of optimizing''.
            (4) In subsection (a) by inserting at the beginning of 
        paragraph (3) ``the effect of energy efficiency and Smart Grid 
        capability in reducing energy and electricity prices throughout 
        the economy, together with''.
            (5) In subsection (a)(4) by redesignating subparagraph (D) 
        as (E), by striking ``and'' at the end of subparagraph (C), and 
        by inserting after subparagraph (C) the following:
                    ``(D) purchasing and utilizing equipment that 
                includes Smart Grid features and capability; and''.
            (6) In subsection (c), by striking ``Not later than July 1, 
        2009,'' and inserting, ``For each year when appropriations 
        pursuant to the authorization in this section exceed 
        $10,000,000,''.
            (7) In subsection (d) by striking ``2010'' and inserting 
        ``2020''.
            (8) In subsection (e) by striking ``2010'' and inserting 
        ``2020''.
    (b) Table of Contents.--The item relating to section 134 in the 
table of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801 
and following) is amended to read as follows:

``Sec. 134. Energy efficiency and Smart Grid public information 
                            initiative.''.

SEC. 146. INCLUSION OF SMART GRID FEATURES IN APPLIANCE REBATE PROGRAM.

    (a) Amendments.--Section 124 of the Energy Policy Act of 2005 (42 
U.S.C. 15821) is amended as follows:
            (1) By amending the section heading to read as follows: 
        ``energy efficient and smart appliance rebate program.''.
            (2) By redesignating paragraphs (4) and (5) of subsection 
        (a) as paragraphs (5) and (6), respectively, and inserting 
        after paragraph (3) the following:
            ``(4) Smart appliance.--The term `smart appliance' means a 
        product that the Administrator of the Environmental Protection 
        Agency or the Secretary of Energy has determined qualifies for 
        such a designation in the Energy Star program pursuant to 
        section 142 of the American Clean Energy and Security Act of 
        2009, or that the Secretary or the Administrator has separately 
        determined includes the relevant Smart Grid capabilities listed 
        in section 1301 of the Energy Independence and Security Act of 
        2007 (15 U.S.C. 17381).''.
            (3) In subsection (b)(1) by inserting ``and smart'' after 
        ``efficient'' and by inserting after ``products'' the first 
        place it appears ``, including products designated as being 
        smart appliances''.
            (4) In subsection (b)(3), by inserting ``the administration 
        of'' after ``carry out''.
            (5) In subsection (d), by inserting ``the administration 
        of'' after ``carrying out'' and by inserting ``, and up to 100 
        percent of the value of the rebates provided pursuant to this 
        section'' before the period at the end.
            (6) In subsection (e)(3), by inserting ``, with separate 
        consideration as applicable if the product is also a smart 
        appliance,'' after ``Energy Star product'' the first place it 
        appears and by inserting ``or smart appliance'' before the 
        period at the end.
            (7) In subsection (f), by striking ``$50,000,000'' through 
        the period at the end and inserting ``$100,000,000 for each 
        fiscal year from 2010 through 2015.''.
    (b) Table of Contents.--The item relating to section 124 in the 
table of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801 
and following) is amended to read as follows:

``Sec. 124. Energy efficient and smart appliance rebate program.''.

                   Subtitle F--Transmission Planning

SEC. 151. TRANSMISSION PLANNING.

    Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended 
by adding after section 216 the following new section:

``SEC. 216A. TRANSMISSION PLANNING.

    ``(a) Federal Policy.--
            ``(1) Objectives.--It is the policy of the United States 
        that regional electric grid planning should facilitate the 
        deployment of renewable and other zero-carbon energy sources 
        for generating electricity to reduce greenhouse gas emissions 
        while ensuring reliability, reducing congestion, ensuring 
        cyber-security, and providing for cost-effective electricity 
        services throughout the United States.
            ``(2) Options.--In addition to the policy under paragraph 
        (1), it is the policy of the United States that regional 
        electric grid planning to meet these objectives should take 
        into account all significant demand-side and supply-side 
        options, including energy efficiency, distributed generation, 
        renewable energy and zero-carbon electricity generation 
        technologies, smart-grid technologies and practices, demand 
        response, electricity storage, voltage regulation technologies, 
        high capacity conductors with at least 25 percent greater 
        efficiency than traditional ACSR (aluminum stranded conductors 
        steel reinforced) conductors, superconductor technologies, 
        underground transmission technologies, and new conventional 
        electric transmission capacity and corridors.
    ``(b) Planning.--
            ``(1) Planning principles.--Not later than 1 year after the 
        date of enactment of this section, the Commission shall adopt, 
        after notice and opportunity for comment, national electricity 
        grid planning principles derived from the Federal policy 
        established under subsection (a) to be applied in ongoing and 
        future transmission planning that may implicate interstate 
        transmission of electricity.
            ``(2) Regional planning entities.--Not later than 3 months 
        after the date of adoption by the Commission of national 
        electricity grid planning principles pursuant to paragraph (1), 
        entities that conduct or may conduct transmission planning 
        pursuant to State, tribal, or Federal law or regulation, 
        including States, Indian tribes, entities designated by States 
        and Indian tribes, Federal Power Marketing Administrations, 
        public utility transmission providers, operators and owners, 
        regional organizations, and electric utilities, and that are 
        willing to incorporate the national electricity grid planning 
        principles adopted by the Commission in their electric grid 
        planning, shall identify themselves and the regions for which 
        they propose to develop plans to the Commission.
            ``(3) Coordination of regional planning entities.--The 
        Commission shall encourage regional planning entities described 
        under paragraph (2) to cooperate and coordinate across regions 
        and to harmonize regional electric grid planning with planning 
        in adjacent or overlapping jurisdictions to the maximum extent 
        feasible. The Commission shall work with States, Indian tribes, 
        Federal Power Marketing Administrations, public utilities 
        transmission providers, load-serving entities, transmission 
        operators, Regional Transmission Organizations, Independent 
        System Operators, and other organizations to resolve any 
        conflict or competition among proposed planning entities in 
        order to build consensus and promote the Federal policy 
        established under subsection (a). The Commission shall seek to 
        ensure that planning that is consistent with the national 
        electricity grid planning principles adopted pursuant to 
        paragraph (1) is conducted in all regions of the United States 
        and the territories.
            ``(4) Relation to existing planning policy.--In 
        implementing the Federal policy established under subsection 
        (a), the Commission shall--
                    ``(A) incorporate any ongoing planning efforts 
                undertaken pursuant to section 217;
                    ``(B) consult with and invite the participation of 
                the Secretary of Energy in relationship to the 
                Secretary's duties pursuant to section 216; and
                    ``(C) coordinate with the Secretaries of the 
                Interior and Agriculture and with Indian tribes in 
                carrying out the Secretaries' or tribal governments' 
                existing responsibilities for the planning or siting of 
                transmission facilities on Federal or tribal lands.
            ``(5) Assistance.--
                    ``(A) In general.--The Commission shall provide 
                support to and participate in the regional grid 
                planning processes conducted by regional planning 
                entities. The Commission may provide planning resources 
                and assistance as required or as requested by regional 
                planning entities, including system data, cost 
                information, system analysis, technical expertise, 
                modeling support, dispute resolution services, and 
                other assistance to regional planning entities, as 
                appropriate.
                    ``(B) Authorization.--There are authorized to be 
                appropriated such sums as may be necessary to carry out 
                this paragraph.
            ``(6) Conflict resolution.--In the event that regional grid 
        plans conflict, the Commission shall assist the regional 
        planning entities in resolving such conflicts in order to 
        achieve the objectives of the Federal policy established under 
        subsection (a).
            ``(7) Submission of plans.--The Commission shall require 
        regional planning entities to submit initial regional electric 
        grid plans to the Commission not later than 18 months after the 
        date the Commission promulgates national electricity grid 
        planning principles pursuant to paragraph (1) and to update 
        such plans not less than every 3 years thereafter. Regional 
        electric grid plans should, in general, be developed from sub-
        regional requirements and plans, including planning input 
        reflecting individual utility service areas. Regional plans may 
        then in turn be combined into larger regional plans, up to 
        interconnection-wide and national plans, as appropriate and 
        necessary as determined by the Commission. The Commission shall 
        review such plans for consistency with the national grid 
        planning principles and may return a plan to one or more 
        planning entities for further consideration, along with the 
        Commission's own recommendations for resolution of any conflict 
        or for improvement. To the extent practicable, all plans 
        submitted to the Commission shall be public documents and 
        available on the Commission's website.
            ``(8) Multi-regional meetings.--As regional grid plans are 
        submitted to the Commission, the Commission may convene multi-
        regional meetings to discuss regional grid plan consistency and 
        integration, including requirements for multi-regional 
        projects, and to resolve any conflicts that emerge from such 
        multi-regional projects. The Commission shall provide its 
        recommendations for eliminating any inter-regional conflicts.
            ``(9) Report to congress.--Not later than 3 years after the 
        date of enactment of this section, the Commission shall provide 
        a report to Congress containing the results of the initial 
        regional grid planning process, including summaries of the 
        adopted regional plans. The Commission shall provide an 
        electronic version of its report on its website with links to 
        all regional and sub-regional plans taken into account. The 
        Commission shall note and provide its recommended resolution 
        for any conflicts not resolved during the planning process. The 
        Commission shall make any recommendations to Congress on the 
        appropriate Federal role or support required to address the 
        needs of the electric grid, including recommendations for 
        addressing any needs that are beyond the reach of existing 
        State, tribal, and Federal authority.''.

SEC. 152. NET METERING FOR FEDERAL AGENCIES.

    (a) Standard.--Subsection (b) of section 113 of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2623) is amended by adding 
the following new paragraph at the end thereof:
            ``(6) Net metering for federal agencies.--Each electric 
        utility shall offer to arrange (either directly or through a 
        third party) to make interconnection and net metering available 
        to Federal Government agencies, offices, or facilities in 
        accordance with the requirements of section 115(j). The 
        standard under this paragraph shall apply only to electric 
        utilities that sold over 4,000,000 megawatt hours of 
        electricity in the preceding year to the ultimate consumers 
        thereof. In the case of a standard under this paragraph, a 
        period of 1 year after the date of the enactment of this 
        section shall be substituted for the 2-year period referred to 
        in other provisions of this section.''.
    (b) Special Rules.--Section 115 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2625) is amended by adding the 
following new subsection at the end thereof:
    ``(j) Net Metering for Federal Agencies.--(1) The standard under 
paragraph (6) of section 113(b) shall require that rates and charges 
and contract terms and conditions for the sale of electric energy to 
the Federal Government or agency shall be the same as the rates and 
charges and contract terms and conditions that would be applicable if 
the agency did not own or operate a qualified generation unit and use a 
net metering system.
    ``(2)(A) The standard under paragraph (6) of section 113(b) shall 
require that each electric utility shall arrange to provide to the 
Government office or agency that qualifies for net metering an 
electrical energy meter capable of net metering and measuring, to the 
maximum extent practicable, the flow of electricity to or from the 
customer, using a single meter and single register, the cost of which 
shall be recovered from the customer.
    ``(B) In a case in which it is not practicable to provide a meter 
under subparagraph (A), the utility (either directly or through a third 
party) shall, at the expense of the utility install 1 or more of those 
electric energy meters.
    ``(3)(A) The standard under paragraph (6) of section 113(b) shall 
require that each electric utility shall calculate the electric energy 
consumption for the Government office or agency using a net metering 
system that meets the requirements of this subsection and paragraph (6) 
of section 113(b) and shall measure the net electricity produced or 
consumed during the billing period using the metering installed in 
accordance with this paragraph.
    ``(B) If the electricity supplied by the retail electric supplier 
exceeds the electricity generated by the Government office or agency 
during the billing period, the Government office or agency shall be 
billed for the net electric energy supplied by the retail electric 
supplier in accordance with normal billing practices.
    ``(C) If electric energy generated by the Government office or 
agency exceeds the electric energy supplied by the retail electric 
supplier during the billing period, the Government office or agency 
shall be billed for the appropriate customer charges for that billing 
period and credited for the excess electric energy generated during the 
billing period, with the credit appearing as a kilowatt-hour credit on 
the bill for the following billing period.
    ``(D) Any kilowatt-hour credits provided to the Government office 
or agency as provided in this subsection shall be applied to the 
Government office or agency electric energy consumption on the 
following billing period bill (except for a billing period that ends in 
the next calendar year). At the beginning of each calendar year, any 
unused kilowatt-hour credits remaining from the preceding year will 
carry over to the new year.
    ``(4) The standard under paragraph (6) of section 113(b) shall 
require that each electric utility shall offer a meter and retail 
billing arrangement that has time-differentiated rates. The kilowatt-
hour credit shall be based on the ratio representing the difference in 
retail rates for each time-of-use rate, or the credits shall be 
reflected on the bill of the Government office or agency as a monetary 
credit reflecting retail rates at the time of generation of the 
electric energy by the customer-generator.
    ``(5) The standard under paragraph (6) of section 113(b) shall 
require that the qualified generation unit, interconnection standards, 
and net metering system used by the Government office or agency shall 
meet all applicable safety and performance and reliability standards 
established by the National Electrical Code, the Institute of 
Electrical and Electronics Engineers, Underwriters Laboratories, and 
the American National Standards Institute.
    ``(6) The standard under paragraph (6) of section 113(b) shall 
require that electric utilities shall not make additional charges, 
including standby charges, for equipment or services for safety or 
performance that are in addition to those necessary to meet the other 
standards and requirements of this subsection and paragraph (6) of 
section 113(b).
    ``(7) For purposes of this subsection and paragraph (6) of section 
113(b):
            ``(A) The term `Government' means any office, facility, or 
        agency of the Federal Government.
            ``(B) The term `customer-generator' means the owner or 
        operator of a electricity generation unit.
            ``(C) The term `electric generation unit' means any 
        renewable electric generation unit that is owned, operated, or 
        sited on a Federal Government facility.
            ``(D) The term `net metering' means the process of--
                    ``(i) measuring the difference between the 
                electricity supplied to a customer-generator and the 
                electricity generated by the customer-generator that is 
                delivered to a utility at the same point of 
                interconnection during an applicable billing period; 
                and
                    ``(ii) providing an energy credit to the customer-
                generator in the form of a kilowatt-hour credit for 
                each kilowatt-hour of electricity produced by the 
                customer-generator from an electric generation unit.''.
    (c) Savings Provision.--If this section or a portion of this 
section is determined to be invalid or unenforceable, that shall not 
affect the validity or enforceability of any other provision of this 
Act.

SEC. 153. SUPPORT FOR QUALIFIED ADVANCED ELECTRIC TRANSMISSION 
              MANUFACTURING PLANTS, QUALIFIED HIGH EFFICIENCY 
              TRANSMISSION PROPERTY, AND QUALIFIED ADVANCED ELECTRIC 
              TRANSMISSION PROPERTY.

    (a) Loan Guarantees Prior to September 30, 2011.--Section 1705(a) 
of the Energy Policy Act of 2005 (42 U.S.C. 16515(a)), as added by 
section 406 of the American Recovery and Reinvestment Act of 2009 
(Public Law 109-58; 119 Stat. 594) is amended by adding the following 
new paragraph at the end thereof:
            ``(5) The development, construction, acquisition, 
        retrofitting, or engineering integration of a qualified 
        advanced electric transmission manufacturing plant or the 
        construction of a qualified high efficiency transmission 
        property or a qualified advanced electric transmission property 
        (whether by construction of new facilities or the modification 
        of existing facilities). For purposes of this paragraph:
                    ``(A) The term `qualified advanced electric 
                transmission property' means any high voltage electric 
                transmission cable, related substation, converter 
                station, or other integrated facility that--
                            ``(i) utilizes advanced ultra low 
                        resistance superconductive material or other 
                        advanced technology that has been determined by 
                        the Secretary of Energy as--
                                    ``(I) reasonably likely to become 
                                commercially viable within 10 years 
                                after the date of enactment of this 
                                paragraph;
                                    ``(II) capable of reliably 
                                transmitting at least 5 gigawatts of 
                                high-voltage electric energy for 
                                distances greater than 300 miles with 
                                energy losses not exceeding 3 percent 
                                of the total power transported; and
                                    ``(III) not creating an 
                                electromagnetic field;
                            ``(ii) has been determined by an 
                        appropriate energy regulatory body, upon 
                        application, to be in the public interest and 
                        thereby eligible for inclusion in regulated 
                        rates; and
                            ``(iii) can be located safely and 
                        economically in a permanent underground right 
                        of way not to exceed 25 feet in width.
                The term `qualified advanced electric transmission 
                property' shall not include any property placed in 
                service after December 31, 2016.
                    ``(B)(i) The term `qualified high efficiency 
                transmission property' means any high voltage overhead 
                electric transmission line, related substation, or 
                other integrated facility that--
                            ``(I) utilizes advanced conductor core 
                        technology that--
                                    ``(aa) has been determined by the 
                                Secretary of Energy as reasonably 
                                likely to become commercially viable 
                                within 10 years after the date of 
                                enactment of this paragraph;
                                    ``(bb) is suitable for use on 
                                transmission lines up to 765kV; and
                                    ``(cc) exhibits power losses at 
                                least 30 percent lower than that of 
                                transmission lines using conventional 
                                `ACSR' conductors;
                            ``(II) has been determined by an 
                        appropriate energy regulatory body, upon 
                        application, to be in the public interest and 
                        thereby eligible for inclusion in regulated 
                        rates; and
                            ``(III) can be located safely and 
                        economically in a right of way not to exceed 
                        that used by conventional `ACSR' conductors; 
                        and
                    ``(ii) The term `qualified high efficiency 
                transmission property' shall not include any property 
                placed in service after December 31, 2016.
                    ``(C) The term `qualified advanced electric 
                transmission manufacturing plant' means any industrial 
                facility located in the United States which can be 
                equipped, re-equipped, expanded, or established to 
                produce in whole or in part qualified advanced electric 
                transmission property.''.
    (b) Additional Loan Guarantee Authority.--Section 1703 of the 
Energy Policy Act of 2005 (42 U.S.C. 16513) is amended by adding the 
following new paragraph at the end of subsection (b):
            ``(12) The development, construction, acquisition, 
        retrofitting, or engineering integration of a qualified 
        advanced electric transmission manufacturing plant or the 
        construction of a qualified advanced electric transmission 
        property (whether by construction of new facilities or the 
        modification of existing facilities). For purposes of this 
        paragraph, the terms `qualified advanced electric transmission 
        property' and `qualified advanced electric transmission 
        manufacturing plant' have the meanings provided by section 
        1705(a)(5).''.
    (c) Grants.--The Secretary of Energy is authorized to provide 
grants for up to 50 percent of costs incurred in connection with the 
development, construction, acquisition of components for, or 
engineering of a qualified advanced electric transmission property 
defined in paragraph (5) of section 1705(a) of the Energy Policy Act of 
2005 (42 U.S.C. 16515(a)). Such grants may only be made to the first 
project which qualifies under that paragraph. There are authorized to 
be appropriated for purposes of this subsection not more than 
$100,000,000 for fiscal year 2010. The United States shall take no 
equity or other ownership interest in the qualified advanced electric 
transmission manufacturing plant or qualified advanced electric 
transmission property for which funding is provided under this 
subsection.

            Subtitle G--Technical Corrections to Energy Laws

SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDEPENDENCE AND SECURITY ACT 
              OF 2007.

    (a) Title III--Energy Savings Through Improved Standards for 
Appliance and Lighting.--(1) Section 325(u) of the Energy Policy and 
Conservation Act (42 U.S.C. 6295(u)) (as amended by section 301(c) of 
the Energy Independence and Security Act of 2007 (121 Stat. 1550)) is 
amended--
                    (A) by redesignating paragraph (7) as paragraph 
                (4); and
                    (B) in paragraph (4) (as so redesignated), by 
                striking ``supplies is'' and inserting ``supply is''.
    (2) Section 302 of the Energy Independence and Security Act of 2007 
(121 Stat. 1551)) is amended--
            (A) in subsection (a), by striking ``end of the paragraph'' 
        and inserting ``end of subparagraph (A)''; and
            (B) in subsection (b), by striking ``6313(a)'' and 
        inserting ``6314(a)''.
    (3) Section 343(a)(1) of the Energy Policy and Conservation Act (42 
U.S.C. 6313(a)(1)) (as amended by section 302(b) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1551)) is amended--
            (A) by striking ``Test procedures'' and all that follows 
        through ``At least once'' and inserting ``Test procedures.--At 
        least once''; and
            (B) by redesignating clauses (i) and (ii) as subparagraphs 
        (A) and (B), respectively (and by moving the margins of such 
        subparagraphs 2 ems to the left).
    (4) Section 342(a)(6) of the Energy Policy and Conservation Act (42 
U.S.C. 6313(a)(6)) (as amended by section 305(b)(2) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1554)) is amended--
            (A) in subparagraph (B)--
                    (i) by striking ``If the Secretary'' and inserting 
                the following:
                            ``(i) In general.--If the Secretary'';
                    (ii) by striking ``clause (ii)(II)'' and inserting 
                ``subparagraph (A)(ii)(II)'';
                    (iii) by striking ``clause (i)'' and inserting 
                ``subparagraph (A)(i)''; and
                    (iv) by adding at the end the following:
                            ``(ii) Factors.--In determining whether a 
                        standard is economically justified for the 
                        purposes of subparagraph (A)(ii)(II), the 
                        Secretary shall, after receiving views and 
                        comments furnished with respect to the proposed 
                        standard, determine whether the benefits of the 
                        standard exceed the burden of the proposed 
                        standard by, to the maximum extent practicable, 
                        considering--
                                    ``(I) the economic impact of the 
                                standard on the manufacturers and on 
                                the consumers of the products subject 
                                to the standard;
                                    ``(II) the savings in operating 
                                costs throughout the estimated average 
                                life of the product in the type (or 
                                class) compared to any increase in the 
                                price of, or in the initial charges 
                                for, or maintenance expenses of, the 
                                products that are likely to result from 
                                the imposition of the standard;
                                    ``(III) the total projected 
                                quantity of energy savings likely to 
                                result directly from the imposition of 
                                the standard;
                                    ``(IV) any lessening of the utility 
                                or the performance of the products 
                                likely to result from the imposition of 
                                the standard;
                                    ``(V) the impact of any lessening 
                                of competition, as determined in 
                                writing by the Attorney General, that 
                                is likely to result from the imposition 
                                of the standard;
                                    ``(VI) the need for national energy 
                                conservation; and
                                    ``(VII) other factors the Secretary 
                                considers relevant.
                            ``(iii) Administration.--
                                    ``(I) Energy use and efficiency.--
                                The Secretary may not prescribe any 
                                amended standard under this paragraph 
                                that increases the maximum allowable 
                                energy use, or decreases the minimum 
                                required energy efficiency, of a 
                                covered product.
                                    ``(II) Unavailability.--
                                            ``(aa) In general.--The 
                                        Secretary may not prescribe an 
                                        amended standard under this 
                                        subparagraph if the Secretary 
                                        finds (and publishes the 
                                        finding) that interested 
                                        persons have established by a 
                                        preponderance of the evidence 
                                        that a standard is likely to 
                                        result in the unavailability in 
                                        the United States in any 
                                        product type (or class) of 
                                        performance characteristics 
                                        (including reliability, 
                                        features, sizes, capacities, 
                                        and volumes) that are 
                                        substantially the same as those 
                                        generally available in the 
                                        United States at the time of 
                                        the finding of the Secretary.
                                            ``(bb) Other types or 
                                        classes.--The failure of some 
                                        types (or classes) to meet the 
                                        criterion established under 
                                        this subclause shall not affect 
                                        the determination of the 
                                        Secretary on whether to 
                                        prescribe a standard for the 
                                        other types or classes.''; and
            (B) in subparagraph (C)(iv), by striking ``An amendment 
        prescribed under this subsection'' and inserting 
        ``Notwithstanding subparagraph (D), an amendment prescribed 
        under this subparagraph''.
    (5) Section 342(a)(6)(B)(iii) of the Energy Policy and Conservation 
Act (as added by section 306(c) of the Energy Independence and Security 
Act of 2007) is transferred and redesignated as clause (vi) of section 
342(a)(6)(C) of the Energy Policy and Conservation Act (as amended by 
section 305(b)(2) of the Energy Independence and Security Act of 2007).
    (6) Section 340 of the Energy Policy and Conservation Act (42 
U.S.C. 6311) (as amended by sections 312(a)(2) and 314(a) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1564, 1569)) is 
amended by redesignating paragraphs (22) and (23) (as added by section 
314(a) of that Act) as paragraphs (23) and (24), respectively.
    (7) Section 345 of the Energy Policy and Conservation Act (42 
U.S.C. 6316) (as amended by section 312(e) of the Energy Independence 
and Security Act of 2007 (121 Stat. 1567)) is amended--
            (A) by striking ``subparagraphs (B) through (G)'' each 
        place it appears and inserting ``subparagraphs (B), (C), (D), 
        (I), (J), and (K)'';
            (B) by striking ``part A'' each place it appears and 
        inserting ``part B''; and
            (C) in subsection (h)(3), by striking ``section 342(f)(3)'' 
        and inserting ``section 342(f)(4)''.
    (8) Section 340(13) of the Energy Policy and Conservation Act (42 
U.S.C. 6311(13)) (as amended by section 313(a) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1568)) is amended--
            (A) by striking subparagraphs (A) and (B) and inserting the 
        following:
                    ``(A) In general.--The term `electric motor' means 
                any motor that is--
                            ``(i) a general purpose T-frame, single-
                        speed, foot-mounting, polyphase squirrel-cage 
                        induction motor of the National Electrical 
                        Manufacturers Association, Design A and B, 
                        continuous rated, operating on 230/460 volts 
                        and constant 60 Hertz line power as defined in 
                        NEMA Standards Publication MG1-1987; or
                            ``(ii) a motor incorporating the design 
                        elements described in clause (i), but is 
                        configured to incorporate one or more of the 
                        following variations--
                                    ``(I) U-frame motor;
                                    ``(II) NEMA Design C motor;
                                    ``(III) close-coupled pump motor;
                                    ``(IV) footless motor;
                                    ``(V) vertical solid shaft normal 
                                thrust motor (as tested in a horizontal 
                                configuration);
                                    ``(VI) 8-pole motor; or
                                    ``(VII) poly-phase motor with a 
                                voltage rating of not more than 600 
                                volts (other than 230 volts or 460 
                                volts, or both, or can be operated on 
                                230 volts or 460 volts, or both).''; 
                                and
            (B) by redesignating subparagraphs (C) through (I) as 
        subparagraphs (B) through (H), respectively.
    (9)(A) Section 342(b) of the Energy Policy and Conservation Act (42 
U.S.C. 6313(b)) is amended--
    (i) in paragraph (1), by striking ``paragraph (2)'' and inserting 
``paragraph (3)'';
    (ii) by redesignating paragraphs (2) and (3) as paragraphs (3) and 
(4);
    (iii) by inserting after paragraph (1) the following:
            ``(2) Standards effective beginning december 19, 2010.--
                    ``(A) In general.--Except for definite purpose 
                motors, special purpose motors, and those motors 
                exempted by the Secretary under paragraph (3) and 
                except as provided for in subparagraphs (B), (C), and 
                (D), each electric motor manufactured with power 
                ratings from 1 to 200 horsepower (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency of not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-12.
                    ``(B) Fire pump electric motors.--Except for those 
                motors exempted by the Secretary under paragraph (3), 
                each fire pump electric motor manufactured with power 
                ratings from 1 to 200 horsepower (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency that is not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-11.
                    ``(C) NEMA design b electric motors.--Except for 
                those motors exempted by the Secretary under paragraph 
                (3), each NEMA Design B electric motor with power 
                ratings of more than 200 horsepower, but not greater 
                than 500 horsepower, manufactured (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency of not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-11.
                    ``(D) Motors incorporating certain design 
                elements.--Except for those motors exempted by the 
                Secretary under paragraph (3), each electric motor 
                described in section 340(13)(A)(ii) manufactured with 
                power ratings from 1 to 200 horsepower (alone or as a 
                component of another piece of equipment) on or after 
                December 19, 2010, shall have a nominal full load 
                efficiency of not less than the nominal full load 
                efficiency described in NEMA MG-1 (2006) Table 12-
                11.''; and
    (iv) in paragraph (3) (as redesignated by clause (ii)), by striking 
``paragraph (1)'' each place it appears in subparagraphs (A) and (D) 
and inserting ``paragraphs (1) and (2)''.
    (B) Section 313 of the Energy Independence and Security Act of 2007 
(121 Stat. 1568) is repealed.
    (C) The amendments made by--
            (i) subparagraph (A) shall take effect on December 19, 
        2010; and
            (ii) subparagraph (B) shall take effect on December 19, 
        2007.
    (10) Section 321(30)(D)(i)(III) of the Energy Policy and 
Conservation Act (42 U.S.C. 6291(30)(D)(i)(III)) (as amended by section 
321(a)(1)(A) of the Energy Independence and Security Act of 2007 (121 
Stat. 1574)) is amended by inserting before the semicolon the 
following: ``or, in the case of a modified spectrum lamp, not less than 
232 lumens and not more than 1,950 lumens''.
    (11) Section 321(30)(T) of the Energy Policy and Conservation Act 
(42 U.S.C. 6291(30)(T) (as amended by section 321(a)(1)(B) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1574)) is 
amended--
            (A) in clause (i)--
                    (i) by striking the comma after ``household 
                appliance'' and inserting ``and''; and
                    (ii) by striking ``and is sold at retail,''; and
            (B) in clause (ii), by inserting ``when sold at retail,'' 
        before ``is designated''.
    (12) Section 325 of the Energy Policy and Conservation Act (42 
U.S.C. 6295) (as amended by sections 321(a)(3)(A) and 322(b) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1577, 1588)) is 
amended by striking subsection (i) and inserting the following:
    ``(i) General Service Fluorescent Lamps, General Service 
Incandescent Lamps, Intermediate Base Incandescent Lamps, Candelabra 
Base Incandescent Lamps, and Incandescent Reflector Lamps.--
            ``(1) Energy efficiency standards.--
                    ``(A) In general.--Each of the following general 
                service fluorescent lamps, general service incandescent 
                lamps, intermediate base incandescent lamps, candelabra 
                base incandescent lamps, and incandescent reflector 
                lamps manufactured after the effective date specified 
                in the tables listed in this subparagraph shall meet or 
                exceed the following lamp efficacy, new maximum 
                wattage, and CRI standards:

                                               ``FLUORESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                                  Effective Date
           Lamp Type               Nominal Lamp       Minimum CRI       Minimum Average Lamp        (Period of
                                      Wattage                              Efficacy (LPW)            Months)
----------------------------------------------------------------------------------------------------------------
4-foot medium bi-pin...........        >35 W              69                    75.0                    36
                                       35 W               45                    75.0                    36
2-foot U-shaped................        >35 W              69                    68.0                    36
                                        35 W              45                    64.0                    36
8-foot slimline................         65 W              69                    80.0                    18
                                       65 W               45                    80.0                    18
8-foot high output.............       >100 W              69                    80.0                    18
                                       100 W              45                    80.0                    18
----------------------------------------------------------------------------------------------------------------

                     ``INCANDESCENT REFLECTOR LAMPS
------------------------------------------------------------------------
                                                          Effective Date
     Nominal Lamp Wattage         Minimum Average Lamp      (Period of
                                     Efficacy (LPW)           Months)
------------------------------------------------------------------------
 40-50.......................             10.5                  36
 51-66.......................             11.0                  36
 67-85.......................             12.5                  36
 86-115......................             14.0                  36
116-155......................             14.5                  36
156-205......................             15.0                  36
------------------------------------------------------------------------

                                      ``GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                         Minimum
                       Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                        Wattage         Lifetime        Date
----------------------------------------------------------------------------------------------------------------
1490-2600                                                                        72     1,000 hrs      1/1/2012
1050-1489                                                                        53     1,000 hrs      1/1/2013
750-1049                                                                         43     1,000 hrs      1/1/2014
310-749                                                                          29     1,000 hrs      1/1/2014
----------------------------------------------------------------------------------------------------------------

                             ``MODIFIED SPECTRUM GENERAL SERVICE INCANDESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
                                                                                         Minimum
                       Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                        Wattage         Lifetime        Date
----------------------------------------------------------------------------------------------------------------
1118-1950                                                                        72     1,000 hrs      1/1/2012
788-1117                                                                         53     1,000 hrs      1/1/2013
563-787                                                                          43     1,000 hrs      1/1/2014
232-562                                                                          29     1,000 hrs      1/1/2014
----------------------------------------------------------------------------------------------------------------

                    ``(B) Application.--
                            ``(i) Application criteria.--This 
                        subparagraph applies to each lamp that--
                                    ``(I) is intended for a general 
                                service or general illumination 
                                application (whether incandescent or 
                                not);
                                    ``(II) has a medium screw base or 
                                any other screw base not defined in 
                                ANSI C81.61-2006;
                                    ``(III) is capable of being 
                                operated at a voltage at least 
                                partially within the range of 110 to 
                                130 volts; and
                                    ``(IV) is manufactured or imported 
                                after December 31, 2011.
                            ``(ii) Requirement.--For purposes of this 
                        paragraph, each lamp described in clause (i) 
                        shall have a color rendering index that is 
                        greater than or equal to--
                                    ``(I) 80 for nonmodified spectrum 
                                lamps; or
                                    ``(II) 75 for modified spectrum 
                                lamps.
                    ``(C) Candelabra incandescent lamps and 
                intermediate base incandescent lamps.--
                            ``(i) Candelabra base incandescent lamps.--
                        Effective beginning January 1, 2012, a 
                        candelabra base incandescent lamp shall not 
                        exceed 60 rated watts.
                            ``(ii) Intermediate base incandescent 
                        lamps.--Effective beginning January 1, 2012, an 
                        intermediate base incandescent lamp shall not 
                        exceed 40 rated watts.
                    ``(D) Exemptions.--
                            ``(i) Statutory exemptions.--The standards 
                        specified in subparagraph (A) shall not apply 
                        to the following types of incandescent 
                        reflector lamps:
                                    ``(I) Lamps rated at 50 watts or 
                                less that are ER30, BR30, BR40, or ER40 
                                lamps.
                                    ``(II) Lamps rated at 65 watts that 
                                are BR30, BR40, or ER40 lamps.
                                    ``(III) R20 incandescent reflector 
                                lamps rated 45 watts or less.
                            ``(ii) Administrative exemptions.--
                                    ``(I) Petition.--Any person may 
                                petition the Secretary for an exemption 
                                for a type of general service lamp from 
                                the requirements of this subsection.
                                    ``(II) Criteria.--The Secretary may 
                                grant an exemption under subclause (I) 
                                only to the extent that the Secretary 
                                finds, after a hearing and opportunity 
                                for public comment, that it is not 
                                technically feasible to serve a 
                                specialized lighting application (such 
                                as a military, medical, public safety, 
                                or certified historic lighting 
                                application) using a lamp that meets 
                                the requirements of this subsection.
                                    ``(III) Additional criterion.--To 
                                grant an exemption for a product under 
                                this clause, the Secretary shall 
                                include, as an additional criterion, 
                                that the exempted product is unlikely 
                                to be used in a general service 
                                lighting application.
                    ``(E) Extension of coverage.--
                            ``(i) Petition.--Any person may petition 
                        the Secretary to establish standards for lamp 
                        shapes or bases that are excluded from the 
                        definition of general service lamps.
                            ``(ii) Increased sales of exempted lamps.--
                        The petition shall include evidence that the 
                        availability or sales of exempted incandescent 
                        lamps have increased significantly since the 
                        date on which the standards on general service 
                        incandescent lamps were established.
                            ``(iii) Criteria.--The Secretary shall 
                        grant a petition under clause (i) if the 
                        Secretary finds that--
                                    ``(I) the petition presents 
                                evidence that demonstrates that 
                                commercial availability or sales of 
                                exempted incandescent lamp types have 
                                increased significantly since the 
                                standards on general service lamps were 
                                established and likely are being widely 
                                used in general lighting applications; 
                                and
                                    ``(II) significant energy savings 
                                could be achieved by covering exempted 
                                products, as determined by the 
                                Secretary based in part on sales data 
                                provided to the Secretary from 
                                manufacturers and importers.
                            ``(iv) No presumption.--The grant of a 
                        petition under this subparagraph shall create 
                        no presumption with respect to the 
                        determination of the Secretary with respect to 
                        any criteria under a rulemaking conducted under 
                        this section.
                            ``(v) Expedited proceeding.--If the 
                        Secretary grants a petition for a lamp shape or 
                        base under this subparagraph, the Secretary 
                        shall--
                                    ``(I) conduct a rulemaking to 
                                determine standards for the exempted 
                                lamp shape or base; and
                                    ``(II) complete the rulemaking not 
                                later than 18 months after the date on 
                                which notice is provided granting the 
                                petition.
                    ``(F) Effective dates.--
                            ``(i) In general.--In this paragraph, 
                        except as otherwise provided in a table 
                        contained in subparagraph (A) or in clause 
                        (ii), the term `effective date' means the last 
                        day of the month specified in the table that 
                        follows October 24, 1992.
                            ``(ii) Special effective dates.--
                                    ``(I) ER, br, and bpar lamps.--The 
                                standards specified in subparagraph (A) 
                                shall apply with respect to ER 
                                incandescent reflector lamps, BR 
                                incandescent reflector lamps, BPAR 
                                incandescent reflector lamps, and 
                                similar bulb shapes on and after 
                                January 1, 2008, or the date that is 
                                180 days after the date of enactment of 
                                the Energy Independence and Security 
                                Act of 2007.
                                    ``(II) Lamps between 2.25-2.75 
                                inches in diameter.--The standards 
                                specified in subparagraph (A) shall 
                                apply with respect to incandescent 
                                reflector lamps with a diameter of more 
                                than 2.25 inches, but not more than 
                                2.75 inches, on and after the later of 
                                January 1, 2008, or the date that is 
                                180 days after the date of enactment of 
                                the Energy Independence and Security 
                                Act of 2007.
            ``(2) Compliance with existing law.--Notwithstanding 
        section 332(a)(5) and section 332(b), it shall not be unlawful 
        for a manufacturer to sell a lamp that is in compliance with 
        the law at the time the lamp was manufactured.
            ``(3) Rulemaking before october 24, 1995.--
                    ``(A) In general.--Not later than 36 months after 
                October 24, 1992, the Secretary shall initiate a 
                rulemaking procedure and shall publish a final rule not 
                later than the end of the 54-month period beginning on 
                October 24, 1992, to determine whether the standards 
                established under paragraph (1) should be amended.
                    ``(B) Administration.--The rule shall contain the 
                amendment, if any, and provide that the amendment shall 
                apply to products manufactured on or after the 36-month 
                period beginning on the date on which the final rule is 
                published.
            ``(4) Rulemaking before october 24, 2000.--
                    ``(A) In general.--Not later than 8 years after 
                October 24, 1992, the Secretary shall initiate a 
                rulemaking procedure and shall publish a final rule not 
                later than 9 years and 6 months after October 24, 1992, 
                to determine whether the standards in effect for 
                fluorescent lamps and incandescent lamps should be 
                amended.
                    ``(B) Administration.--The rule shall contain the 
                amendment, if any, and provide that the amendment shall 
                apply to products manufactured on or after the 36-month 
                period beginning on the date on which the final rule is 
                published.
            ``(5) Rulemaking for additional general service fluorescent 
        lamps.--
                    ``(A) In general.--Not later than the end of the 
                24-month period beginning on the date labeling 
                requirements under section 324(a)(2)(C) become 
                effective, the Secretary shall--
                            ``(i) initiate a rulemaking procedure to 
                        determine whether the standards in effect for 
                        fluorescent lamps and incandescent lamps should 
                        be amended so that the standards would be 
                        applicable to additional general service 
                        fluorescent lamps; and
                            ``(ii) publish, not later than 18 months 
                        after initiating the rulemaking, a final rule 
                        including the amended standards, if any.
                    ``(B) Administration.--The rule shall provide that 
                the amendment shall apply to products manufactured 
                after a date which is 36 months after the date on which 
                the rule is published.
            ``(6) Standards for general service lamps.--
                    ``(A) Rulemaking before january 1, 2014.--
                            ``(i) In general.--Not later than January 
                        1, 2014, the Secretary shall initiate a 
                        rulemaking procedure to determine whether--
                                    ``(I) standards in effect for 
                                general service lamps should be 
                                amended; and
                                    ``(II) the exclusions for certain 
                                incandescent lamps should be maintained 
                                or discontinued based, in part, on 
                                excluded lamp sales collected by the 
                                Secretary from manufacturers.
                            ``(ii) Scope.--The rulemaking--
                                    ``(I) shall not be limited to 
                                incandescent lamp technologies; and
                                    ``(II) shall include consideration 
                                of a minimum standard of 45 lumens per 
                                watt for general service lamps.
                            ``(iii) Amended standards.--If the 
                        Secretary determines that the standards in 
                        effect for general service lamps should be 
                        amended, the Secretary shall publish a final 
                        rule not later than January 1, 2017, with an 
                        effective date that is not earlier than 3 years 
                        after the date on which the final rule is 
                        published.
                            ``(iv) Phased-in effective dates.--The 
                        Secretary shall consider phased-in effective 
                        dates under this subparagraph after 
                        considering--
                                    ``(I) the impact of any amendment 
                                on manufacturers, retiring and 
                                repurposing existing equipment, 
                                stranded investments, labor contracts, 
                                workers, and raw materials; and
                                    ``(II) the time needed to work with 
                                retailers and lighting designers to 
                                revise sales and marketing strategies.
                            ``(v) Backstop requirement.--If the 
                        Secretary fails to complete a rulemaking in 
                        accordance with clauses (i) through (iv) or if 
                        the final rule does not produce savings that 
                        are greater than or equal to the savings from a 
                        minimum efficacy standard of 45 lumens per 
                        watt, effective beginning January 1, 2020, the 
                        Secretary shall prohibit the manufacture of any 
                        general service lamp that does not meet a 
                        minimum efficacy standard of 45 lumens per 
                        watt.
                            ``(vi) State preemption.--Neither section 
                        327(c) nor any other provision of law shall 
                        preclude California or Nevada from adopting, 
                        effective beginning on or after January 1, 
                        2018--
                                    ``(I) a final rule adopted by the 
                                Secretary in accordance with clauses 
                                (i) through (iv);
                                    ``(II) if a final rule described in 
                                subclause (I) has not been adopted, the 
                                backstop requirement under clause (v); 
                                or
                                    ``(III) in the case of California, 
                                if a final rule described in subclause 
                                (I) has not been adopted, any 
                                California regulations relating to 
                                these covered products adopted pursuant 
                                to State statute in effect as of the 
                                date of enactment of the Energy 
                                Independence and Security Act of 2007.
                    ``(B) Rulemaking before january 1, 2020.--
                            ``(i) In general.--Not later than January 
                        1, 2020, the Secretary shall initiate a 
                        rulemaking procedure to determine whether--
                                    ``(I) standards in effect for 
                                general service lamps should be 
                                amended; and
                                    ``(II) the exclusions for certain 
                                incandescent lamps should be maintained 
                                or discontinued based, in part, on 
                                excluded lamp sales data collected by 
                                the Secretary from manufacturers.
                            ``(ii) Scope.--The rulemaking shall not be 
                        limited to incandescent lamp technologies.
                            ``(iii) Amended standards.--If the 
                        Secretary determines that the standards in 
                        effect for general service lamps should be 
                        amended, the Secretary shall publish a final 
                        rule not later than January 1, 2022, with an 
                        effective date that is not earlier than 3 years 
                        after the date on which the final rule is 
                        published.
                            ``(iv) Phased-in effective dates.--The 
                        Secretary shall consider phased-in effective 
                        dates under this subparagraph after 
                        considering--
                                    ``(I) the impact of any amendment 
                                on manufacturers, retiring and 
                                repurposing existing equipment, 
                                stranded investments, labor contracts, 
                                workers, and raw materials; and
                                    ``(II) the time needed to work with 
                                retailers and lighting designers to 
                                revise sales and marketing strategies.
            ``(7) Federal actions.--
                    ``(A) Comments of secretary.--
                            ``(i) In general.--With respect to any lamp 
                        to which standards are applicable under this 
                        subsection or any lamp specified in section 
                        346, the Secretary shall inform any Federal 
                        entity proposing actions that would adversely 
                        impact the energy consumption or energy 
                        efficiency of the lamp of the energy 
                        conservation consequences of the action.
                            ``(ii) Consideration.--The Federal entity 
                        shall carefully consider the comments of the 
                        Secretary.
                    ``(B) Amendment of standards.--Notwithstanding 
                section 325(n)(1), the Secretary shall not be 
                prohibited from amending any standard, by rule, to 
                permit increased energy use or to decrease the minimum 
                required energy efficiency of any lamp to which 
                standards are applicable under this subsection if the 
                action is warranted as a result of other Federal action 
                (including restrictions on materials or processes) that 
                would have the effect of either increasing the energy 
                use or decreasing the energy efficiency of the product.
            ``(8) Compliance.--
                    ``(A) In general.--Not later than the date on which 
                standards established pursuant to this subsection 
                become effective, or, with respect to high-intensity 
                discharge lamps covered under section 346, the 
                effective date of standards established pursuant to 
                that section, each manufacturer of a product to which 
                the standards are applicable shall file with the 
                Secretary a laboratory report certifying compliance 
                with the applicable standard for each lamp type.
                    ``(B) Contents.--The report shall include the lumen 
                output and wattage consumption for each lamp type as an 
                average of measurements taken over the preceding 12-
                month period.
                    ``(C) Other lamp types.--With respect to lamp types 
                that are not manufactured during the 12-month period 
                preceding the date on which the standards become 
                effective, the report shall--
                            ``(i) be filed with the Secretary not later 
                        than the date that is 12 months after the date 
                        on which manufacturing is commenced; and
                            ``(ii) include the lumen output and wattage 
                        consumption for each such lamp type as an 
                        average of measurements taken during the 12-
                        month period.''.
    (13) Section 325(l)(4)(A) of the Energy Policy and Conservation Act 
(42 U.S.C. 6295(l)(4)(A)) (as amended by section 321(a)(3)(B) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1581)) is 
amended by striking ``only''.
    (14) Section 327(b)(1)(B) of the Energy Policy and Conservation Act 
(42 U.S.C. 6297(b)(1)(B)) (as amended by section 321(d)(3) of the 
Energy Independence and Security Act of 2007 (121 Stat. 1585)) is 
amended--
            (A) in clause (i), by inserting ``and'' after the semicolon 
        at the end;
            (B) in clause (ii), by striking ``; and'' and inserting a 
        period; and
            (C) by striking clause (iii).
    (15) Section 321(e) of the Energy Independence and Security Act of 
2007 (121 Stat. 1586) is amended--
            (A) in the matter preceding paragraph (1), by striking ``is 
        amended'' and inserting ``(as amended by section 306(b)) is 
        amended''; and
            (B) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1) in paragraph (5), by striking `or' after the 
        semicolon at the end;
            ``(2) in paragraph (6), by striking the period at the end 
        and inserting `; or'; and''.
    (16) Section 332(a) of the Energy Policy and Conservation Act (42 
U.S.C. 6302(a)) (as amended by section 321(e) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1586)) is amended by 
redesignating the second paragraph (6) as paragraph (7).
    (17) Section 321(30)(C)(ii) of the Energy Policy and Conservation 
Act (42 U.S.C. 6291(30)(C)(ii)) (as amended by section 322(a)(1)(B) of 
the Energy Independence and Security Act of 2007 (121 Stat. 1587)) is 
amended by inserting a period after ``40 watts or higher''.
    (18) Section 322(b) of the Energy Independence and Security Act of 
2007 (121 Stat. 1588)) is amended by striking ``6995(i)'' and inserting 
``6295(i)''.
    (19) Section 327(c) of the Energy Policy and Conservation Act (42 
U.S.C. 6297(c)) (as amended by sections 324(f) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1594)) is amended--
            (A) in paragraph (6), by striking ``or'' after the 
        semicolon at the end;
            (B) in paragraph (8)(B), by striking ``and'' after the 
        semicolon at the end;
            (C) in paragraph (9)--
                    (i) by striking ``except that--'' and all that 
                follows through ``if the Secretary fails to issue'' and 
                inserting ``except that if the Secretary fails to 
                issue'';
                    (ii) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B), respectively (and by moving 
                the margins of such subparagraphs 2 ems to the left); 
                and
                    (iii) by striking the period at the end and 
                inserting a semicolon; and
            (D) by adding at the end the following:
            ``(10) is a regulation for general service lamps that 
        conforms with Federal standards and effective dates;
            ``(11) is an energy efficiency standard for general service 
        lamps enacted into law by the State of Nevada prior to December 
        19, 2007, if the State has not adopted the Federal standards 
        and effective dates pursuant to subsection (b)(1)(B)(ii); or''.
    (20) Section 325(b) of the Energy Independence and Security Act of 
2007 (121 Stat. 1596)) is amended by striking ``6924(c)'' and inserting 
``6294(c)''.
    (b) Title IV--Energy Savings in Buildings and Industry.--(1) 
Section 401 of the Energy Independence and Security Act of 2007 (42 
U.S.C. 17061) is amended--
            (A) in paragraph (2), by striking ``484'' and inserting 
        ``494''; and
            (B) in paragraph (13), by striking ``Agency'' and inserting 
        ``Administration''.
    (2) Section 422 of the Energy Conservation and Production Act (42 
U.S.C. 6872) (as amended by section 411(a) of the Energy Independence 
and Security Act of 2007 (121 Stat. 1600)) is amended by striking 1 of 
the 2 periods at the end of paragraph (5).
    (3) Section 305(a)(3)(D)(i) of the Energy Conservation and 
Production Act (42 U.S.C. 6834(a)(3)(D)(i)) (as amended by section 
433(a) of the Energy Independence and Security Act of 2007 (121 Stat. 
1612)) is amended--
            (A) in subclause (I)--
                    (i) by striking ``in fiscal year 2003 (as measured 
                by Commercial Buildings Energy Consumption Survey or 
                Residential Energy Consumption Survey data from the 
                Energy Information Agency'' and inserting ``as measured 
                by the calendar year 2003 Commercial Buildings Energy 
                Consumption Survey or the calendar year 2005 
                Residential Energy Consumption Survey data from the 
                Energy Information Administration''; and
                    (ii) in the table at the end, by striking ``Fiscal 
                Year'' and inserting ``Calendar Year''; and
            (B) in subclause (II)--
                    (i) by striking ``(II) Upon petition'' and 
                inserting the following:
                                    ``(II) Downward adjustment of 
                                numeric requirement.--
                                            ``(aa) In general.--On 
                                        petition''; and
                    (ii) by striking the last sentence and inserting 
                the following:
                                            ``(bb) Exceptions to 
                                        requirement for concurrence of 
                                        secretary.--

                                                    ``(AA) In 
                                                general.--The 
                                                requirement to petition 
                                                and obtain the 
                                                concurrence of the 
                                                Secretary under this 
                                                subclause shall not 
                                                apply to any Federal 
                                                building with respect 
                                                to which the 
                                                Administrator of 
                                                General Services is 
                                                required to transmit a 
                                                prospectus to Congress 
                                                under section 3307 of 
                                                title 40, United States 
                                                Code, or to any other 
                                                Federal building 
                                                designed, constructed, 
                                                or renovated by the 
                                                Administrator if the 
                                                Administrator 
                                                certifies, in writing, 
                                                that meeting the 
                                                applicable numeric 
                                                requirement under 
                                                subclause (I) with 
                                                respect to the Federal 
                                                building would be 
                                                technically 
                                                impracticable in light 
                                                of the specific 
                                                functional needs for 
                                                the building.

                                                    ``(BB) 
                                                Adjustment.--In the 
                                                case of a building 
                                                described in subitem 
                                                (AA), the Administrator 
                                                may adjust the 
                                                applicable numeric 
                                                requirement of 
                                                subclause (I) downward 
                                                with respect to the 
                                                building.''.

    (4) Section 436(c)(3) of the Energy Independence and Security Act 
of 2007 (42 U.S.C. 17092(c)(3)) is amended by striking ``474'' and 
inserting ``494''.
    (5) Section 440 of the Energy Independence and Security Act of 2007 
(42 U.S.C. 17096) is amended by striking ``and 482''.
    (6) Section 373(c) of the Energy Policy and Conservation Act (42 
U.S.C. 6343(c)) (as amended by section 451(a) of the Energy 
Independence and Security Act of 2007 (121 Stat. 1628)) is amended by 
striking ``Administrator'' and inserting ``Secretary''.
    (c) Date of Enactment.--Section 1302 of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17382) is amended in the first sentence 
by striking ``enactment'' and inserting ``the date of enactment of this 
Act''.
    (d) Reference.--Section 1306(c)(3) of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17386(c)(3)) is amended by striking 
``section 1307 (paragraph (17) of section 111(d) of the Public Utility 
Regulatory Policies Act of 1978)'' and inserting ``paragraph (19) of 
section 111(d) of the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2621(d))''.
    (e) Effective Date.--This section and the amendments made by this 
section take effect as if included in the Energy Independence and 
Security Act of 2007 (Public Law 110-140; 121 Stat. 1492).

SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY ACT OF 2005.

    (a) Title I--Energy Efficiency.--Section 325(g)(8)(C)(ii) of the 
Energy Policy and Conservation Act (42 U.S.C. 6295(g)(8)(C)(ii)) (as 
added by section 135(c)(2)(B) of the Energy Policy Act of 2005) is 
amended by striking ``20F'' and inserting ``-20F''.
    (b) Effective Date.--This section and the amendments made by this 
section take effect as if included in the Energy Policy Act of 2005 
(Public Law 109-58; 119 Stat. 594).

         Subtitle H--Energy and Efficiency Centers and Research

SEC. 171. ENERGY INNOVATION HUBS.

    (a) Purpose.--The Secretary shall carry out a program to establish 
Energy Innovation Hubs to enhance the Nation's economic, environmental, 
and energy security by promoting commercial application of clean, 
indigenous energy alternatives to oil and other fossil fuels, reducing 
greenhouse gas emissions, and ensuring that the United States maintains 
a technological lead in the development and commercial application of 
state-of-the-art energy technologies. To achieve these purposes the 
program shall--
            (1) leverage the expertise and resources of the university 
        and private research communities, industry, venture capital, 
        national laboratories, and other participants in energy 
        innovation to support cross-disciplinary research and 
        development in areas not being served by the private sector in 
        order to develop and transfer innovative clean energy 
        technologies into the marketplace;
            (2) expand the knowledge base and human capital necessary 
        to transition to a low-carbon economy; and
            (3) promote regional economic development by cultivating 
        clusters of clean energy technology firms, private research 
        organizations, suppliers, and other complementary groups and 
        businesses.
    (b) Definitions.--For purposes of this section:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act 
        (as added by section 311 of this Act).
            (2) Clean energy technology.--The term ``clean energy 
        technology'' means a technology that--
                    (A) produces energy from solar, wind, geothermal, 
                biomass, tidal, wave, ocean, and other renewable energy 
                resources (as such term is defined in section 610 of 
                the Public Utility Regulatory Policies Act of 1978);
                    (B) more efficiently transmits, distributes, or 
                stores energy;
                    (C) enhances energy efficiency for buildings and 
                industry, including combined heat and power;
                    (D) enables the development of a Smart Grid (as 
                described in section 1301 of the Energy Independence 
                and Security Act of 2007 (42 U.S.C. 17381)), including 
                integration of renewable energy resources and 
                distributed generation, demand response, demand side 
                management, and systems analysis;
                    (E) produces an advanced or sustainable material 
                with energy or energy efficiency applications;
                    (F) enhances water security through improved water 
                management, conservation, distribution, and end use 
                applications; or
                    (G) improves energy efficiency for transportation, 
                including electric vehicles.
            (3) Cluster.--The term ``cluster'' means a concentration of 
        firms directly involved in the research, development, finance, 
        and commercialization of clean energy technologies whose 
        geographic proximity facilitates utilization and sharing of 
        skilled human resources, infrastructure, research facilities, 
        educational and training institutions, venture capital, and 
        input suppliers.
            (4) Hub.--The term ``Hub'' means an Energy Innovation Hub 
        established in accordance with this section.
            (5) Project.--The term ``project'' means an activity with 
        respect to which a Hub provides support under subsection (e).
            (6) Qualifying entity.--The term ``qualifying entity'' 
        means each of the following:
                    (A) A research university.
                    (B) A State or Federal institution with a focus on 
                the advancement of clean energy technologies.
                    (C) A nongovernmental organization with research or 
                commercialization expertise in clean energy technology 
                development.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (8) Technology development focus.--The term ``technology 
        development focus'' means the unique technology development 
        areas in which a Hub will specialize, and may include solar 
        electricity, fuels from solar energy, batteries and energy 
        storage, electricity grid systems and devices, energy efficient 
        building systems and design, advanced materials, modeling and 
        simulation, and other clean energy technology development areas 
        designated by the Secretary.
            (9) Translational research.--The term ``translational 
        research'' means coordination of basic or applied research with 
        technical and commercial applications to enable promising 
        discoveries or inventions to attract investment sufficient for 
        market penetration and diffusion.
            (10) Vintage year.--The term ``vintage year'' has the 
        meaning given that term in section 700 of the Clean Air Act (as 
        added by section 312 of this Act).
    (c) Role of the Secretary.--The Secretary shall--
            (1) have ultimate responsibility for, and oversight of, all 
        aspects of the program under this section;
            (2) provide for the distribution of allowances allocated 
        under section 782(h)(1) of the Clean Air Act (as added by 
        section 321 of this Act) to support the establishment of 8 
        Hubs, each with a unique designated technology development 
        focus, pursuant to this section;
            (3) coordinate the innovation activities of Hubs with those 
        occurring through other Department of Energy entities, 
        including the National Laboratories, the Advanced Research 
        Projects Agency--Energy, and Energy Frontier Research 
        Collaborations, and within industry, including by annually--
                    (A) issuing guidance regarding national energy 
                research and development priorities and strategic 
                objectives; and
                    (B) convening a conference of staff of the 
                Department of Energy and representatives from such 
                other entities to share research results, program 
                plans, and opportunities for collaboration.
    (d) Entities Eligible for Support.--A consortium shall be eligible 
to receive allowances to support the establishment of a Hub under this 
section if--
            (1) it is composed of--
                    (A) 2 research universities with a combined annual 
                research budget of $500,000,000; and
                    (B) 1 or more additional qualifying entities;
            (2) its members have established a binding agreement that 
        documents--
                    (A) the structure of the partnership agreement;
                    (B) a governance and management structure to enable 
                cost-effective implementation of the program;
                    (C) an intellectual property management policy;
                    (D) a conflicts of interest policy consistent with 
                subsection (e)(4);
                    (E) an accounting structure that meets the 
                requirements of the Department of Energy and can be 
                audited under subsection (f)(5); and
                    (F) that it has an Advisory Board consistent with 
                subsection (e)(3);
            (3) it receives financial contributions from States, 
        consortium participants, or other non-Federal sources, to be 
        used to support project awards pursuant to subsection (e);
            (4) it is part of an existing cluster or demonstrates high 
        potential to develop a new cluster; and
            (5) it operates as a nonprofit organization.
    (e) Energy Innovation Hubs.--
            (1) Role.--Hubs receiving allowances under this section 
        shall support translational research activities leading to 
        commercial application of clean energy technologies, in 
        accordance with the purposes of this section, through issuance 
        of awards to projects managed by qualifying entities and other 
        entities meeting the Hub's project criteria, including national 
        laboratories. Each such Hub shall--
                    (A) develop and publish for public review and 
                comment proposed plans, programs, project selection 
                criteria, and terms for individual project awards under 
                this subsection;
                    (B) submit an annual report to the Secretary 
                summarizing the Hub's activities, organizational 
                expenditures, and Board members, which shall include a 
                certification of compliance with conflict of interest 
                policies and a description of each project in the 
                research portfolio;
                    (C) establish policies--
                            (i) regarding intellectual property 
                        developed as a result of Hub awards and other 
                        forms of technology support that encourage 
                        individual ingenuity and invention while 
                        speeding technology transfer and facilitating 
                        the establishment of rapid commercialization 
                        pathways;
                            (ii) to prevent resources provided to the 
                        Hub from being used to displace private sector 
                        investment otherwise likely to occur, including 
                        investment from private sector entities that 
                        are members of the consortium;
                            (iii) to facilitate the participation of 
                        private investment firms or other private 
                        entities that invest in clean energy 
                        technologies to perform due diligence on award 
                        proposals, to participate in the award review 
                        process, and to provide guidance to projects 
                        supported by the Hub; and
                            (iv) to facilitate the participation of 
                        entrepreneurs with a demonstrated history of 
                        developing and commercializing clean energy 
                        technologies;
                    (D) oversee project solicitations, review proposed 
                projects, and select projects for awards; and
                    (E) monitor project implementation.
            (2) Distribution of awards by hubs.--A Hub shall distribute 
        awards under this subsection to support clean energy technology 
        projects conducting translational research and related 
        activities, provided that at least 50 percent of such support 
        shall be provided to projects related to the Hub's technology 
        development focus.
            (3) Advisory boards.--
                    (A) In general.--Each Hub shall establish an 
                Advisory Board, the members of which shall have 
                extensive and relevant scientific, technical, industry, 
                financial, or research management expertise. The 
                Advisory Board shall review the Hub's proposed plans, 
                programs, project selection criteria, and projects and 
                shall ensure that projects selected for awards meet the 
                conflict of interest policies of the Hub. Advisory 
                Board members other than those representing consortium 
                members shall serve for no more than 3 years. All 
                Advisory Board members shall comply with the Hub's 
                conflict of interest policies and procedures.
                    (B) Members.--Each Advisory Board shall consist 
                of--
                            (i) 5 members selected by the consortium's 
                        research universities;
                            (ii) 2 members selected by the consortium's 
                        other qualifying entities;
                            (iii) 2 members selected at large by other 
                        Advisory Board members to represent the 
                        entrepreneur and venture capital communities; 
                        and
                            (iv) 1 member appointed by the Secretary.
                    (D) Compensation.--Members of an Advisory Board may 
                receive reimbursement for travel expenses and a 
                reasonable stipend.
            (4) Conflict of interest.--
                    (A) Procedures.--Hubs shall establish procedures to 
                ensure that any employee or consortia designee for Hub 
                activities who serves in a decisionmaking capacity 
                shall--
                            (i) disclose any financial interests in, or 
                        financial relationships with, applicants for or 
                        recipients of awards under this subsection, 
                        including those of his or her spouse or minor 
                        child, unless such relationships or interests 
                        would be considered to be remote or 
                        inconsequential; and
                            (ii) recuse himself or herself from any 
                        funding decision for projects in which he or 
                        she has a personal financial interest.
                    (B) Disqualification and revocation.--The Secretary 
                may disqualify an application or revoke allowances 
                distributed to the Hub or awards provided under this 
                subsection, if cognizant officials of the Hub fail to 
                comply with procedures required under subparagraph (A).
    (f) Distribution of Allowances to Energy Innovation Hubs.--
            (1) Distribution of allowances.--Not later than September 
        30 of 2011 and each calendar year thereafter through 2049, the 
        Secretary shall, in accordance with the requirements of this 
        section, distribute to eligible consortia allowances allocated 
        for the following vintage year under section 782(h)(1) of the 
        Clean Air Act (as added by section 321 of this Act). Not less 
        than 10 percent and not more than 30 percent of the allowances 
        available for distribution in any given year shall be 
        distributed to support any individual Hub under this section.
            (2) Selection and schedule.--Allowances to support the 
        establishment of a Hub shall be distributed to eligible 
        consortia (as defined in subsection (d)) selected through a 
        competitive process. Not later than 120 days after the date of 
        enactment of this Act, the Secretary shall solicit proposals 
        from eligible consortia to establish Hubs, which shall be 
        submitted not later than 180 days after the date of enactment 
        of this Act. The Secretary shall select the program consortia 
        not later than 270 days after the date of enactment of this 
        Act. For at least 3 awards to consortia under this section, the 
        Secretary shall give special consideration to applications in 
        which 1 or more of the institutions under subsection (d)(1)(A) 
        are 1890 Land Grant Institutions (as defined in section 2 of 
        the Agricultural Research, Extension, and Education Reform Act 
        of 1998 (7 U.S.C. 7061)), Predominantly Black Institutions (as 
        defined in section 318 of the Higher Education Act of 1965 (20 
        U.S.C. 1059e)), Tribal Colleges or Universities (as defined in 
        section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 
        1059c(b)), or Hispanic Serving Institutions (as defined in 
        section 318 of the Higher Education Act of 1965 (20 U.S.C. 
        1059e)).
            (3) Amount and term of awards.--For each Hub selected to 
        receive an award under this subsection, the Secretary shall 
        define a quantity of allowances that shall be distributed to 
        such Hub each year for an initial period not to exceed 5 years. 
        The Secretary may extend the term of such award by up to 5 
        additional years, and a Hub may compete to receive an increase 
        in the quantity of allowances per year that it shall receive 
        during any such extension. A Hub shall be eligible to compete 
        for a new award after the expiration of the term of any award, 
        including any extension of such term, under this subsection.
            (4) Use of allowances.--Allowances distributed under this 
        section shall be used exclusively to support project awards 
        pursuant to subsection (e)(1) and (2), provided that a Hub may 
        use not more than 10 percent of the value of such allowances 
        for its administrative expenses related to making such awards. 
        Allowances distributed under this section shall not be used for 
        construction of new buildings or facilities for Hubs, and 
        construction of new buildings or facilities shall not be 
        considered as part of the non-Federal share of a cost sharing 
        agreement under this section.
            (5) Audit.--Each Hub shall conduct, in accordance with such 
        requirements as the Secretary may prescribe, an annual audit to 
        determine the extent to which allowances distributed to the Hub 
        under this subsection, and awards under subsection (e), have 
        been utilized in a manner consistent with this section. The 
        auditor shall transmit a report of the results of the audit to 
        the Secretary and to the Government Accountability Office. The 
        Secretary shall include such report in an annual report to 
        Congress, along with a plan to remedy any deficiencies cited in 
        the report. The Government Accountability Office may review 
        such audits as appropriate and shall have full access to the 
        books, records, and personnel of the Hub to ensure that 
        allowances distributed to the Hub under this subsection, and 
        awards made under subsection (e), have been utilized in a 
        manner consistent with this section.
            (6) Revocation of allowances.--The Secretary shall have 
        authority to review awards made under this subsection and to 
        revoke such awards if the Secretary determines that a Hub has 
        used the award in a manner not consistent with the requirements 
        of this section.

SEC. 172. ADVANCED ENERGY RESEARCH.

    (a) Definitions.--For purposes of this section:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act 
        (as added by section 311 of this Act).
            (2) Director.--The term ``Director'' means Director of the 
        Advanced Research Projects Agency-Energy.
    (b) In General.--Not later than September 30 of 2011 and each 
calendar year thereafter through 2049, the Director shall distribute 
allowances allocated for the following vintage year under section 
782(h)(2) of the Clean Air Act (as added by section 321 of this Act). 
Such allowances shall be distributed on a competitive basis to 
institutions of higher education, companies, research foundations, 
trade and industry research collaborations, or consortia of such 
entities, or other appropriate research and development entities to 
achieve the goals of the Advanced Research Projects Agency-Energy (as 
described in section 5012(c) of the America COMPETES Act) through 
targeted acceleration of--
            (1) novel early-stage energy research with possible 
        technology applications;
            (2) development of techniques, processes, and technologies, 
        and related testing and evaluation;
            (3) development of manufacturing processes for 
        technologies; and
            (4) demonstration and coordination with nongovernmental 
        entities for commercial applications of technologies and 
        research applications.
    (c) Responsibilities.--The Director shall be responsible for 
assessing the success of programs and terminating programs carried out 
under this section that are not achieving the goals of the programs, 
consistent with 5012(e)(2) and (4) of the America COMPETES Act. The 
Director shall designate program managers whose responsibilities are 
consistent with 5012(f)(1)(B) of the America COMPETES Act. The 
Director's reporting and coordination requirements established through 
5012(g) and (h) of the America COMPETES Act shall apply to activities 
funded through this section.
    (d) Supplement Not Supplant.--Assistance provided under this 
section shall be used to supplement, and not to supplant, any other 
Federal resources available to carry out activities described in this 
section.

SEC. 173. BUILDING ASSESSMENT CENTERS.

    (a) In General.--The Secretary of Energy (in this section referred 
to as the ``Secretary'') shall provide funding to institutions of 
higher education for Building Assessment Centers to--
            (1) identify opportunities for optimizing energy efficiency 
        and environmental performance in existing buildings;
            (2) promote high-efficiency building construction 
        techniques and materials options;
            (3) promote applications of emerging concepts and 
        technologies in commercial and institutional buildings;
            (4) train engineers, architects, building scientists, and 
        building technicians in energy-efficient design and operation;
            (5) assist local community colleges, trade schools, 
        registered apprenticeship programs and other accredited 
        training programs in training building technicians;
            (6) promote research and development for the use of 
        alternative energy sources to supply heat and power, for 
        buildings, particularly energy-intensive buildings; and
            (7) coordinate with and assist State-accredited technical 
        training centers and community colleges, while ensuring 
        appropriate services to all regions of the United States.
    (b) Coordination With Regional Centers for Energy and Environmental 
Knowledge and Outreach.--A Building Assessment Center may serve as a 
Center for Energy and Environmental Knowledge and Outreach established 
pursuant to section 174.
    (c) Coordination and Duplication.--The Secretary shall coordinate 
efforts under this section with other programs of the Department of 
Energy and other Federal agencies to avoid duplication of effort.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section $50,000,000 for 
fiscal year 2010 and each fiscal year thereafter.

SEC. 174. CENTERS FOR ENERGY AND ENVIRONMENTAL KNOWLEDGE AND OUTREACH.

    (a) Regional Centers for Energy and Environmental Knowledge and 
Outreach.--
            (1) Establishment.--The Secretary shall establish not more 
        than 10 regional Centers for Energy and Environmental Knowledge 
        and Outreach at institutions of higher education to coordinate 
        with and advise industrial research and assessment centers, 
        Building Assessment Centers, and Clean Energy Application 
        Centers located in the region of such Center for Energy and 
        Environmental Knowledge and Outreach.
            (2) Technical assistance programs.--Each Center for Energy 
        and Environmental Knowledge and Outreach shall consist of at 
        least one, new or existing, high performing, of the following:
                    (A) An industrial research and assessment center.
                    (B) A Clean Energy Application Center.
                    (C) A Building Assessment Center.
            (3) Selection criteria.--The Secretary shall select Centers 
        for Energy and Environmental Knowledge and Outreach through a 
        competitive process, based on the following:
                    (A) Identification of the highest performing 
                industrial research and assessment centers, Clean 
                Energy Application Centers, and Building Assessment 
                Centers.
                    (B) The degree to which an institution of higher 
                education maintains credibility among regional private 
                sector organizations such as trade associations, 
                engineering associations, and environmental 
                organizations.
                    (C) The degree to which an institution of higher 
                education is providing or has provided technical 
                assistance, academic leadership, and market leadership 
                in the energy arena in a manner that is consistent with 
                the areas of focus of industrial research and 
                assessment centers, Clean Energy Application Centers, 
                and Building Assessment Centers.
                    (D) The presence of an additional industrial 
                research and assessment center, Clean Energy 
                Application Center, or Building Assessment Center at 
                the institution of higher education.
            (4) Geographic diversity.--In selecting Centers for Energy 
        and Environmental Knowledge and Outreach under this subsection, 
        the Secretary shall ensure such Centers are distributed 
        geographically in a relatively uniform manner to ensure all 
        regions of the Nation are represented.
            (5) Regional leadership.--Each Center for Energy and 
        Environmental Knowledge and Outreach shall, to the extent 
        possible, provide leadership to all other industrial research 
        and assessment centers, Clean Energy Application Centers, and 
        Building Assessment Centers located in the Center's geographic 
        region, as determined by the Secretary. Such leadership shall 
        include--
                    (A) developing regional goals specific to the 
                purview of the industrial research and assessment 
                centers, Clean Energy Application Centers, and Building 
                Assessment Centers programs;
                    (B) developing regionally specific technical 
                resources; and
                    (C) outreach to interested parties in the region to 
                inform them of the information, resources, and services 
                available through the associated industrial research 
                and assessment centers, Clean Energy Application 
                Centers, and Building Assessment Centers.
            (6) Further coordination.--To increase the value and 
        capabilities of the regionally associated industrial research 
        and assessment centers, Clean Energy Application Centers, and 
        Building Assessment Centers programs, Centers for Energy and 
        Environmental Knowledge and Outreach shall--
                    (A) coordinate with Manufacturing Extension 
                Partnership Centers of the National Institute of 
                Science and Technology;
                    (B) coordinate with the relevant programs in the 
                Department of Energy, including the Building Technology 
                Program and Industrial Technologies Program;
                    (C) increase partnerships with the National 
                Laboratories of the Department of Energy to leverage 
                the expertise and technologies of the National 
                Laboratories to achieve the goals of the industrial 
                research and assessment centers, Clean Energy 
                Application Centers, and Building Assessment Centers;
                    (D) work with relevant municipal, county, and State 
                economic development entities to leverage relevant 
                financial incentives for capital investment and other 
                policy tools for the protection and growth of local 
                business and industry;
                    (E) partner with local professional and private 
                trade associations and business development interests 
                to leverage existing knowledge of local business 
                challenges and opportunities;
                    (F) work with energy utilities and other 
                administrators of publicly funded energy programs to 
                leverage existing energy efficiency and clean energy 
                programs;
                    (G) identify opportunities for reducing greenhouse 
                gas emissions; and
                    (H) promote sustainable business practices for 
                those served by the industrial research and assessment 
                centers, Clean Energy Application Centers, and Building 
                Assessment Centers.
            (7) Workforce training.--
                    (A) In general.--The Secretary shall require each 
                Center for Energy and Environmental Knowledge and 
                Outreach to establish or maintain an internship program 
                for the region of such Center, designed to encourage 
                students who perform energy assessments to continue 
                working with a particular company, building, or 
                facility to help implement the recommendations 
                contained in any such assessment provided to such 
                company, building, or facility. Each Center for Energy 
                and Environmental Knowledge and Outreach shall act as 
                internship coordinator to help match students to 
                available opportunities.
                    (B) Federal share.--The Federal share of the cost 
                of carrying out internship programs described under 
                subparagraph (A) shall be 50 percent.
                    (C) Funding.--Subject to the availability of 
                appropriations, of the funds made available to carry 
                out this subsection, the Secretary shall use to carry 
                out this paragraph not less than $5,000,000 for fiscal 
                year 2010 and each fiscal year thereafter.
            (8) Small business loans.--The Administrator of the Small 
        Business Administration shall, to the maximum practicable, 
        expedite consideration of applications from eligible small 
        business concerns for loans under the Small Business Act (15 
        U.S.C. 631 et seq.) for loans to implement recommendations of 
        any industrial research and assessment center, Clean Energy 
        Application Center, or Building Assessment Center.
            (9) Definitions.--In this subsection:
                    (A) Industrial research and assessment center.--The 
                term ``industrial research and assessment center'' 
                means a center established or maintained pursuant to 
                section 452(e) of the Energy Independence and Security 
                Act of 2007 (42 U.S.C. 17111(e)).
                    (B) Clean energy application center.--The term 
                ``Clean Energy Application Center'' means a center 
                redesignated and described section under section 375 of 
                the Energy Policy and Conservation Act (42 U.S.C. 
                6345).
                    (C) Building assessment center.--The term 
                ``Building Assessment Center'' means an institution of 
                higher education-based center established pursuant to 
                section 173.
                    (D) Secretary.--The term ``Secretary'' means the 
                Secretary of Energy.
            (10) Funding.--There are authorized to be appropriated to 
        the Secretary to carry out this subsection $10,000,000 for 
        fiscal year 2010 and each fiscal year thereafter. Subject to 
        the availability of appropriations, of the funds made available 
        to carry out this subsection, the Secretary shall provide to 
        each Center for Energy and Environmental Knowledge and Outreach 
        not less than $500,000 for fiscal year 2010 and each fiscal 
        year thereafter.
    (b) Integration of Other Technical Assistance Programs.--
            (1) Clean energy application centers.--Section 375 of the 
        Energy Policy and Conservation Act (42 U.S.C. 6345) is 
        amended--
                    (A) by redesignating subsection (f) as subsection 
                (g); and
                    (B) by adding after subsection (e) the following 
                new subsection:
    ``(f) Coordination With Centers for Energy and Environmental 
Knowledge and Outreach.--A Clean Energy Application Center may serve as 
a Center for Energy and Environmental Knowledge and Outreach 
established pursuant to section 174 of the American Clean Energy and 
Security Act of 2009.''.
            (2) Industrial research and assessment centers.--Section 
        452(e) of the Energy Independence and Security Act of 2007 (42 
        U.S.C. 17111(e)) is amended--
                    (A) by striking ``The Secretary'' and all that 
                follows through ``shall be--'' and inserting the 
                following:
            ``(1) In general.--The Secretary shall provide funding to 
        institution of higher education-based industrial research and 
        assessment centers, whose purposes shall be--'';
                    (B) by redesignating paragraphs (1) through (5) as 
                subparagraphs (A) through (E), respectively (and by 
                moving the margins of such subparagraphs 2 ems to the 
                right); and
                    (C) by adding at the end the following new 
                paragraph:
            ``(2) Coordination with centers for energy and 
        environmental knowledge and outreach.--An industrial research 
        and assessment center may serve as a Center for Energy and 
        Environmental Knowledge and Outreach established pursuant to 
        section 174 of the American Clean Energy and Security Act of 
        2009.''.
    (c) Additional Funding for Clean Energy Application Centers.--
Subsection (g) of section 375 of the Energy Policy and Conservation Act 
(42 U.S.C. 6345(f)), as redesignated by subsection (b)(1) of this 
section, is amended by striking ``$10,000,000 for each of fiscal years 
2008 through 2012'' and inserting ``$30,000,000 for fiscal year 2010 
and each fiscal year thereafter''.

             Subtitle I--Nuclear and Advanced Technologies

SEC. 181. REVISIONS TO LOAN GUARANTEE PROGRAM AUTHORITY.

    (a) Definition of Conditional Commitment.--Section 1701 of the 
Energy Policy Act of 2005 (42 U.S.C. 16511), as amended by section 
130(a) of this Act, is amended by adding after paragraph (7) the 
following:
            ``(8) Conditional commitment.--The term `conditional 
        commitment' means a final term sheet negotiated between the 
        Secretary and a project sponsor or sponsors, which term sheet 
        shall be binding on both parties and become a final loan 
        guarantee agreement if all conditions precedent established in 
        the term sheet, which shall include the acquisition of all 
        necessary permits and licenses, are satisfied.''.
    (b) Specific Appropriation or Contribution.--Section 1702 of the 
Energy Policy Act of 2005 (42 U.S.C. 16512) is amended by striking 
subsection (b) and inserting the following:
    ``(b) Specific Appropriation or Contribution.--
            ``(1) In general.--No guarantee shall be made unless--
                    ``(A) an appropriation for the cost has been made;
                    ``(B) the Secretary has received from the borrower 
                a payment in full for the cost of the obligation and 
                deposited the payment into the Treasury; or
                    ``(C) a combination of appropriations or payments 
                from the borrower has been made sufficient to cover the 
                cost of the obligation.
            ``(2) Limitation.--The source of payments received from a 
        borrower under paragraph (1)(B) shall not be a loan or other 
        debt obligation that is made or guaranteed by the Federal 
        Government.''.
    (c) Fees.--Section 1702(h) of the Energy Policy Act of 2005 (42 
U.S.C. 16512(h)) is amended by striking paragraph (2) and inserting the 
following:
            ``(2) Availability.--Fees collected under this subsection 
        shall--
                    ``(A) be deposited by the Secretary into a special 
                fund in the Treasury to be known as the `Incentives For 
                Innovative Technologies Fund'; and
                    ``(B) remain available to the Secretary for 
                expenditure, without further appropriation or fiscal 
                year limitation, for administrative expenses incurred 
                in carrying out this title.''.
    (d) Wage Rate Requirements.--Section 1702 of the Energy Policy Act 
of 2005 (42 U.S.C. 16512) is amended by adding at the end the following 
new subsection:
    ``(k) Wage Rate Requirements.--No loan guarantee shall be made 
under this title unless the borrower has provided to the Secretary 
reasonable assurances that all laborers and mechanics employed by 
contractors and subcontractors in the performance of construction work 
financed in whole or in part by the guaranteed loan will be paid wages 
at rates not less than those prevailing on projects of a character 
similar to the contract work in the civil subdivision of the State in 
which the contract work is to be performed as determined by the 
Secretary of Labor in accordance with subchapter IV of chapter 31 of 
part A of subtitle II of title 40, United States Code. With respect to 
the labor standards specified in this subsection, the Secretary of 
Labor shall have the authority and functions set forth in 
Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) 
and section 3145 of title 40, United States Code.''.
    (e) Subrogation.--Section 1702(g)(2) of the Energy Policy Act of 
2005 (42 U.S.C. 16512(g)(2)) is amended by striking subparagraphs (B) 
and (C) and inserting the following:
                    ``(B) Superiority of rights.--Except as provided in 
                subparagraph (C), the rights of the Secretary, with 
                respect to any property acquired pursuant to a 
                guarantee or related agreements, shall be superior to 
                the rights of any other person with respect to the 
                property.
                    ``(C) Terms and conditions.--A guarantee agreement 
                shall include such detailed terms and conditions as the 
                Secretary determines appropriate to--
                            ``(i) protect the financial interests of 
                        the United States in the case of default;
                            ``(ii) have available all the patents and 
                        technology necessary for any person selected, 
                        including the Secretary, to complete and 
                        operate the project;
                            ``(iii) provide for sharing the proceeds 
                        received from the sale of project assets with 
                        other creditors or control the disposition of 
                        project assets if necessary to protect the 
                        financial interests of the United States in the 
                        case of default; and
                            ``(iv) provide such lien priority in 
                        project assets as necessary to protect the 
                        financial interests of the United States in the 
                        case of a default.''.

SEC. 182. PURPOSE.

    The purpose of sections 183 through 189 of this subtitle is to 
promote the domestic development and deployment of clean energy 
technologies required for the 21st century through the establishment of 
a self-sustaining Clean Energy Deployment Administration that will 
provide for an attractive investment environment through partnership 
with and support of the private capital market in order to promote 
access to affordable financing for accelerated and widespread 
deployment of--
            (1) clean energy technologies;
            (2) advanced or enabling energy infrastructure 
        technologies;
            (3) energy efficiency technologies in residential, 
        commercial, and industrial applications, including end-use 
        efficiency in buildings; and
            (4) manufacturing technologies for any of the technologies 
        or applications described in this section.

SEC. 183. DEFINITIONS.

    In this subtitle:
            (1) Administration.--The term ``Administration'' means the 
        Clean Energy Deployment Administration established by section 
        186.
            (2) Advisory council.--The term ``Advisory Council'' means 
        the Energy Technology Advisory Council of the Administration.
            (3) Breakthrough technology.--The term ``breakthrough 
        technology'' means a clean energy technology that--
                    (A) presents a significant opportunity to advance 
                the goals developed under section 185, as assessed 
                under the methodology established by the Advisory 
                Council; but
                    (B) has generally not been considered a 
                commercially ready technology as a result of high 
                perceived technology risk or other similar factors.
            (4) Clean energy technology.--The term ``clean energy 
        technology'' means a technology related to the production, use, 
        transmission, storage, control, or conservation of energy--
                    (A) that will contribute to a stabilization of 
                atmospheric greenhouse gas concentrations thorough 
                reduction, avoidance, or sequestration of energy-
                related emissions and--
                            (i) reduce the need for additional energy 
                        supplies by using existing energy supplies with 
                        greater efficiency or by transmitting, 
                        distributing, or transporting energy with 
                        greater effectiveness through the 
                        infrastructure of the United States; or
                            (ii) diversify the sources of energy supply 
                        of the United States to strengthen energy 
                        security and to increase supplies with a 
                        favorable balance of environmental effects if 
                        the entire technology system is considered; and
                    (B) for which, as determined by the Administrator, 
                insufficient commercial lending is available at 
                affordable rates to allow for widespread deployment.
            (5) Cost.--The term ``cost'' has the meaning given the term 
        in section 502 of the Federal Credit Reform Act of 1990 (2 
        U.S.C. 661a).
            (6) Direct loan.--The term ``direct loan'' has the meaning 
        given the term in section 502 of the Federal Credit Reform Act 
        of 1990 (2 U.S.C. 661a).
            (7) Fund.--The term ``Fund'' means the Clean Energy 
        Investment Fund established by section 184(a).
            (8) Green bonds.--The term ``Green Bonds'' means bonds 
        issued pursuant to section 184.
            (8) Loan guarantee.--The term ``loan guarantee'' has the 
        meaning given the term in section 502 of the Federal Credit 
        Reform Act of 1990 (2 U.S.C. 661a).
            (9) National laboratory.--The term ``National Laboratory'' 
        has the meaning given the term in section 2 of the Energy 
        Policy Act of 2005 (42 U.S.C. 15801).
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (11) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.
            (12) Technology risk.--The term ``technology risk'' means 
        the risks during construction or operation associated with the 
        design, development, and deployment of clean energy 
        technologies (including the cost, schedule, performance, 
        reliability and maintenance, and accounting for the perceived 
        risk), from the perspective of commercial lenders, that may be 
        increased as a result of the absence of adequate historical 
        construction, operating, or performance data from commercial 
        applications of the technology.

SEC. 184. CLEAN ENERGY INVESTMENT FUND.

    (a) Establishment.--There is established in the Treasury of the 
United States a revolving fund, to be known as the ``Clean Energy 
Investment Fund'', consisting of--
            (1) such amounts as are deposited in the Fund under this 
        subtitle; and
            (2) such sums as may be appropriated to supplement the 
        Fund.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Fund such sums as are necessary to carry out this 
subtitle.
    (c) Expenditures From Fund.--
            (1) In general.--Amounts in the Fund shall be available to 
        the Administrator of the Administration for obligation without 
        fiscal year limitation, to remain available until expended.
            (2) Administrative expenses.--
                    (A) Fees.--Fees collected for administrative 
                expenses shall be available without limitation to cover 
                applicable expenses.
                    (B) Fund.--To the extent that administrative 
                expenses are not reimbursed through fees, an amount not 
                to exceed 1.5 percent of the amounts in the Fund as of 
                the beginning of each fiscal year shall be available to 
                pay the administrative expenses for the fiscal year 
                necessary to carry out this subtitle.
    (d) Transfers of Amounts.--
            (1) In general.--The amounts required to be transferred to 
        the Fund under this section shall be transferred at least 
        monthly from the general fund of the Treasury to the Fund on 
        the basis of estimates made by the Secretary of the Treasury.
            (2) Adjustments.--Proper adjustment shall be made in 
        amounts subsequently transferred to the extent prior estimates 
        were in excess of or less than the amounts required to be 
        transferred.
            (3) Cash flows.--Cash flows associated with costs of the 
        Fund described in section 502(5)(B) of the Federal Credit 
        Reform Act of 1990 (2 U.S.C. 661a(5)(B)) shall be transferred 
        to appropriate credit accounts.
    (e) Green Bonds.--
            (1) Initial capitalization.--The Secretary of the Treasury 
        shall issue Green Bonds in the amount of $7,500,000,000 on the 
        credit of the United States to acquire capital stock of the 
        Administration. Stock certificates evidencing ownership in the 
        Administration shall be issued by the Administration to the 
        Secretary of the Treasury, to the extent of payments made for 
        the capital stock of the Administration.
            (2) Denominations and maturity.--Green Bonds shall be in 
        such forms and denominations, and shall mature within such 
        periods, as determined by the Secretary of the Treasury.
            (3) Interest.--Green Bonds shall bear interest at a rate 
        not less than the current average yield on outstanding market 
        obligations of the United States of comparable maturity during 
        the month preceding the issuance of the obligation as 
        determined by the Secretary of the Treasury.
            (4) Lawful investments.--Green Bonds shall be lawful 
        investments, and may be accepted as security for all fiduciary, 
        trust, and public funds, the investment or deposit of which 
        shall be under the authority or control of the United States or 
        any officer or officers thereof.

SEC. 185. ENERGY TECHNOLOGY DEPLOYMENT GOALS.

    (a) Goals.--Not later than 1 year after the date of enactment of 
this Act, the Secretary, after consultation with the Advisory Council, 
shall develop and publish for review and comment in the Federal 
Register recommended near-, medium-, and long-term goals (including 
numerical performance targets at appropriate intervals to measure 
progress toward those goals) for the deployment of clean energy 
technologies through the credit support programs established by section 
187 to promote--
            (1) sufficient electric generating capacity using clean 
        energy technologies to meet the energy needs of the United 
        States;
            (2) clean energy technologies in vehicles and fuels that 
        will substantially reduce the reliance of the United States on 
        foreign sources of energy and insulate consumers from the 
        volatility of world energy markets;
            (3) a domestic commercialization and manufacturing capacity 
        that will establish the United States as a world leader in 
        clean energy technologies across multiple sectors;
            (4) installation of sufficient infrastructure to allow for 
        the cost-effective deployment of clean energy technologies 
        appropriate to each region of the United States;
            (5) the transformation of the building stock of the United 
        States to zero net energy consumption;
            (6) the recovery, use, and prevention of waste energy;
            (7) domestic manufacturing of clean energy technologies on 
        a scale that is sufficient to achieve price parity with 
        conventional energy sources;
            (8) domestic production of commodities and materials (such 
        as steel, chemicals, polymers, and cement) using clean energy 
        technologies so that the United States will become a world 
        leader in environmentally sustainable production of the 
        commodities and materials;
            (9) a robust, efficient, and interactive electricity 
        transmission grid that will allow for the incorporation of 
        clean energy technologies, distributed generation, and demand-
        response in each regional electric grid;
            (10) sufficient availability of financial products to allow 
        owners and users of residential, retail, commercial, and 
        industrial buildings to make energy efficiency and distributed 
        generation technology investments with reasonable payback 
        periods; and
            (11) such other goals as the Secretary, in consultation 
        with the Advisory Council, determines to be consistent with the 
        purpose stated in section 182.
    (b) Revisions.--The Secretary shall revise the goals established 
under subsection (a), from time to time as appropriate, to account for 
advances in technology and changes in energy policy.

SEC. 186. CLEAN ENERGY DEPLOYMENT ADMINISTRATION.

    (a) Establishment.--
            (1) Establishment of corporation.--There is established a 
        corporation to be known as the Clean Energy Deployment 
        Administration that shall be wholly owned by the United States.
            (2) Independent corporation.--The Administration shall be 
        an independent corporation. Neither the Administration nor any 
        of its functions, powers, or duties shall be transferred to or 
        consolidated with any other department, agency, or corporation 
        of the Government unless the Congress provides otherwise.
            (3) Charter.--The Administration shall be chartered for 20 
        years from the date of enactment of this section.
            (4) Status.--
                    (A) Inspector general.--Section 12 of the Inspector 
                General Act of 1978 (5 U.S.C. App.) is amended--
                            (i) in paragraph (1), by inserting ``the 
                        Administrator of the Clean Energy Deployment 
                        Administration;'' after ``Export-Import 
                        Bank;''; and
                            (ii) in paragraph (2), by inserting ``the 
                        Clean Energy Deployment Administration,'' after 
                        ``Export-Import Bank,''.
            (3) Offices.--
                    (A) Principal office.--The Administration shall--
                            (i) maintain the principal office of the 
                        Administration in the national capital region; 
                        and
                            (ii) for purposes of venue in civil 
                        actions, be considered to be a resident of the 
                        District of Columbia.
                    (B) Other offices.--The Administration may 
                establish other offices in such other places as the 
                Administration considers necessary or appropriate for 
                the conduct of the business of the Administration.
    (b) Administrator.--
            (1) In general.--The Administrator of the Administration 
        shall be--
                    (A) appointed by the President, with the advice and 
                consent of the Senate, for a 5-year term; and
                    (B) compensated at the prevailing rate for 
                compensation for similar positions in industry.
            (2) Duties.--The Administrator of the Administration 
        shall--
                    (A) serve as the Chief Executive Officer of the 
                Administration and Chairman of the Board;
                    (B) ensure that--
                            (i) the Administration operates in a safe 
                        and sound manner, including maintenance of 
                        adequate capital and internal controls 
                        (consistent with section 404 of the Sarbanes-
                        Oxley Act of 2002 (15 U.S.C. 7262));
                            (ii) the operations and activities of the 
                        Administration foster liquid, efficient, 
                        competitive, and resilient energy and energy 
                        efficiency finance markets;
                            (iii) the Administration carries out the 
                        purpose stated in section 182 only through 
                        activities that are authorized under and 
                        consistent with sections 182 through 189; and
                            (iv) the activities of the Administration 
                        and the manner in which the Administration is 
                        operated are consistent with the public 
                        interest;
                    (C) develop policies and procedures for the 
                Administration that will--
                            (i) promote a self-sustaining portfolio of 
                        investments that will maximize the value of 
                        investments to effectively promote clean energy 
                        technologies;
                            (ii) promote transparency and openness in 
                        Administration operations;
                            (iii) afford the Administration with 
                        sufficient flexibility to meet the purpose 
                        stated in section 182; and
                            (iv) provide for the efficient processing 
                        of applications; and
                    (D) with the concurrence of the Board, set expected 
                loss reserves for the support provided by the 
                Administration consistent with section 187(c).
    (c) Board of Directors.--
            (1) In general.--The Board of Directors of the 
        Administration shall consist of--
                    (A) the Secretary or the designee of the Secretary, 
                who shall serve as an ex-officio member of the Board of 
                Directors;
                    (B) the Secretary of the Treasury or the designee 
                of the Secretary, who shall serve as an ex-officio 
                member of the Board of Directors;
                    (C) the Secretary of the Interior or the designee 
                of the Secretary, who shall serve as an ex-officio 
                member of the Board of Directors;
                    (D) the Secretary of Agriculture or the designee of 
                the Secretary, who shall serve as an ex officio member 
                of the Board of Directors;
                    (E) the Administrator of the Administration, who 
                shall serve as the Chairman of the Board of Directors; 
                and
                    (F) 4 additional members who shall--
                            (i) be appointed by the President, with the 
                        advice and consent of the Senate, for staggered 
                        5-year terms; and
                            (ii) have experience in banking, financial 
                        services, technology assessment, energy 
                        regulation, or risk management, including 
                        individuals with substantial experience in the 
                        development of energy projects, the electricity 
                        generation sector, the transportation sector, 
                        the manufacturing sector, and the energy 
                        efficiency sector.
            (2) Duties.--The Board of Directors shall--
                    (A) oversee the operations of the Administration 
                and ensure industry best practices are followed in all 
                financial transactions involving the Administration;
                    (B) consult with the Administrator of the 
                Administration on the general policies and procedures 
                of the Administration to ensure the interests of the 
                taxpayers are protected;
                    (C) ensure the portfolio of investments are 
                consistent with purpose stated in section 182 and with 
                the long-term financial stability of the 
                Administration;
                    (D) ensure that the operations and activities of 
                the Administration are consistent with the development 
                of a robust private sector that can provide commercial 
                loans or financing products; and
                    (E) not serve on a full-time basis, except that the 
                Board of Directors shall meet at least quarterly to 
                review, as appropriate, applications for credit support 
                and set policies and procedures as necessary.
            (3) Removal.--An appointed member of the Board of Directors 
        may be removed from office by the President for good cause.
            (4) Vacancies.--An appointed seat on the Board of Directors 
        that becomes vacant shall be filled by appointment by the 
        President, but only for the unexpired portion of the term of 
        the vacating member.
            (5) Compensation of members.--An appointed member of the 
        Board of Directors shall be compensated at the prevailing rate 
        for compensation for similar positions in industry.
    (d) Energy Technology Advisory Council.--
            (1) In general.--The Administration shall have an Energy 
        Technology Advisory Council consisting of 8 members selected by 
        the Board of Directors of the Administration.
            (2) Qualifications.--The members of the Advisory Council 
        shall--
                    (A) have clean energy project development, clean 
                energy finance, commercial, and/or relevant scientific 
                expertise; and
                    (B) include representatives of--
                            (i) the academic community;
                            (ii) the private research community;
                            (iii) National Laboratories;
                            (iv) the technology or project development 
                        community; and
                            (v) the commercial energy financing and 
                        operations sector.
            (3) Duties.--The Advisory Council shall--
                    (A) develop and publish for comment in the Federal 
                Register a methodology for assessment of clean energy 
                technologies that will allow the Administration to 
                evaluate projects based on the progress likely to be 
                achieved per-dollar invested in maximizing the 
                attributes of the definition of clean energy 
                technology, taking into account the extent to which 
                support for a clean energy technology is likely to 
                accrue subsequent benefits that are attributable to a 
                commercial scale deployment taking place earlier than 
                that which otherwise would have occurred without the 
                support; and
                    (B) advise on the technological approaches that 
                should be supported by the Administration to meet the 
                technology deployment goals established by the 
                Secretary pursuant to section 185.
            (4) Term.--
                    (A) In general.--Members of the Advisory Council 
                shall have 5-year staggered terms, as determined by the 
                Administrator of the Administration.
                    (B) Reappointment.--A member of the Advisory 
                Council may be reappointed.
            (5) Compensation.--A member of the Advisory Council, who is 
        not otherwise compensated as a Federal employee, 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 Council.
    (e) Staff.--
            (1) In general.--The Administrator of the Administration, 
        in consultation with the Board of Directors, may--
                    (A) appoint and terminate such officers, attorneys, 
                employees, and agents as are necessary to carry out 
                this subtitle; and
                    (B) vest those personnel with such powers and 
                duties as the Administrator of the Administration may 
                determine.
    (f) Conflicts of Interest.--No director, officer, attorney, agent, 
or employee of the Administration shall in any manner, directly or 
indirectly, participate in the deliberation upon, or the determination 
of, any question affecting such individual's personal interests, or the 
interests of any corporation, partnership, or association in which such 
individual is directly or indirectly personally interested.
    (g) Sunset.--
            (1) Expiration of charter.--The Administration shall 
        continue to exercise its functions until all obligations and 
        commitments of the Administration are discharged, even after 
        its charter has expired.
            (2) Prior obligations.--No provisions of this subsection 
        shall be construed as preventing the Administration from--
                    (A) undertaking obligations prior to the date of 
                the expiration of its charter which mature subsequent 
                to such date;
                    (B) assuming, prior to the date of the expiration 
                of its charter, liability as guarantor, endorser, or 
                acceptor of obligations which mature subsequent to such 
                date; or
                    (C) continuing as a corporation and exercising any 
                of its functions subsequent to the date of the 
                expiration of its charter for purposes of orderly 
                liquidation, including the administration of its assets 
                and the collection of any obligations held by the 
                Administration.

SEC. 187. DIRECT SUPPORT.

    (a) In General.--The Administration may issue direct loans, letters 
of credit, and loan guarantees to deploy clean energy technologies if 
the Administrator of the Administration has determined that deployment 
of the technologies would benefit or be accelerated by the support.
    (b) Eligibility Criteria.--In carrying out this section and 
awarding credit support to projects, the Administrator of the 
Administration shall account for--
            (1) how the technology rates based on an evaluation 
        methodology established by the Advisory Council;
            (2) how the project fits with the goals established under 
        section 185; and
            (3) the potential for the applicant to successfully 
        complete the project.
    (c) Risk.--
            (1) Expected loan loss reserve.--The Administrator of the 
        Administration shall establish an expected loan loss reserve to 
        account for estimated losses attributable to activities under 
        this section that is consistent with the purposes of--
                    (A) developing breakthrough technologies to the 
                point at which technology risk is largely mitigated;
                    (B) achieving widespread deployment and advancing 
                the commercial viability of clean energy technologies; 
                and
                    (C) advancing the goals established under section 
                185.
            (2) Initial expected loan loss reserve.--Until such time as 
        the Administrator of the Administration determines sufficient 
        data exist to establish an expected loan loss reserve that is 
        appropriate, the Administrator of the Administration shall 
        consider establishing an initial rate of 10 percent for the 
        portfolio of investments under this subtitle.
            (3) Portfolio investment approach.--The Administration 
        shall--
                    (A) use a portfolio investment approach to mitigate 
                risk and diversify investments across technologies and 
                ensure that no particular technology is provided more 
                than 30 percent of the financial support available;
                    (B) to the maximum extent practicable and 
                consistent with long-term self-sufficiency, weigh the 
                portfolio of investments in projects to advance the 
                goals established under section 185;
                    (C) consistent with the expected loan loss reserve 
                established under this subsection, the purpose stated 
                in section 182, and section 186(b)(2)(B), provide the 
                maximum practicable percentage of support to promote 
                breakthrough technologies; and
                    (D) give the highest priority to investments that 
                promote technologies that will achieve the maximum 
                greenhouse gas emission reductions within a reasonable 
                period of time per dollar invested and the earliest 
                reductions in greenhouse gas emissions.
            (4) Loss rate review.--
                    (A) In general.--The Board of Directors shall 
                review on an annual basis the loss rates of the 
                portfolio to determine the adequacy of the reserves.
                    (B) Report.--Not later than 90 days after the date 
                of the initiation of the review, the Administrator of 
                the Administration shall submit to the Committee on 
                Energy and Natural Resources and the Committee on 
                Finance of the Senate, and the Committee on Energy and 
                Commerce and the Committee on Ways and Means of the 
                House of Representatives a report describing the 
                results of the review and any recommended policy 
                changes.
            (5) Federal cost share.--Direct loans, letters of credit 
        and loan guarantees by the Administration shall not exceed an 
        amount equal to 80 percent of the project cost of the facility 
        that is the subject of the loan, letter of credit or loan 
        guarantee, as estimated at the time at which the loan, letter 
        of credit or loan guarantee is issued.
    (d) Application Review.--
            (1) In general.--To the maximum extent practicable and 
        consistent with sound business practices, the Administration 
        shall seek to consolidate reviews of applications for credit 
        support under this subtitle such that final decisions on 
        applications can generally be issued not later than 180 days 
        after the date of submission of a completed application.
            (2) Environmental review.--In carrying out this subtitle, 
        the Administration shall, to the maximum extent practicable--
                    (A) avoid duplicating efforts that have already 
                been undertaken by other agencies (including State 
                agencies acting under Federal programs); and
                    (B) with the advice of the Council on Environmental 
                Quality and any other applicable agencies, use the 
                administrative records of similar reviews conducted 
                throughout the executive branch to develop the most 
                expeditious review process practicable.
    (e) Wage Rate Requirements.--
            (1) In general.--No credit support shall be issued under 
        this section unless the borrower has provided to the 
        Administrator of the Administration reasonable assurances that 
        all laborers and mechanics employed by contractors and 
        subcontractors in the performance of construction work financed 
        in whole or in part by the Administration will be paid wages at 
        rates not less than those prevailing on projects of a character 
        similar to the contract work in the civil subdivision of the 
        State in which the contract work is to be performed as 
        determined by the Secretary of Labor in accordance with 
        subchapter IV of chapter 31 of part A of subtitle II of title 
        40, United States Code.
            (2) Labor standards.--With respect to the labor standards 
        specified in this subsection, the Secretary of Labor shall have 
        the authority and functions set forth in Reorganization Plan 
        Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 
        3145 of title 40, United States Code.
    (f) Limitations.--(1) The Administration shall not provide direct 
support as defined under this section or indirect support as defined 
under section 188 to an individual clean energy technology project that 
obtained a loan guarantee under title XVII of the Energy Policy Act of 
2005.
    (2) No direct or indirect support provided by the Administration 
may be used to pay any part of the cost of an obligation or a loan 
guarantee under Title XVII of the Energy Policy Act of 2005.

SEC. 188. INDIRECT SUPPORT.

    (a) In General.--For the purpose of enhancing the availability of 
private financing for clean energy technology deployment, the 
Administration may--
            (1) provide credit support to portfolios of taxable debt 
        obligations originated by state, local, and private sector 
        entities that enable owners and users of buildings and 
        industrial facilities to--
                    (A) significantly increase the energy efficiency of 
                such buildings or facilities; or
                    (B) install systems that individually generate 
                electricity from renewable energy resources and have a 
                capacity of no more than 2 megawatts;
            (2) facilitate financing transactions in tax equity markets 
        and long-term purchasing of clean energy by state, local, and 
        non-governmental not-for-profit entities, to the degree and 
        extent that the Administration determines such financing 
        activity is appropriate and consistent with carrying out the 
        purposes described in Section 182 of this Act; and
            (3) provide credit support to portfolios of taxable debt 
        obligations originated by state, local, and private sector 
        entities that enable the deployment of energy storage 
        applications for electric drive vehicles, stationary 
        applications, and electricity transmission and distribution.
    (b) Definitions.--For purposes of the section:
            (1) Credit support.--The term ``credit support'' means--
                    (A) direct loans, letters of credit, loan 
                guarantees, and insurance products; and
                    (B) the purchase or commitment to purchase, or the 
                sale or commitment to sell, debt instruments (including 
                subordinated securities).
            (2) Renewable energy resource.--The term ``renewable energy 
        resource'' shall have the meaning given that term in section 
        610 of the Public Utility Regulatory Policies Act of 1978 (as 
        added by section 101 of this Act).
    (c) Transparency.--The Administration shall seek to foster through 
its credit support activities--
            (1) the development and consistent application of standard 
        contractual terms, transparent underwriting standards and 
        consistent measurement and verification protocols, as 
        applicable; and
            (2) the creation of performance data that promotes 
        effective underwriting and risk management to support lending 
        markets and stimulate the development of private investment 
        markets.
    (d) Exempt Securities.--All securities insured or guaranteed by the 
Administration shall, to the same extent as securities that are direct 
obligations of or obligations guaranteed as to the principal or 
interest by the United States, be considered to be exempt securities 
within the meaning of the laws administered by the Securities and 
Exchange Commission.

SEC. 189. FEDERAL CREDIT AUTHORITY.

    (a) Payments of Liabilities.--
            (1) In general.--Any payment made to discharge liabilities 
        arising from agreements under this subtitle shall be paid 
        exclusively out of the Fund or the associated credit account, 
        as appropriate.
            (2) Security.--Subject to paragraph (1), the full faith and 
        credit of the United States is pledged to the payment of all 
        obligations entered into by the Administration pursuant to this 
        subtitle.
    (b) Fees.--
            (1) In general.--Consistent with achieving the purpose 
        stated in section 182, the Administrator of the Administration 
        shall charge fees or collect compensation generally in 
        accordance with commercial rates.
            (2) Availability of fees.--All fees collected by the 
        Administration may be retained by the Administration and placed 
        in the Fund and may remain available to the Administration, 
        without further appropriation or fiscal year limitation, for 
        use in carrying out the purpose stated in section 182.
            (3) Breakthrough technologies.--The Administration shall 
        charge the minimum amount in fees or compensation practicable 
        for breakthrough technologies, consistent with the long-term 
        viability of the Administration, unless the Administration 
        first determines that a higher charge will not impede the 
        development of the technology.
            (4) Alternative fee arrangements.--The Administration may 
        use such alternative arrangements (such as profit 
        participation, contingent fees, and other valuable contingent 
        interests) as the Administration considers appropriate to 
        compensate the Administration for the expenses of the 
        Administration and the risk inherent in the support of the 
        Administration.
    (c) Cost Transfer Authority.--Amounts collected by the 
Administration for the cost of a loan or loan guarantee shall be 
transferred by the Administration to the respective credit accounts.

SEC. 190. GENERAL PROVISIONS.

    (a) Immunity From Impairment, Limitation, or Restriction.--
            (1) In general.--All rights and remedies of the 
        Administration (including any rights and remedies of the 
        Administration on, under, or with respect to any mortgage or 
        any obligation secured by a mortgage) shall be immune from 
        impairment, limitation, or restriction by or under--
                    (A) any law (other than a law enacted by Congress 
                expressly in limitation of this paragraph) that becomes 
                effective after the acquisition by the Administration 
                of the subject or property on, under, or with respect 
                to which the right or remedy arises or exists or would 
                so arise or exist in the absence of the law; or
                    (B) any administrative or other action that becomes 
                effective after the acquisition.
            (2) State law.--The Administrator of the Administration may 
        conduct the business of the Administration without regard to 
        any qualification or law of any State relating to 
        incorporation.
    (b) Use of Other Agencies.--With the consent of a department, 
establishment, or instrumentality (including any field office), the 
Administration may--
            (1) use and act through any department, establishment, or 
        instrumentality; and
            (2) use, and pay compensation for, information, services, 
        facilities, and personnel of the department, establishment, or 
        instrumentality.
    (c) Financial Matters.--
            (1) Investments.--Funds of the Administration may be 
        invested in such investments as the Board of Directors may 
        prescribe. Earnings from such funds, other than fees collected 
        under section 189, may be spent by the Administration only to 
        such extent or in such amounts as are provided in advance by 
        appropriation Acts.
            (2) Fiscal agents.--Any Federal Reserve bank or any bank as 
        to which at the time of the designation of the bank by the 
        Administrator of the Administration there is outstanding a 
        designation by the Secretary of the Treasury as a general or 
        other depository of public money, may be designated by the 
        Administrator of the Administration as a depositary or 
        custodian or as a fiscal or other agent of the Administration.
    (d) Periodic Reports.--Not later than 1 year after commencement of 
operation of the Administration and at least biannually thereafter, the 
Administrator of the Administration shall submit to the Committee on 
Energy and Natural Resources and the Committee on Finance of the Senate 
and the Committee on Energy and Commerce and the Committee on Ways and 
Means of the House of Representatives a report that includes a 
description of--
            (1) the technologies supported by activities of the 
        Administration and how the activities advance the purpose 
        stated in section 182; and
            (2) the performance of the Administration on meeting the 
        goals established under section 185.
    (g) Audits by the Comptroller General.--
            (1) In general.--The programs, activities, receipts, 
        expenditures, and financial transactions of the Administration 
        shall be subject to audit by the Comptroller General of the 
        United States under such rules and regulations as may be 
        prescribed by the Comptroller General.
            (2) Access.--The representatives of the Government 
        Accountability Office shall--
                    (A) have access to the personnel and to all books, 
                accounts, documents, records (including electronic 
                records), reports, files, and all other papers, 
                automated data, things, or property belonging to, under 
                the control of, or in use by the Administration, or any 
                agent, representative, attorney, advisor, or consultant 
                retained by the Administration, and necessary to 
                facilitate the audit;
                    (B) be afforded full facilities for verifying 
                transactions with the balances or securities held by 
                depositories, fiscal agents, and custodians;
                    (C) be authorized to obtain and duplicate any such 
                books, accounts, documents, records, working papers, 
                automated data and files, or other information relevant 
                to the audit without cost to the Comptroller General; 
                and
                    (D) have the right of access of the Comptroller 
                General to such information pursuant to section 716(c) 
                of title 31, United States Code.
            (3) Assistance and cost.--
                    (A) In general.--For the purpose of conducting an 
                audit under this subsection, the Comptroller General 
                may, in the discretion of the Comptroller General, 
                employ by contract, without regard to section 3709 of 
                the Revised Statutes (41 U.S.C. 5), professional 
                services of firms and organizations of certified public 
                accountants for temporary periods or for special 
                purposes.
                    (B) Reimbursement.--
                            (i) In general.--On the request of the 
                        Comptroller General, the Administration shall 
                        reimburse the Government Accountability Office 
                        for the full cost of any audit conducted by the 
                        Comptroller General under this subsection.
                            (ii) Crediting.--Such reimbursements 
                        shall--
                                    (I) be credited to the 
                                appropriation account entitled 
                                ``Salaries and Expenses, Government 
                                Accountability Office'' at the time at 
                                which the payment is received; and
                                    (II) remain available until 
                                expended.
    (h) Annual Independent Audits.--
            (1) In general.--The Administrator of the Administration 
        shall--
                    (A) have an annual independent audit made of the 
                financial statements of the Administration by an 
                independent public accountant in accordance with 
                generally accepted auditing standards; and
                    (B) submit to the Secretary and to the Committee on 
                Energy and Natural Resources and the Committee on 
                Finance of the Senate and the Committee on Energy and 
                Commerce and the Committee on Ways and Means of the 
                House the results of the audit.
            (2) Content.--In conducting an audit under this subsection, 
        the independent public accountant shall determine and report on 
        whether the financial statements of the Administration--
                    (A) are presented fairly in accordance with 
                generally accepted accounting principles; and
                    (B) comply with any disclosure requirements imposed 
                under this subtitle.
    (i) Financial Reports.--
            (1) In general.--The Administrator of the Administration 
        shall submit to the Secretary and to the Committee on Energy 
        and Natural Resources and the Committee on Finance of the 
        Senate and the Committee on Energy and Commerce and the 
        Committee on Ways and Means of the House annual and quarterly 
        reports of the financial condition and operations of the 
        Administration, which shall be in such form, contain such 
        information, and be submitted on such dates as the Secretary 
        shall require.
            (2) Contents of annual reports.--Each annual report shall 
        include--
                    (A) financial statements prepared in accordance 
                with generally accepted accounting principles;
                    (B) any supplemental information or alternative 
                presentation that the Secretary may require; and
                    (C) an assessment (as of the end of the most recent 
                fiscal year of the Administration), signed by the chief 
                executive officer and chief accounting or financial 
                officer of the Administration, of--
                            (i) the effectiveness of the internal 
                        control structure and procedures of the 
                        Administration; and
                            (ii) the compliance of the Administration 
                        with applicable safety and soundness laws.
            (3) Special reports.--The Secretary may require the 
        Administrator of the Administration to submit other reports on 
        the condition (including financial condition), management, 
        activities, or operations of the Administration, as the 
        Secretary considers appropriate.
            (4) Accuracy.--Each report of financial condition shall 
        contain a declaration by the Administrator of the 
        Administration or any other officer designated by the Board of 
        Directors of the Administration to make the declaration, that 
        the report is true and correct to the best of the knowledge and 
        belief of the officer.
            (5) Availability of reports.--Reports required under this 
        section shall be published and made publicly available as soon 
        as is practicable after receipt by the Secretary.
    (j) Spending Safeguards and Reporting.--
            (1) In general.--The Administrator--
                    (A) shall require any entity receiving financing 
                support from the Administration to report quarterly, in 
                a format specified by the Administrator, on such 
                entity's use of such support and its progress 
                fulfilling the objectives for which such support was 
                granted, and the Administrator shall make these reports 
                available to the public;
                    (B) may establish additional reporting and 
                information requirements for any recipient of financing 
                support from the Administration;
                    (C) shall establish appropriate mechanisms to 
                ensure appropriate use and compliance with all terms of 
                any financing support from the Administration;
                    (D) shall create and maintain a fully searchable 
                database, accessible on the Internet (or successor 
                protocol) at no cost to the public, that contains at 
                least--
                            (i) a list of each entity that has applied 
                        for financing support;
                            (ii) a description of each application;
                            (iii) the status of each such application;
                            (iv) the name of each entity receiving 
                        financing support;
                            (v) the purpose for which such entity is 
                        receiving such financing support;
                            (vi) each quarterly report submitted by the 
                        entity pursuant to this section; and
                            (vii) such other information sufficient to 
                        allow the public to understand and monitor the 
                        financial support provided by the 
                        Administration;
                    (E) shall make all financing transactions available 
                for public inspection, including formal annual reviews 
                by both a private auditor and the Comptroller General; 
                and
                    (F) shall at all times be available to receive 
                public comment in writing on the activities of the 
                Administration.
            (2) Protection of confidential business information.--To 
        the extent necessary and appropriate, the Administrator may 
        redact any information regarding applicants and borrowers to 
        protect confidential business information.

SEC. 191. CONFORMING AMENDMENTS.

    (a) Tax Exempt Status.--Subsection (l) of section 501 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following:
            ``(4) The Clean Energy Deployment Administration 
        established under section 9801 of title 31, United States 
        Code.''.
    (b) Wholly Owned Government Corporation.--Paragraph (3) of section 
9101 of title 31, United States Code, is amended by adding at the end 
the following:
                    ``(S) the Clean Energy Deployment 
                Administration.''.

                       Subtitle J--Miscellaneous

SEC. 195. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL 
              FACILITIES.

    (a) In General.--The Secretary of the Interior, the Secretary of 
Energy, and the Secretary of the Army shall jointly update the study of 
the potential for increasing electric power production capability at 
federally owned or operated water regulation, storage, and conveyance 
facilities required in section 1834 of the Energy Policy Act of 2005.
    (b) Content.--The update under this section shall include 
identification and description in detail of each facility that is 
capable, with or without modification, of producing additional 
hydroelectric power, including estimation of the existing potential for 
the facility to generate hydroelectric power.
    (c) Report.--The Secretaries shall submit to the Committees on 
Energy and Commerce, Natural Resources, and Transportation and 
Infrastructure of the House of Representatives and the Committee on 
Energy and Natural Resources of the Senate a report on the findings, 
conclusions, and recommendations of the update of the study under this 
section by not later than 12 months after the date of enactment of this 
Act. The report shall include each of the following:
            (1) The identifications, descriptions, and estimations 
        referred to in subsection (b).
            (2) A description of activities currently conducted or 
        considered, or that could be considered, to produce additional 
        hydroelectric power from each identified facility.
            (3) A summary of prior actions taken by the Secretaries to 
        produce additional hydroelectric power from each identified 
        facility.
            (4) The costs to install, upgrade, or modify equipment or 
        take other actions to produce additional hydroelectric power 
        from each identified facility, and the level of Federal power 
        customer involvement in the determination of such costs.
            (5) The benefits that would be achieved by such 
        installation, upgrade, modification, or other action, including 
        quantified estimates of any additional energy or capacity from 
        each facility identified under subsection (b).
            (6) A description of actions that are planned, underway, or 
        might reasonably be considered to increase hydroelectric power 
        production by replacing turbine runners, by performing 
        generator upgrades or rewinds, or by construction of pumped 
        storage facilities.
            (7) The impact of increased hydroelectric power production 
        on irrigation, water supply, fish, wildlife, Indian tribes, 
        river health, water quality, navigation, recreation, fishing, 
        and flood control.
            (8) Any additional recommendations to increase 
        hydroelectric power production from, and reduce costs and 
        improve efficiency at, federally owned or operated water 
        regulation, storage, and conveyance facilities.

SEC. 196. CLEAN TECHNOLOGY BUSINESS COMPETITION GRANT PROGRAM.

    (a) In General.--The Secretary of Energy is authorized to provide 
grants to organizations to conduct business competitions that provide 
incentives, training, and mentorship to entrepreneurs and early stage 
start-up companies throughout the United States to meet high priority 
economic, environmental, and energy security goals in areas to include 
energy efficiency, renewable energy, air quality, water quality and 
conservation, transportation, smart grid, green building, and waste 
management. Such competitions shall have the purpose of accelerating 
the development and deployment of clean technology businesses and green 
jobs; stimulating green economic development; providing business 
training and mentoring to early stage clean technology companies; and 
strengthening the competitiveness of United States clean technology 
industry in world trade markets. Priority shall be given to business 
competitions that are private sector led, encourage regional and 
interregional cooperation, and can demonstrate market-driven practices 
and show the creation of cost-effective green jobs through an annual 
publication of competition activities and directory of companies.
    (b) Eligibility.--An organization eligible for a grant under 
subsection (a) is--
            (1) any organization described in section 501(c)(3) of the 
        Internal Revenue Code of 1986 and exempt from tax under section 
        501(a) of such Code; and
            (2) any sponsored entity of an organization described in 
        paragraph (1) that is operated as a nonprofit entity.
    (c) Priority.--In making grants under this section, the Secretary 
shall give priority to those organizations that can demonstrate broad 
funding support from private and other non-Federal funding sources to 
leverage Federal investment.
    (d) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated $20,000,000.

SEC. 197. NATIONAL BIOENERGY PARTNERSHIP.

    (a) In General.--The Secretary of Energy shall establish a National 
Bioenergy Partnership to provide coordination among programs of State 
governments, the Federal Government, and the private sector that 
support the institutional and physical infrastructure necessary to 
promote the deployment of sustainable biomass fuels and bioenergy 
technologies for the United States.
    (b) Program.--The National Bioenergy Partnership shall consist of 
five regions, to be administered by the CONEG Policy Research Center, 
the Council of Great Lakes Governors, the Southern States Energy Board, 
the Western Governors Association, and the Pacific Regional Biomass 
Energy Partnership led by the Washington State University Energy 
Program.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated for each of fiscal years 2010 through 2014 to carry out 
this section--
            (1) $5,000,000, to be allocated among the 5 regions 
        described in subsection (b) on the basis of the number of 
        States in each region, for distribution among the member States 
        of that region based on procedures developed by the member 
        States of the region; and
            (2) $2,500,000, to be allocated equally among the 5 regions 
        described in subsection (b) for region-wide activities, 
        including technical assistance and regional studies and 
        coordination.

SEC. 198. OFFICE OF CONSUMER ADVOCACY.

    Section 319 of the Federal Power Act is amended to read as follows:

``SEC. 319. OFFICE OF CONSUMER ADVOCACY.

    ``(a) Office.--
            ``(1) Establishment.--There is established within the 
        Commission an Office of Consumer Advocacy to serve as an 
        advocate for the public interest. The Office of Administrative 
        Litigation within the Commission shall be incorporated into the 
        Office of Consumer Advocacy.
            ``(2) Director.--The Office shall be headed by a Director 
        to be appointed by the President by and with the advice and 
        consent of the Senate from among individuals who are licensed 
        attorneys admitted to the Bar of any State or of the District 
        of Columbia and who have experience in public utility 
        proceedings.
            ``(3) Duties.--The Office may--
                    ``(A) represent the interests of energy customers--
                            ``(i) on matters before the Commission 
                        concerning rates or service of public utilities 
                        and natural gas companies under the 
                        jurisdiction of the Commission;
                            ``(ii) as amicus curiae, in the review in 
                        the courts of the United States of rulings by 
                        the Commission in such matters; and
                            ``(iii) as amicus, in hearings and 
                        proceedings in other Federal regulatory 
                        agencies and commissions related to such 
                        matters;
                    ``(B) monitor and review energy customer complaints 
                and grievances on matters concerning rates or service 
                of public utilities and natural gas companies under the 
                jurisdiction of the Commission;
                    ``(C) investigate independently, or within the 
                context of formal proceedings, the services provided 
                by, the rates charged by, and the valuation of the 
                properties of, public utilities and natural gas 
                companies under the jurisdiction of the Commission;
                    ``(D) develop means, such as public dissemination 
                of information, consultative services, and technical 
                assistance, to ensure, to the maximum extent 
                practicable, that the interests of energy consumers are 
                adequately represented in the course of any hearing or 
                proceeding described in subparagraph (A);
                    ``(E) collect data concerning rates or service of 
                public utilities and natural gas companies under the 
                jurisdiction of the Commission; and
                    ``(F) prepare and issue reports and 
                recommendations.
            ``(4) Compensation and powers.--The Director shall be 
        compensated at Level IV of the Executive Schedule. The Director 
        may--
                    ``(A) employ not more than 25 full-time 
                professional employees at appropriate levels in the GS 
                Scale and such additional support personnel as 
                required; and
                    ``(B) procure temporary and intermittent services 
                as needed.
            ``(5) Information from other federal agencies.--The 
        Director may request, from any department, agency, or 
        instrumentality of the United States such information as he 
        deems necessary to carry out his functions under this section. 
        Upon such request, the head of the department, agency, or 
        instrumentality concerned shall, to the extent practicable and 
        authorized by law, provide such information to the Office.
    ``(b) Consumer Advocacy Advisory Committee.--
            ``(1) Establishment.--The Director shall establish an 
        advisory committee to be known as Consumer Advocacy Advisory 
        Committee (in this section referred to as the `Advisory 
        Committee') to review rates, services, and disputes and to make 
        recommendations to the Director.
            ``(2) Composition.--The Director shall appoint 5 members to 
        the Advisory Committee including--
                    ``(A) 2 individuals representing State utility 
                consumer advocates; and
                    ``(B) 1 individual, from a nongovernmental 
                organization representing consumers.
            ``(3) Meetings.--The Advisory Committee shall meet at such 
        frequency as may be required to carry out its duties.
            ``(4) Reports.--The Director shall provide for the 
        publication of recommendations of the Advisory Committee on the 
        public website established for the Office.
            ``(5) Duration.--Notwithstanding any other provision of 
        law, the Advisory Committee shall continue in operation during 
        the period for which the Office exists.
    ``(c) Definitions.--
            ``(1) Energy customer.--The term `energy customer' means a 
        residential customer or a small commercial customer that 
        receives products or services directly or indirectly from a 
        public utility or natural gas company under the jurisdiction of 
        the Commission.
            ``(2) Natural gas company.--The term `natural gas company' 
        has the meaning given the term in section 2 of the Natural Gas 
        Act (15 U.S.C. 717a), as modified by section 601(a) of the 
        Natural Gas Policy Act of 1978 (15 U.S.C. 3431(a)).
            ``(3) Office.--The term `Office' means the Office of 
        Consumer Advocacy established under this section.
            ``(4) Public utility.--The term `public utility' has the 
        meaning given the term in section 201(e) of this Act.
            ``(5) Small commercial customer.--The term `small 
        commercial customer' means a commercial customer that has a 
        peak demand of not more than 1,000 kilowatts per hour.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as necessary to carry out this section.
    ``(e) Savings Clause.--Nothing in this section affects the rights 
or obligations of any State utility consumer advocate.''.

                      TITLE II--ENERGY EFFICIENCY

            Subtitle A--Building Energy Efficiency Programs

SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

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

``SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

    ``(a) Energy Efficiency Targets.--
            ``(1) In general.--Except as provided in paragraph (2) or 
        (3), the national building code energy efficiency target for 
        the national average percentage improvement of a building's 
        energy performance when built to a code meeting the target 
        shall be--
                    ``(A) effective on the date of enactment of the 
                American Clean Energy and Security Act of 2009, 30 
                percent reduction in energy use relative to a 
                comparable building constructed in compliance with the 
                baseline code;
                    ``(B) effective January 1, 2014, for residential 
                buildings, and January 1, 2015, for commercial 
                buildings, 50 percent reduction in energy use relative 
                to the baseline code; and
                    ``(C) effective January 1, 2017, for residential 
                buildings, and January 1, 2018, for commercial 
                buildings, and every 3 years thereafter, respectively, 
                through January 1, 2029, and January 1, 2030, 5 percent 
                additional reduction in energy use relative to the 
                baseline code.
            ``(2) Consensus-based codes.--If on any effective date 
        specified in paragraph (1)(A), (B), or (C) a successor code to 
        the baseline codes provides for greater reduction in energy use 
        than is required under paragraph (1), the overall percentage 
        reduction in energy use provided by that successor code shall 
        be the national building code energy efficiency target.
            ``(3) Targets established by secretary.--The Secretary may 
        by rule establish a national building code energy efficiency 
        target for residential or commercial buildings achieving 
        greater reductions in energy use than the targets prescribed in 
        paragraph (1) or (2) if the Secretary determines that such 
        greater reductions in energy use can be achieved with a code 
        that is life cycle cost-justified and technically feasible. The 
        Secretary may by rule establish a national building code energy 
        efficiency target for residential or commercial buildings 
        achieving a reduction in energy use that is greater than zero 
        but less than the targets prescribed in paragraph (1) or (2) if 
        the Secretary determines that such lesser target is the maximum 
        reduction in energy use that can be achieved through a code 
        that is life cycle cost-justified and technically feasible.
            ``(4) Additional reductions in energy use.--Effective on 
        January 1, 2033, and once every 3 years thereafter, the 
        Secretary shall determine, after notice and opportunity for 
        comment, whether further energy efficiency building code 
        improvements for residential or commercial buildings, 
        respectively, are life cycle cost-justified and technically 
        feasible, and shall establish updated national building code 
        energy efficiency targets that meet such criteria.
            ``(5) Zero-net-energy buildings.--In setting targets under 
        this subsection, the Secretary shall consider ways to support 
        the deployment of distributed renewable energy technology, and 
        shall seek to achieve the goal of zero-net-energy commercial 
        buildings established in section 422 of the Energy Independence 
        and Security Act of 2007 (42 U.S.C. 17082).
            ``(6) Baseline code.--For purposes of this section, the 
        term `baseline code' means--
                    ``(A) for residential buildings, the 2006 
                International Energy Conservation Code (IECC) published 
                by the International Code Council (ICC); and
                    ``(B) for commercial buildings, the code published 
                in ASHRAE Standard 90.1-2004.
            ``(7) Consultation.--In establishing the targets required 
        by this section, the Secretary shall consult with the Director 
        of the National Institute of Standards and Technology.
    ``(b) National Energy Efficiency Building Codes.--
            ``(1) Requirement.--
                    ``(A) In general.--There shall be established 
                national energy efficiency building codes under this 
                subsection, for residential and commercial buildings, 
                sufficient to meet each of the national building code 
                energy efficiency targets established under subsection 
                (a), not later than the date that is one year after the 
                deadline for establishment of each such target, except 
                that the national energy efficiency building code 
                established to meet the target described in subsection 
                (a)(1)(A) shall be established by not later than 15 
                months after the effective date of that target.
                    ``(B) Existing code.--If the Secretary finds prior 
                to the date provided in subparagraph (A) for 
                establishing a national code for any target that one or 
                more energy efficiency building codes published by a 
                recognized developer of national energy codes and 
                standards meet or exceed the established target, the 
                Secretary shall select the code that meets the target 
                with the highest efficiency in the most cost-effective 
                manner, and such code shall be the national energy 
                efficiency building code.
                    ``(C) Requirement to establish code.--If the 
                Secretary does not make a finding under subparagraph 
                (B), the national energy efficiency building code shall 
                be established by rule by the Secretary under paragraph 
                (2).
            ``(2) Establishment by secretary.--
                    ``(A) Procedure.--In order to establish a national 
                energy efficiency building code as required under 
                paragraph (1)(C), the Secretary shall--
                            ``(i) not later than six months prior to 
                        the effective date for each target, review 
                        existing and proposed codes published or under 
                        review by recognized developers of national 
                        energy codes and standards;
                            ``(ii) determine the percentage of energy 
                        efficiency improvements that are or would be 
                        achieved in such published or proposed code 
                        versions relative to the target;
                            ``(iii) propose improvements to such 
                        published or proposed code versions sufficient 
                        to meet or exceed the target; and
                            ``(iv) unless a finding is made under 
                        paragraph (1)(B) with respect to a code 
                        published by a recognized developer of national 
                        energy codes and standards, adopt a code that 
                        meets or exceeds the relevant national building 
                        code energy efficiency target by not later than 
                        one year after the effective date of each such 
                        target, and by not later than 15 months after 
                        the target is established under subsection 
                        (a)(1)(A).
                    ``(B) Calculations.--Each national energy 
                efficiency building code established by the Secretary 
                under this paragraph shall be set at the maximum level 
                the Secretary determines is life cycle cost-justified 
                and technically feasible, in accordance with the 
                following:
                            ``(i) Savings calculations.--Calculations 
                        of energy savings shall take into account the 
                        typical lifetimes of different products, 
                        measures, and system configurations.
                            ``(ii) Cost-effectiveness calculations.--
                        Calculations of life cycle cost-effectiveness 
                        shall be based on life cycle cost methods and 
                        procedures under section 544 of the National 
                        Energy Conservation Policy Act (42 U.S.C. 
                        8254), but shall incorporate to the extent 
                        feasible externalities such as impacts on 
                        climate change and on peak energy demand that 
                        are not already incorporated in assumed energy 
                        costs.
                    ``(C) Considerations.--In developing a national 
                energy efficiency building code under this paragraph, 
                the Secretary shall consider--
                            ``(i) for residential national energy 
                        efficiency building codes--
                                    ``(I) residential building 
                                standards published or proposed by 
                                ASHRAE;
                                    ``(II) building codes published or 
                                proposed by the International Code 
                                Council (ICC);
                                    ``(III) data from the Residential 
                                Energy Services Network (RESNET) on 
                                compliance measures utilized by 
                                consumers to qualify for the 
                                residential energy efficiency tax 
                                credits established under the Energy 
                                Policy Act of 2005;
                                    ``(IV) data and information from 
                                the Department of Energy's Building 
                                America Program;
                                    ``(V) data and information from the 
                                Energy Star New Homes program;
                                    ``(VI) data and information from 
                                the New Building Institute and similar 
                                organizations; and
                                    ``(VII) standards for practices and 
                                materials to achieve cool roofs in 
                                residential buildings, taking into 
                                consideration reduced air conditioning 
                                energy use as a function of cool roofs, 
                                the potential reduction in global 
                                warming from increased solar 
                                reflectance from buildings, and cool 
                                roofs criteria in State and local 
                                building codes and in national and 
                                local voluntary programs, without 
                                reduction of otherwise applicable 
                                ceiling insulation standards; and
                            ``(ii) for commercial national energy 
                        efficiency building codes--
                                    ``(I) commercial building standards 
                                proposed by ASHRAE;
                                    ``(II) building codes proposed by 
                                the International Code Council (ICC);
                                    ``(III) the Core Performance 
                                Criteria published by the New Buildings 
                                Institute;
                                    ``(IV) data and information 
                                developed by the Director of the 
                                Commercial High-Performance Green 
                                Building Office of the Department of 
                                Energy and any public-private 
                                partnerships established under that 
                                Office;
                                    ``(V) data and information from the 
                                Energy Star for Buildings program;
                                    ``(VI) data and information from 
                                the New Building Institute, RESNET, and 
                                similar organizations; and
                                    ``(VII) standards for practices and 
                                materials to achieve cool roofs in 
                                commercial buildings, taking into 
                                consideration reduced air conditioning 
                                energy use as a function of cool roofs, 
                                the potential reduction in global 
                                warming from increased solar 
                                reflectance from buildings, and cool 
                                roofs criteria in State and local 
                                building codes and in national and 
                                local voluntary programs, without 
                                reduction of otherwise applicable 
                                ceiling insulation standards.
                    ``(D) Consultation.--In establishing any national 
                energy efficiency building code required by this 
                section, the Secretary shall consult with the Director 
                of the National Institute of Standards and Technology.
            ``(3) Consensus standard assistance.--(A) To support the 
        development of consensus standards that may provide the basis 
        for national energy efficiency building codes, minimize 
        duplication of effort, encourage progress through consensus, 
        and facilitate the development of greater building efficiency, 
        the Secretary shall provide assistance to recognized developers 
        of national energy codes and standards to develop, and where 
        the relevant code has been adopted as the national code, 
        disseminate consensus based energy efficiency building codes as 
        provided in this paragraph.
            ``(B) Upon a finding by the Secretary that a code developed 
        by such a developer meets a target established under subsection 
        (a), the Secretary shall--
                    ``(i) send notice of the Secretary's finding to all 
                duly authorized or appointed State, tribal, and local 
                code agencies; and
                    ``(ii) provide sufficient support to such a 
                developer to make the code available on the Internet, 
                or to accomplish distribution of such code to all such 
                State, tribal, and local code agencies at no cost to 
                the State, tribal, and local code agencies.
            ``(C) The Secretary may contract with such a developer and 
        with other organizations with expertise on codes to provide 
        training for State, tribal, and local code officials and 
        building inspectors in the implementation and enforcement of 
        such code.
            ``(D) The Secretary may provide grants and other support to 
        such a developer to--
                    ``(i) develop appropriate refinements to such code; 
                and
                    ``(ii) support analysis of options for improvements 
                in the code to meet the next scheduled target.
            ``(4) Code developed by secretary.--If the Secretary 
        establishes a national energy efficiency building code under 
        paragraph (2), the Secretary shall--
                    ``(A) to the extent that such code is based on a 
                prior code developed by a recognized developer of 
                national energy codes and standards, negotiate and 
                provide appropriate compensation to such developer for 
                the use of the code materials that remain in the code 
                established by the Secretary; and
                    ``(B) disseminate the national energy efficiency 
                building codes to State, tribal, and local code 
                officials, and support training and provide guidance 
                and technical assistance to such officials as 
                appropriate.
    ``(c) State Adoption of Energy Efficiency Building Codes.--
            ``(1) Requirement.--Not later than 1 year after a national 
        energy efficiency building code for residential or commercial 
        buildings is established or revised under subsection (b), each 
        State--
                    ``(A) shall--
                            ``(i) review and update the provisions of 
                        its building code regarding energy efficiency 
                        to meet or exceed the target met in the new 
                        national energy efficiency building code, to 
                        achieve equivalent or greater energy savings;
                            ``(ii) document, where local governments 
                        establish building codes, that local 
                        governments representing not less than 80 
                        percent of the State's urban population have 
                        adopted the new national code, or have adopted 
                        local codes that meet or exceed the target met 
                        in the new national code to achieve equivalent 
                        or greater energy savings; or
                            ``(iii) adopt the new national code; and
                    ``(B) shall provide a certification to the 
                Secretary demonstrating that energy efficiency building 
                code provisions that apply pursuant to subparagraph (A) 
                in that State meet or exceed the target met by the new 
                national code, to achieve equivalent or greater energy 
                savings.
            ``(2) Confirmation.--
                    ``(A) Requirement.--Not later than 90 days after a 
                State certification is provided under paragraph (1)(B), 
                the Secretary shall determine whether the State's 
                energy efficiency building code provisions meet the 
                requirements of this subsection.
                    ``(B) Acceptance by secretary.--If the Secretary 
                determines under subparagraph (A) that the State's 
                energy efficiency building code or codes meet the 
                requirements of this subsection, the Secretary shall 
                accept the certification.
                    ``(C) Deficiency notice.--If the Secretary 
                determines under subparagraph (A) that the State's 
                building code or codes do not meet the requirements of 
                this subsection, the Secretary shall identify the 
                deficiency in meeting the national building code energy 
                efficiency target, and, to the extent possible, 
                indicate areas where further improvement in the State's 
                code provisions would allow the deficiency to be 
                eliminated.
                    ``(D) Revision of code and recertification.--A 
                State may revise its code or codes and submit a 
                recertification under paragraph (1)(B) to the Secretary 
                at any time.
            ``(3) Compliant code.--For the purposes of meeting the 
        target described in subsection (a)(1)(A) for residential 
        buildings, a State that adopts the code represented in 
        California's Title 24-2009 by the date 27 months after the date 
        of enactment of the American Clean Energy and Security Act of 
        2009 shall be considered to have met the requirements of this 
        subsection for the applicable period.
    ``(d) Application of National Code to State and Local 
Jurisdictions.--
            ``(1) In general.--Upon the expiration of 18 months after a 
        national energy efficiency building code is established under 
        subsection (b), in any jurisdiction where the State has not had 
        a certification relating to that code accepted by the Secretary 
        under subsection (c)(2)(B), and the local government has not 
        had a certification relating to that code accepted by the 
        Secretary under subsection (e)(5), the national energy 
        efficiency building code shall become the applicable energy 
        efficiency building code for such jurisdiction.
            ``(2) Conflicts.--In the event of a conflict between a 
        provision of the national energy efficiency building code and a 
        provision of other applicable energy codes, the national energy 
        efficiency building code shall apply. If there is a conflict 
        between a provision of the national energy efficiency building 
        code and a provision of any applicable fire code, life safety 
        code, egress code, or accessibility code, the Secretary shall 
        take appropriate actions to resolve such conflict in a manner 
        that does not compromise the objectives of such codes.
            ``(3) State legislative adoption.--In a State in which the 
        relevant building energy code is adopted legislatively, the 
        deadline in paragraph (1) shall not be earlier than 1 year 
        after the first day that the legislature meets following 
        establishment of a national energy efficiency building code.
            ``(4) Notice of intent to enforce.--A State or locality 
        that enforces building codes may assume responsibility for 
        enforcing the national energy efficiency building code by 
        notifying the Secretary to that effect not later than three 
        months after the date established under paragraph (1).
            ``(5) Violations.--Violations of this section shall be 
        defined as follows:
                    ``(A) If the building is subject to the 
                requirements of a State energy efficiency building code 
                with respect to which a certification has been accepted 
                by the Secretary under subsection (c)(2)(B) or a local 
                energy efficiency building code with respect to which a 
                certification has been accepted by the Secretary 
                pursuant to subsection (e)(5), or the requirements of 
                the national energy efficiency building code in a State 
                where the State or locality has notified the Secretary 
                of its intent to enforce the provisions of the national 
                energy efficiency building code, a violation shall be 
                determined pursuant to the relevant provisions of State 
                or local law.
                    ``(B) If the building is subject to the 
                requirements of a national energy efficiency building 
                code made applicable under paragraph (1) of this 
                subsection, except as provided in subparagraph (A), a 
                violation shall be defined by the Secretary pursuant to 
                subsection (g).
    ``(e) State Enforcement of Energy Efficiency Building Codes.--
            ``(1) In general.--Each State, or where applicable under 
        State law each local government, shall implement and enforce 
        applicable State or local codes with respect to which a 
        certification was accepted by the Secretary under subsection 
        (c)(2)(B) or paragraph (5) of this subsection, or the national 
        energy efficiency building codes, as provided in this 
        subsection.
            ``(2) State certification.--Not later than 2 years after 
        the date of a certification under subsection (c)(1) or the 
        application of a national energy efficiency building code under 
        subsection (d)(1), each State shall certify that it has--
                    ``(A) achieved compliance with--
                            ``(i) State codes, or, as provided under 
                        State law, local codes, with respect to which a 
                        certification was accepted by the Secretary 
                        under subsection (c)(2)(B); or
                            ``(ii) the national energy efficiency 
                        building code, as applicable; or
                    ``(B) for any certification submitted within 7 
                years after the date of enactment of the American Clean 
                Energy and Security Act of 2009, made significant 
                progress toward achieving such compliance.
            ``(3) Achieving compliance.--A State shall be considered to 
        achieve compliance with a code described in paragraph (2)(A) if 
        at least 90 percent of new and substantially renovated building 
        space in that State in the preceding year upon inspection meets 
        the requirements of the code. A certification under paragraph 
        (2) shall include documentation of the rate of compliance based 
        on--
                    ``(A) independent inspections of a random sample of 
                the new and substantially renovated buildings covered 
                by the code in the preceding year; or
                    ``(B) an alternative method that yields an accurate 
                measure of compliance as determined by the Secretary.
            ``(4) Significant progress.--A State shall be considered to 
        have made significant progress toward achieving compliance with 
        a code described in paragraph (2)(A) if--
                    ``(A) the State has developed a plan, including for 
                hiring enforcement staff, providing training, providing 
                manuals and checklists, and instituting enforcement 
                programs, designed to achieve full compliance within 5 
                years after the date of the adoption of the code;
                    ``(B) the State is taking significant, timely, and 
                measurable action to implement that plan;
                    ``(C) the State has not reduced its expenditures 
                for code enforcement; and
                    ``(D) at least 50 percent of new and substantially 
                renovated building space in the State in the preceding 
                year upon inspection meets the requirements of the 
                code.
            ``(5) Secretary's determination.--Not later than 90 days 
        after a State certification under paragraph (2), the Secretary 
        shall determine whether the State has demonstrated that it has 
        complied with the requirements of this subsection, including 
        accurate measurement of compliance, or that it has made 
        significant progress toward compliance. If such determination 
        is positive, the Secretary shall accept the certification. If 
        the determination is negative, the Secretary shall identify the 
        areas of deficiency.
            ``(6) Out of compliance.--
                    ``(A) In general.--Any State for which the 
                Secretary has not accepted a certification under 
                paragraph (5) by the dates specified in paragraph (2) 
                is out of compliance with this section.
                    ``(B) Local compliance.--In any State that is out 
                of compliance with this section as provided in 
                subparagraph (A), a local government may be in 
                compliance with this section by meeting all 
                certification requirements of this subsection.
                    ``(C) Noncompliance.--Any State that is not in 
                compliance with this section, as provided in 
                subparagraph (A), shall, until the State regains such 
                compliance, be ineligible to receive--
                            ``(i) emission allowances pursuant to 
                        subsection (h)(1);
                            ``(ii) Federal funding in excess of that 
                        State's share (calculated according to the 
                        allocation formula in section 363 of the Energy 
                        Policy and Conservation Act (42 U.S.C. 6323)) 
                        of $125,000,000 each year; and
                            ``(iii) for--
                                    ``(I) the first year for which the 
                                State is out of compliance, 25 percent 
                                of any additional funding or other 
                                items of monetary value otherwise 
                                provided under the American Clean 
                                Energy and Security Act of 2009;
                                    ``(II) the second year for which 
                                the State is out of compliance, 50 
                                percent of any additional funding or 
                                other items of monetary value otherwise 
                                provided under the American Clean 
                                Energy and Security Act of 2009;
                                    ``(III) the third year for which 
                                the State is out of compliance, 75 
                                percent of any additional funding or 
                                other items of monetary value otherwise 
                                provided under the American Clean 
                                Energy and Security Act of 2009; and
                                    ``(IV) the fourth and subsequent 
                                years for which the State is out of 
                                compliance, 100 percent of any 
                                additional funding or other items of 
                                monetary value otherwise provided under 
                                the American Clean Energy and Security 
                                Act of 2009.
    ``(f) Federal Enforcement and Training.--Where a State fails and 
local governments in that State also fail to enforce the applicable 
State or national energy efficiency building codes, the Secretary shall 
enforce such codes, as follows:
            ``(1) The Secretary shall establish, by rule, within 2 
        years after the date of enactment of the American Clean Energy 
        and Security Act of 2009, an energy efficiency building code 
        enforcement capability.
            ``(2) Such enforcement capability shall be designed to 
        achieve 90 percent compliance with such code in any State 
        within 1 year after the date of the Secretary's determination 
        that such State is out of compliance with this section.
            ``(3) The Secretary may set and collect reasonable 
        inspection fees to cover the costs of inspections required for 
        such enforcement. Revenue from fees collected shall be 
        available to the Secretary to carry out the requirements of 
        this section upon appropriation.
            ``(4) In any jurisdiction to which this subsection applies, 
        the Secretary shall coordinate enforcement of the national 
        energy efficiency building code with State and local code 
        enforcement of other building codes.
            ``(5) In any jurisdiction to which this subsection applies, 
        the Secretary shall enhance compliance by conducting training 
        and education of builders and other professionals in the 
        jurisdiction concerning the national energy efficiency building 
        code.
            ``(6) The Secretary shall coordinate with professional 
        organizations representing code officials, architects, 
        engineers, builders, and other experts to develop training 
        curricula concerning the national energy efficiency building 
        code.
            ``(7) If the Secretary enforces such codes under this 
        subsection, the Secretary may, as appropriate, redefine 
        violations of such codes.
    ``(g) Enforcement Procedures.--The Secretary shall propose and, not 
later than three years after the date of enactment of the American 
Clean Energy and Security Act of 2009, shall define by rule violations 
of the energy efficiency building codes to be enforced by the Secretary 
pursuant to this section, and the penalties that shall apply to 
violators, in any jurisdiction in which the national energy efficiency 
building code has been made applicable under subsection (d)(1). To the 
extent that the Secretary determines that the authority to adopt and 
impose such violations and penalties by rule requires further statutory 
authority, the Secretary shall report such determination to Congress as 
soon as such determination is made, but not later than one year after 
the enactment of the American Clean Energy and Security Act of 2009.
    ``(h) Federal Support.--
            ``(1) Allowance allocation for state compliance.--For each 
        vintage year from 2012 through 2050, the Administrator shall 
        distribute allowances allocated pursuant to section 782(g)(2) 
        of the Clean Air Act to the SEED Account for each State. Such 
        allowances shall be distributed according to a formula 
        established by the Secretary as follows:
                    ``(A) One-fifth in an equal amount to each of the 
                50 States and United States territories.
                    ``(B) Two-fifths as a function of the relative 
                energy use in all buildings in each State in the most 
                recent year for which data is available.
                    ``(C) Two-fifths based on the number of building 
                construction starts recorded in each State, the number 
                of new building permits applied for in each State, or 
                other relevant available data indicating building 
                activity in each State, in the judgment of the 
                Secretary, for the year prior to the year of the 
                distribution.
            ``(2) Allowance allocation to local governments.--In the 
        instance that the Secretary certifies that one or more local 
        governments are in compliance with this section pursuant to 
        subsection (e)(6)(B), the Administrator shall provide to each 
        such local government the portion of the emission allowances 
        that would have been provided to that State as a function of 
        the population of that locality as a proportion of the 
        population of that State as a whole.
            ``(3) Unallocated allowances.--To the extent that 
        allowances are not provided to State or local governments for 
        lack of certification in any year, those allowances shall be 
        added to the amount provided to those States and local 
        governments that are certified as eligible in that year.
            ``(4) Use of allowances.--Each State or each local 
        government shall use such emission allowances as it receives 
        pursuant to this section exclusively for the purposes of this 
        section, including covering a reasonable portion of the costs 
        of the development, adoption, implementation, and enforcement 
        of a State or local energy efficiency building code that meets 
        the national building code energy efficiency targets, or the 
        national energy efficiency building code. In a State where 
        local governments provide substantially all building code 
        enforcement, a minimum of 50 percent of the allowance value 
        received pursuant to this section shall be distributed to local 
        governments as a function of the relative populations of such 
        localities. In a State where local and State governments share 
        building code enforcement duties, the State and local shares of 
        allowance value required for enforcement shall be allocated in 
        proportion to the number of building inspections performed by 
        each level of government, and the share for local governments 
        shall be distributed as a function of the relative populations 
        of such localities. States shall further ensure that the 
        allowance value made available pursuant to section 782 of the 
        Clean Air Act and section 132 of the American Clean Energy and 
        Security Act of 2009 is provided to the applicable State or 
        local governmental entities as necessary to adopt and implement 
        energy efficiency building codes, provide training for 
        inspectors, ensure compliance, and provide such other functions 
        as necessary. Actions taken by local authorities pursuant to 
        this section shall constitute an acceptable use of funds 
        authorized pursuant to the Energy Efficiency and Conservation 
        Block Grant program under section 544 of the Energy 
        Independence and Security Act of 2007 (42 U.S.C. 17154).
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy $25,000,000, and such 
additional sums as may be necessary to provide enforcement of a 
national energy efficiency building code, for each of fiscal years 2010 
through 2020, and such sums thereafter as may be necessary to support 
the purposes of this section.
    ``(j) Annual Reports by Secretary.--The Secretary shall annually 
submit to Congress, and publish in the Federal Register, a report on--
            ``(1) the status of national energy efficiency building 
        codes;
            ``(2) the status of energy efficiency building code 
        adoption and compliance in the States;
            ``(3) the implementation of this section;
            ``(4) the status of Federal enforcement of building codes, 
        including coordination with State and local enforcement, and 
        the extent and resolution of any conflicts between the national 
        energy efficiency building code and other residential and 
        commercial building codes in force in the same jurisdictions; 
        and
            ``(5) impacts of past action under this section, and 
        potential impacts of further action, on lifetime energy use by 
        buildings, including resulting energy and cost savings.''.

SEC. 202. BUILDING RETROFIT PROGRAM.

    (a) Definitions.--For purposes of this section:
            (1) Assisted housing.--The term ``assisted housing'' means 
        those properties receiving project-based assistance pursuant to 
        section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), 
        section 811 of the Cranston-Gonzalez National Affordable 
        Housing Act (42 U.S.C. 8013), section 8 of the United States 
        Housing Act of 1937 (42 U.S.C. 1437f), or similar programs.
            (2) Nonresidential building.--The term ``nonresidential 
        building'' means a building with a primary use or purpose other 
        than residential housing, including any building used for 
        commercial offices, schools, academic and other public and 
        private institutions, nonprofit organizations including faith-
        based organizations, hospitals, hotels, and other 
        nonresidential purposes. Such buildings shall include mixed-use 
        properties used for both residential and nonresidential 
        purposes in which more than half of building floor space is 
        nonresidential.
            (3) Performance-based building retrofit program.--The term 
        ``performance-based building retrofit program'' means a program 
        that determines building energy efficiency success based on 
        actual measured savings after a retrofit is complete, as 
        evidenced by energy invoices or evaluation protocols.
            (4) Prescriptive building retrofit program.--The term 
        ``prescriptive building retrofit program'' means a program that 
        projects building retrofit energy efficiency success based on 
        the known effectiveness of measures prescribed to be included 
        in a retrofit.
            (5) Public housing.--The term ``public housing'' means 
        properties receiving assistance under section 9 of the United 
        States Housing Act of 1937 (42 U.S.C. 1437g).
            (6) Recommissioning; retrocommissioning.--The terms 
        ``recommissioning'' and ``retrocommissioning'' have the meaning 
        given those terms in section 543(f)(1) of the National Energy 
        Conservation Policy Act (42 U.S.C. 8253(f)(1)).
            (7) Residential building.--The term ``residential 
        building'' means a building whose primary use is residential. 
        Such buildings shall include single-family homes (both attached 
        and detached), owner-occupied units in larger buildings with 
        their own dedicated space-conditioning systems, apartment 
        buildings, multi-unit condominium buildings, public housing, 
        assisted housing, and buildings used for both residential and 
        nonresidential purposes in which more than half of building 
        floor space is residential.
            (8) State energy program.--The term ``State Energy 
        Program'' means the program under part D of title III of the 
        Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.).
    (b) Establishment.--The Administrator shall develop and implement, 
in consultation with the Secretary of Energy, standards for a national 
energy and environmental building retrofit policy for single-family and 
multifamily residences. The Administrator shall develop and implement, 
in consultation with the Secretary of Energy and the Director of 
Commercial High-Performance Green Buildings, standards for a national 
energy and environmental building retrofit policy for nonresidential 
buildings. The programs to implement the residential and nonresidential 
policies based on the standards developed under this section shall 
together be known as the Retrofit for Energy and Environmental 
Performance (REEP) program.
    (c) Purpose.--The purpose of the REEP program is to facilitate the 
retrofitting of existing buildings across the United States to achieve 
maximum cost-effective energy efficiency improvements and significant 
improvements in water use and other environmental attributes.
    (d) Federal Administration.--
            (1) Existing programs.--In creating and operating the REEP 
        program--
                    (A) the Administrator shall make appropriate use of 
                existing programs, including the Energy Star program 
                and in particular the Environmental Protection Agency 
                Energy Star for Buildings program; and
                    (B) the Secretary of Energy shall make appropriate 
                use of existing programs, including delegating 
                authority to the Director of Commercial High-
                Performance Green Buildings appointed under section 421 
                of the Energy Independence and Security Act of 2007 (42 
                U.S.C. 17081), who shall designate and provide funding 
                to support a high-performance green building 
                partnership consortium pursuant to subsection (f) of 
                such section to support efforts under this section.
            (2) Consultation and coordination.--The Administrator and 
        the Secretary of Energy shall consult with and coordinate with 
        the Secretary of Housing and Urban Development in carrying out 
        the REEP program with regard to retrofitting of public housing 
        and assisted housing. As a result of such consultation, the 
        Administrator shall establish standards to ensure that 
        retrofits of public housing and assisted housing funded 
        pursuant to this section are cost-effective, including 
        opportunities to address the potential co-performance of repair 
        and replacement needs that may be supported with other forms of 
        Federal assistance.
            (3) Assistance.--The Administrator and the Secretary of 
        Energy shall provide consultation and assistance to State and 
        local agencies for the establishment of revolving loan funds, 
        loan guarantees, or other forms of financial assistance under 
        this section.
    (e) State and Local Administration.--
            (1) Designation and delegation.--A State may designate one 
        or more agencies or entities, including those regulated by the 
        State, to carry out the purposes of this section, but shall 
        designate one entity or individual as the principal point of 
        contact for the Administrator regarding the REEP Program. The 
        designated State agency, agencies, or entities may delegate 
        performance of appropriate elements of the REEP program, upon 
        their request and subject to State law, to counties, 
        municipalities, appropriate public agencies, and other 
        divisions of local government, as well as to entities regulated 
        by the State. In making any such designation or delegation, a 
        State shall give priority to entities that administer existing 
        comprehensive retrofit programs, including those under the 
        supervision of State utility regulators. States shall maintain 
        responsibility for meeting the standards and requirements of 
        the REEP program. In any State that elects not to administer 
        the REEP program, a unit of local government may propose to do 
        so within its jurisdiction, and if the Administrator finds that 
        such local government is capable of administering the program, 
        the Administrator may provide allowances to that local 
        government, prorated according to the population of the local 
        jurisdiction relative to the population of the State, for 
        purposes of the REEP program.
            (2) Employment.--States and local government entities may 
        administer a REEP program in a manner that authorizes public or 
        regulated investor-owned utilities, building auditors and 
        inspectors, contractors, nonprofit organizations, for-profit 
        companies, and other entities to perform audits and retrofit 
        services under this section. A State may provide incentives for 
        retrofits without direct participation by the State or its 
        agents, so long as the resulting savings are measured and 
        verified. A State or local administrator of a REEP program 
        shall seek to ensure that sufficient qualified entities are 
        available to support retrofit activities so that building 
        owners have a competitive choice among qualified auditors, 
        raters, contractors, and providers of services related to 
        retrofits. Nothing in this section is intended to deny the 
        right of a building owner to choose the specific providers of 
        retrofit services to engage for a retrofit project in that 
        owner's building.
            (3) Equal incentives for equal improvement.--In general, 
        the States should strive to offer the same levels of incentives 
        for retrofits that meet the same efficiency improvement goals, 
        regardless of whether the State, its agency or entity, or the 
        building owner has conducted the retrofit achieving the 
        improvement, provided the improvement is measured and verified.
    (f) Elements of Reep Program.--The Administrator, in consultation 
with the Secretary of Energy, shall establish goals, guidelines, 
practices, and standards for accomplishing the purpose stated in 
subsection (c), and shall annually review and, as appropriate, revise 
such goals, guidelines, practices, and standards. The program under 
this section shall include the following:
            (1) Residential Energy Services Network (RESNET) or 
        Building Performance Institute (BPI) analyst certification of 
        residential building energy and environment auditors, 
        inspectors, and raters, or an equivalent certification system 
        as determined by the Administrator.
            (2) BPI certification or licensing by States of residential 
        building energy and environmental retrofit contractors, or an 
        equivalent certification or licensing system as determined by 
        the Administrator.
            (3) Provision of BPI, RESNET, or other appropriate 
        information on equipment and procedures, as determined by the 
        Administrator, that contractors can use to test the energy and 
        environmental efficiency of buildings effectively (such as 
        infrared photography and pressurized testing, and tests for 
        water use and indoor air quality).
            (4) Provision of clear and effective materials to describe 
        the testing and retrofit processes for typical buildings.
            (5) Guidelines for offering and managing prescriptive 
        building retrofit programs and performance-based building 
        retrofit programs for residential and nonresidential buildings.
            (6) Guidelines for applying recommissioning and 
        retrocommissioning principles to improve a building's 
        operations and maintenance procedures.
            (7) A requirement that building retrofits conducted 
        pursuant to a REEP program utilize, especially in all air-
        conditioned buildings, roofing materials with high solar energy 
        reflectance, unless inappropriate due to green roof management, 
        solar energy production, or for other reasons identified by the 
        Administrator, in order to reduce energy consumption within the 
        building, increase the albedo of the building's roof, and 
        decrease the heat island effect in the area of the building, 
        without reduction of otherwise applicable ceiling insulation 
        standards.
            (8) Determination of energy savings in a performance-based 
        building retrofit program through--
                    (A) for residential buildings, comparison of before 
                and after retrofit scores on the Home Energy Rating 
                System (HERS) Index, where the final score is produced 
                by an objective third party;
                    (B) for nonresidential buildings, Environmental 
                Protection Agency Portfolio Manager benchmarks; or
                    (C) for either residential or nonresidential 
                buildings, use of an Administrator-approved simulation 
                program by a contractor with the appropriate 
                certification, subject to appropriate software 
                standards and verification of at least 15 percent of 
                all work done, or such other percentage as the 
                Administrator may determine.
            (9) Guidelines for utilizing the Energy Star Portfolio 
        Manager, the Home Energy Rating System (HERS) rating system, 
        Home Performance with Energy Star program approvals, and any 
        other tools associated with the retrofit program.
            (10) Requirements and guidelines for post-retrofit 
        inspection and confirmation of work and energy savings.
            (11) Detailed descriptions of funding options for the 
        benefit of State and local governments, along with model forms, 
        accounting aids, agreements, and guides to best practices.
            (12) Guidance on opportunities for--
                    (A) rating or certifying retrofitted buildings as 
                Energy Star buildings, or as green buildings under a 
                recognized green building rating system;
                    (B) assigning Home Energy Rating System (HERS) or 
                similar ratings; and
                    (C) completing any applicable building performance 
                labels.
            (13) Sample materials for publicizing the program to 
        building owners, including public service announcements and 
        advertisements.
            (14) Processes for tracking the numbers and locations of 
        buildings retrofitted under the REEP program, with information 
        on projected and actual savings of energy and its value over 
        time.
    (g) Requirements.--As a condition of receiving allowances for the 
REEP program pursuant to this Act, a State or qualifying local 
government shall--
            (1) adopt the standards for training, certification of 
        contractors, certification of buildings, and post-retrofit 
        inspection as developed by the Administrator for residential 
        and nonresidential buildings, respectively, except as necessary 
        to match local conditions, needs, efficiency opportunities, or 
        other local factors, or to accord with State laws or 
        regulations, and then only after the Administrator approves 
        such a variance; and
            (2) establish fiscal controls and accounting procedures 
        (which conform to generally accepted government accounting 
        principles) sufficient to ensure proper accounting during 
        appropriate accounting periods for payments received and 
        disbursements, and for fund balances.
The Administrator shall conduct or require each State to have such 
independent financial audits of REEP-related funding as the 
Administrator considers necessary or appropriate to carry out the 
purposes of this section.
    (h) Options to Support Reep Program.--The emission allowances 
provided pursuant to this Act to the States SEED Accounts shall support 
the implementation through State REEP programs of alternate means of 
creating incentives for, or reducing financial barriers to, improved 
energy and environmental performance in buildings, consistent with this 
section, including--
            (1) implementing prescriptive building retrofit programs 
        and performance-based building retrofit programs;
            (2) providing credit enhancement, interest rate subsidies, 
        loan guarantees, or other credit support;
            (3) providing initial capital for public revolving fund 
        financing of retrofits, with repayments by beneficiary building 
        owners over time through their tax payments, calibrated to 
        create net positive cash flow to the building owner;
            (4) providing funds to support utility-operated retrofit 
        programs with repayments over time through utility rates, 
        calibrated to create net positive cash flow to the building 
        owner, and transferable from one building owner to the next 
        with the building's utility services;
            (5) providing funds to local government programs to provide 
        REEP services and financial assistance; and
            (6) other means proposed by State and local agencies, 
        subject to the approval of the Administrator.
    (i) Support for Program.--
            (1) Use of allowances.--Direct Federal support for the REEP 
        program is provided through the emission allowances allocated 
        to the States' SEED Accounts pursuant to section 132 of this 
        Act. To the extent that a State provides allowances to local 
        governments within the State to implement elements of the REEP 
        Program, that shall be deemed a distribution of such allowances 
        to units of local government pursuant to subsection (c)(1) of 
        that section.
            (2) Initial award limits.--Except as provided in paragraph 
        (3), State and local REEP programs may make per-building direct 
        expenditures for retrofit improvements, or their equivalent in 
        indirect or other forms of financial support, from funds 
        derived from the sale of allowances received directly from the 
        Administrator in amounts not to exceed the following amounts 
        per unit:
                    (A) Residential building program.--
                            (i) Awards.--For residential buildings--
                                    (I) support for a free or low-cost 
                                detailed building energy audit that 
                                prescribes measures sufficient to 
                                achieve at least a 20 percent reduction 
                                in energy use, by providing an 
                                incentive equal to the documented cost 
                                of such audit, but not more than $200, 
                                in addition to any earned by achieving 
                                a 20 percent or greater efficiency 
                                improvement;
                                    (II) a total of $1,000 for a 
                                combination of measures, prescribed in 
                                an audit conducted under subclause (I), 
                                designed to reduce energy consumption 
                                by more than 10 percent, and $2,000 for 
                                a combination of measures prescribed in 
                                such an audit, designed to reduce 
                                energy consumption by more than 20 
                                percent;
                                    (III) $3,000 for demonstrated 
                                savings of 20 percent, pursuant to a 
                                performance-based building retrofit 
                                program; and
                                    (IV) $1,000 for each additional 5 
                                percentage points of energy savings 
                                achieved beyond savings for which 
                                funding is provided under subclause 
                                (II) or (III).
                        Funding shall not be provided under clauses 
                        (II) and (III) for the same energy savings.
                            (ii) Maximum percentage.--Awards under 
                        clause (i) shall not exceed 50 percent of 
                        retrofit costs for each building. For buildings 
                        with multiple residential units, awards under 
                        clause (i) shall not be greater than 50 percent 
                        of the total cost of retrofitting the building, 
                        prorated among individual residential units on 
                        the basis of relative costs of the retrofit. In 
                        the case of public housing and assisted 
                        housing, the 50 percent contribution matching 
                        the contribution from REEP program funds may 
                        come from any other source, including other 
                        Federal funds.
                            (iii) Additional awards.--Additional awards 
                        may be provided for purposes of increasing 
                        energy efficiency, for buildings achieving at 
                        least 20 percent energy savings using funding 
                        provided under clause (i), in the form of 
                        grants of not more than $600 for measures 
                        projected or measured (using an appropriate 
                        method approved by the Administrator) to 
                        achieve at least 35 percent potable water 
                        savings through equipment or systems with an 
                        estimated service life of not less than seven 
                        years, and not more than an additional $20 may 
                        be provided for each additional one percent of 
                        such savings, up to a maximum total grant of 
                        $1,200.
                    (B) Nonresidential building program.--
                            (i) Awards.--For nonresidential buildings--
                                    (I) support for a free or low-cost 
                                detailed building energy audit that 
                                prescribes, as part of a energy-
                                reducing measures sufficient to achieve 
                                at least a 20 percent reduction in 
                                energy use, by providing an incentive 
                                equal to the documented cost of such 
                                audit, but not more than $500, in 
                                addition to any award earned by 
                                achieving a 20 percent or greater 
                                efficiency improvement;
                                    (II) $0.15 per square foot of 
                                retrofit area for demonstrated energy 
                                use reductions from 20 percent to 30 
                                percent;
                                    (III) $0.75 per square foot for 
                                demonstrated energy use reductions from 
                                30 percent to 40 percent;
                                    (IV) $1.60 per square foot for 
                                demonstrated energy use reductions from 
                                40 percent to 50 percent; and
                                    (V) $2.50 per square foot for 
                                demonstrated energy use reductions 
                                exceeding 50 percent.
                            (ii) Maximum percentage.--Amounts provided 
                        under subclauses (II) through (V) of clause (i) 
                        combined shall not exceed 50 percent of the 
                        total retrofit cost of a building. In 
                        nonresidential buildings with multiple units, 
                        such awards shall be prorated among individual 
                        units on the basis of relative costs of the 
                        retrofit.
                            (iii) Additional awards.--Additional awards 
                        may be provided, for buildings achieving at 
                        least 20 percent energy savings using funding 
                        provided under clause (i), as follows:
                                    (I) Water.--For purposes of 
                                increasing energy efficiency, grants 
                                may be made for whole building potable 
                                water use reduction (using an 
                                appropriate method approved by the 
                                Administrator) for up to 50 percent of 
                                the total retrofit cost, including 
                                amounts up to--
                                            (aa) $24.00 per thousand 
                                        gallons per year of potable 
                                        water savings of 40 percent or 
                                        more;
                                            (bb) $27.00 per thousand 
                                        gallons per year of potable 
                                        water savings of 50 percent or 
                                        more; and
                                            (cc) $30.00 per thousand 
                                        gallons per year of potable 
                                        water savings of 60 percent or 
                                        more.
                                    (II) Environmental improvements.--
                                Additional awards of up to $1,000 may 
                                be granted for the inclusion of other 
                                environmental attributes that the 
                                Administrator, in consultation with the 
                                Secretary, identifies as contributing 
                                to energy efficiency. Such attributes 
                                may include, but are not limited to 
                                waste diversion and the use of 
                                environmentally preferable materials 
                                (including salvaged, renewable, or 
                                recycled materials, and materials with 
                                no or low-VOC content). The 
                                Administrator may recommend that States 
                                develop such standards as are necessary 
                                to account for local or regional 
                                conditions that may affect the 
                                feasibility or availability of 
                                identified resources and attributes.
                            (iv) Indoor air quality minimum.--
                        Nonresidential buildings receiving incentives 
                        under this section must satisfy at a minimum 
                        the most recent version of ASHRAE Standard 62.1 
                        for ventilation, or the equivalent as 
                        determined by the Administrator. A State may 
                        issue a waiver from this requirement to a 
                        building project on a showing that such 
                        compliance is infeasible due to the physical 
                        constraints of the building's existing 
                        ventilation system, or such other limitations 
                        as may be specified by the Administrator.
                    (C) Historic buildings.--Notwithstanding 
                subparagraphs (A) and (B), a building in or eligible 
                for the National Register of Historic Places shall be 
                eligible for awards under this paragraph in amounts up 
                to 120 percent of the amounts set forth in 
                subparagraphs (A) and (B).
                    (D) Supplemental support.--State and local 
                governments may supplement the per-building 
                expenditures under this paragraph with funding from 
                other sources.
            (3) Adjustment.--The Administrator may adjust the specific 
        dollar limits funded by the sale of allowances pursuant to 
        paragraph (2) in years subsequent to the second year after the 
        date of enactment of this Act, and every 2 years thereafter, as 
        the Administrator determines necessary to achieve optimum cost-
        effectiveness and to maximize incentives to achieve energy 
        efficiency within the total building award amounts provided in 
        that paragraph, and shall publish and hold constant such 
        revised limits for at least 2 years. The Administrator, in 
        consultation with the Secretary of Housing and Urban 
        Development, may establish different dollar limits for public 
        housing and assisted housing than for other residential 
        buildings.
    (j) Report to Congress.--The Administrator shall conduct an annual 
assessment of the achievements of the REEP program in each State, shall 
prepare an annual report of such achievements and any recommendations 
for program modifications, and shall provide such report to Congress at 
the end of each fiscal year during which funding or other resources 
were made available to the States for the REEP Program.
    (k) Other Sources of Federal Support.--
            (1) Additional state energy program funds.--Any Federal 
        funding provided to a State Energy Program that is not required 
        to be expended for a different federally designated purpose may 
        be used to support a REEP program.
            (2) Program administration.--State Energy Offices or 
        designated State agencies may expend up to 10 percent of 
        available allowance value provided under this section for 
        program administration.
            (3) Authorization of appropriations.--There are authorized 
        to be appropriated for the purposes of this section, for each 
        of fiscal years 2010, 2011, 2012, and 2013--
                    (A) $50,000,000 to the Administrator for program 
                administration costs; and
                    (B) $20,000,000 to the Secretary of Energy for 
                program administration costs.

SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES.

    (a) Definitions.--In this section:
            (1) Manufactured home.--The term ``manufactured home'' has 
        the meaning given such term in section 603 of the National 
        Manufactured Housing Construction and Safety Standards Act of 
        1974 (42 U.S.C. 5402).
            (2) Energy star qualified manufactured home.--The term 
        ``Energy Star qualified manufactured home'' means a 
        manufactured home that has been designed, produced, and 
        installed in accordance with Energy Star's guidelines by an 
        Energy Star certified plant.
    (b) Purpose.--The purpose of this section is to assist low-income 
households residing in manufactured homes constructed prior to 1976 to 
save energy and energy expenditures by providing support toward the 
purchase of new Energy Star qualified manufactured homes.
    (c) State Implementation of Program.--
            (1) Manufactured home replacement program.--Any State may 
        provide to the owner of a manufactured home constructed prior 
        to 1976 a rebate to use toward the purchase of a new Energy 
        Star qualified manufactured home pursuant to this section.
            (2) Use of allowances.--Direct Federal support for the 
        program established in this section is provided through the 
        emission allowances allocated to the States' SEED Accounts 
        pursuant to section 132 of this Act. To the extent that a State 
        provides allowances to local governments within the State to 
        implement this program, that shall be deemed a distribution of 
        such allowances to units of local government pursuant to 
        subsection (c)(1) of that section.
            (3) Rebates.--
                    (A) Primary residence requirement.--A rebate 
                described under paragraph (1) may only be made to an 
                owner of a manufactured home constructed prior to 1976 
                that is used on a year-round basis as a primary 
                residence.
                    (B) Dismantling and replacement.--A rebate 
                described under paragraph (1) may be made only if the 
                manufactured home constructed prior to 1976 will be--
                            (i) rendered unusable for human habitation 
                        (including appropriate recycling); and
                            (ii) replaced, in the same general 
                        location, as determined by the applicable State 
                        agency, with an Energy Star qualified 
                        manufactured home.
                    (C) Single rebate.--A rebate described under 
                paragraph (1) may not be provided to any owner of a 
                manufactured home constructed prior to 1976 that was or 
                is a member of a household for which any other member 
                of the household was provided a rebate pursuant to this 
                section.
                    (D) Eligible households.--To be eligible to receive 
                a rebate described under paragraph (1), an owner of a 
                manufactured home constructed prior to 1976 shall 
                demonstrate to the applicable State agency that the 
                total income of all members the owner's household does 
                not exceed 200 percent of the Federal poverty level for 
                income in the applicable area.
                    (E) Advance availability.--A rebate may be provided 
                under this section in a manner to facilitate the 
                purchase of a new Energy Star qualified manufactured 
                home.
            (4) Rebate limitation.--Rebates provided by States under 
        this section shall not exceed $7,500 per manufactured home from 
        any value derived from the use of emission allowances provided 
        to the State pursuant to section 132.
            (5) Use of state funds.--A State providing rebates under 
        this section may supplement the amount of such rebates under 
        paragraph (4) by any additional amount is from State funds and 
        other sources, including private donations or grants from 
        charitable organizations.
            (6) Coordination with similar programs.--
                    (A) State programs.--A State conducting an existing 
                program that has the purpose of replacing manufactured 
                homes constructed prior to 1976 with Energy Star 
                qualified manufactured homes, may use allowance value 
                provided under section 782 of the Clean Air Act to 
                support such a program, provided such funding does not 
                exceed the rebate limitation amount under paragraph 
                (4).
                    (B) Federal programs.--The Secretary of Energy 
                shall coordinate with and seek to achieve the purpose 
                of this section through similar Federal programs 
                including--
                            (i) the Weatherization Assistance Program 
                        under part A of title IV of the Energy 
                        Conservation and Production Act (42 U.S.C. 6861 
                        et seq.); and
                            (ii) the program under part D of title III 
                        of the Energy Policy and Conservation Act (42 
                        U.S.C. 6321 et seq.).
                    (C) Coordination with other state agencies.--A 
                State agency using allowance value to administer the 
                program under this section may coordinate its efforts, 
                and share funds for administration, with other State 
                agencies involved in low-income housing programs.
            (7) Administrative expenses.--A State using allowance value 
        under this section may expend not more than 10 percent of such 
        value for administrative expenses related to this program.

SEC. 204. BUILDING ENERGY PERFORMANCE LABELING PROGRAM.

    (a) Establishment.--
            (1) Purpose.--The Administrator shall establish a building 
        energy performance labeling program with broad applicability to 
        the residential and commercial markets to enable and encourage 
        knowledge about building energy performance by owners and 
        occupants and to inform efforts to reduce energy consumption 
        nationwide.
            (2) Components.--In developing such program, the 
        Administrator shall--
                    (A) consider existing programs, such as 
                Environmental Protection Agency's Energy Star program, 
                the Home Energy Rating System (HERS) Index, and 
                programs at the Department of Energy;
                    (B) support the development of model performance 
                labels for residential and commercial buildings; and
                    (C) utilize incentives and other means to spur use 
                of energy performance labeling of public and private 
                sector buildings nationwide.
    (b) Data Assessment for Building Energy Performance.--
            (1) Initial report.--Not later than 90 days after the date 
        of enactment of this Act, the Administrator shall provide to 
        Congress, as well as to the Secretary of Energy and the Office 
        of Management and Budget, a report identifying--
                    (A) all principal building types for which 
                statistically significant energy performance data 
                exists to serve as the basis of measurement protocols 
                and labeling requirements for achieved building energy 
                performance; and
                    (B) those building types for which additional data 
                are required to enable the development of such 
                protocols and requirements.
            (2) Additional reports.--Additional updated reports shall 
        be provided under this subsection as often as The Administrator 
        considers practicable, but not less than every 2 years.
    (c) Building Data Acquisition.--
            (1) Resource requirements.--For all principal building 
        types identified under subsection (b), the Secretary of Energy, 
        not later than 90 days after a report by the Administrator 
        under subsection (b), shall provide to Congress, the 
        Administrator, and the Office of Management and Budget a 
        statement of additional resources needed, if any, to fully 
        develop the relevant data, as well as the anticipated timeline 
        for data development.
            (2) Consultation.--The Secretary of Energy shall consult 
        with the Administrator concerning the Administrator's ability 
        to use data series for these additional building types to 
        support the achieved performance component in the labeling 
        program.
            (3) Improvements to building energy consumption 
        databases.--
                    (A) Commercial database.--The Secretary of Energy 
                shall support improvements to the Commercial Buildings 
                Energy Consumption Survey (CBECS) as authorized by 
                section 205(k) of the Department of Energy Organization 
                Act (42 U.S.C. 7135(k))--
                            (i) to enable complete and robust data for 
                        the actual energy performance of principal 
                        building types currently covered by survey;
                            (ii) to cover additional building types as 
                        identified by the Administrator under 
                        subsection (b)(1)(B), to enable the development 
                        of achieved performance measurement protocols 
                        are developed for at least 90 percent of all 
                        major commercial building types within 5 years 
                        after the date of enactment of this Act; and
                            (iii) to include third-party audits of 
                        random data samplings to ensure the quality and 
                        accuracy of survey information.
                    (B) Residential databases.--The Administrator, in 
                consultation with the Energy Information Administration 
                and the Secretary of Energy, shall support improvements 
                to the Residential Energy Consumption Survey (RECS) as 
                authorized by section 205(k) of the Department of 
                Energy Organization Act (42 U.S.C. 7135(k)), or such 
                other residential energy performance databases as the 
                Administrator considers appropriate, to aid the 
                development of achieved performance measurement 
                protocols for residential building energy use for at 
                least 90 percent of the residential market within 5 
                years after the date of enactment of this Act.
                    (C) Consultation.--The Secretary of Energy and the 
                Administrator shall consult with public, private, and 
                nonprofit sector representatives from the building 
                industry and real estate industry to assist in the 
                evaluation and improvement of building energy 
                performance databases and labeling programs.
    (d) Identification of Measurement Protocols for Achieved 
Performance.--
            (1) Proposed protocols and requirements.--At the earliest 
        practicable date, but not later than 1 year after identifying a 
        building type under subsection (b)(1)(A), the Administrator 
        shall propose a measurement protocol for that building type and 
        a requirement detailing how to use that protocol in completing 
        applicable commercial or residential performance labels created 
        pursuant to this section.
            (2) Final rule.--After providing for notice and comment, 
        the Administrator shall publish a final rule containing a 
        measurement protocol and the corresponding requirements for 
        applying that protocol. Such a rule--
                    (A) shall define the minimum period for measurement 
                of energy use by buildings of that type and other 
                details for determining achieved performance, to 
                include leased buildings or parts thereof;
                    (B) shall identify necessary data collection and 
                record retention requirements; and
                    (C) may specify transition rules and exemptions for 
                classes of buildings within the building type.
    (e) Procedures for Evaluating Designed Performance.--The 
Administrator shall develop protocols for evaluating the designed 
performance of individual building types. The Administrator may conduct 
such feasibility studies and demonstration projects as are necessary to 
evaluate the sufficiency of proposed protocols for designed 
performance.
    (f) Creation of Building Energy Performance Labeling Program.--
            (1) Model label.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator shall propose a model 
        building energy label that provides a format--
                    (A) to display achieved performance and designed 
                performance data;
                    (B) that may be tailored for residential and 
                commercial buildings, and for single-occupancy and 
                multitenanted buildings; and
                    (C) to display other appropriate elements 
                identified during the development of measurement 
                protocols under subsections (d) and (e).
            (2) Inclusions.--Nothing in this section shall require the 
        inclusion on such a label of designed performance data where 
        impracticable or not cost effective, or to preclude the display 
        of both achieved performance and designed performance data for 
        a particular building where both such measures are available, 
        practicable, and cost effective.
            (3) Existing programs.--In developing the model label, the 
        Administrator shall consider existing programs, including--
                    (A) the Environmental Protection Agency's Energy 
                Star Portfolio Manager program and the California HERS 
                II Program Custom Approach for the achieved performance 
                component of the label;
                    (B) the Home Energy Rating System (HERS) Index 
                system for the designed performance component of the 
                label; and
                    (C) other Federal and State programs, including the 
                Department of Energy's related programs on building 
                technologies and those of the Federal Energy Management 
                Program.
            (4) Final rule.--After providing for notice and comment, 
        the Administrator shall publish a final rule containing the 
        label applicable to covered building types.
    (g) Demonstration Projects for Labeling Program.--
            (1) In general.--The Administrator shall conduct building 
        energy performance labeling demonstration projects for 
        different building types--
                    (A) to ensure the sufficiency of the current 
                Commercial Buildings Energy Consumption Survey and 
                other data to serve as the basis for new measurement 
                protocols for the achieved performance component of the 
                building energy performance labeling program;
                    (B) to inform the development of measurement 
                protocols for building types not currently covered by 
                the Commercial Buildings Energy Consumption Survey; and
                    (C) to identify any additional information that 
                needs to be developed to ensure effective use of the 
                model label.
            (2) Participation.--Such demonstration projects shall 
        include participation of--
                    (A) buildings from diverse geographical and climate 
                regions;
                    (B) buildings in both urban and rural areas;
                    (C) single-family residential buildings;
                    (D) multihousing residential buildings with more 
                than 50 units, including at least one project that 
                provides affordable housing to individuals of diverse 
                incomes;
                    (E) single-occupant commercial buildings larger 
                than 30,000 square feet;
                    (F) multitenanted commercial buildings larger than 
                50,000 square feet; and
                    (G) buildings from both the public and private 
                sectors.
            (3) Priority.--Priority in the selection of demonstration 
        projects shall be given to projects that facilitate large-scale 
        implementation of the labeling program for samples of buildings 
        across neighborhoods, geographic regions, cities, or States.
            (4) Findings.--The Administrator shall report any findings 
        from demonstration projects under this subsection, including an 
        identification of any areas of needed data improvement, to the 
        Department of Energy's Energy Information Administration and 
        Building Technologies Program.
            (5) Coordination.--The Administrator and the Secretary of 
        Energy shall coordinate demonstration projects undertaken 
        pursuant to this subsection with those undertaken as part of 
        the Zero-Net-Energy Commercial Buildings Initiative adopted 
        under section 422 of the Energy Independence and Security Act 
        of 2007 (42 U.S.C. 17082).
    (h) Implementation of Labeling Program.--
            (1) In general.--The Administrator, in consultation with 
        the Secretary of Energy, shall work with all State Energy 
        Offices established pursuant to part D of title III of the 
        Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.) or 
        other State authorities as necessary for the purpose of 
        implementing the labeling program established under this 
        section for commercial and residential buildings.
            (2) Outreach to local authorities.--The Administrator 
        shall, acting in consultation and coordination with the 
        respective States, encourage use of the labeling program by 
        counties and other localities to broaden access to information 
        about building energy use, for example, through disclosure of 
        building label contents in tax, title, and other records those 
        localities maintain. For this purpose, the Administrator shall 
        develop an electronic version of the label and information that 
        can be readily transmitted and read in widely-available 
        computer programs but is protected from unauthorized 
        manipulation.
            (3) Means of implementation.--In adopting the model 
        labeling program established under this section, a State shall 
        seek to ensure that labeled information be made accessible to 
        the public in a manner so that owners, lenders, tenants, 
        occupants, or other relevant parties can utilize it. Such 
        accessibility may be accomplished through--
                    (A) preparation, and public disclosure of the label 
                through filing with tax and title records at the time 
                of--
                            (i) a building audit conducted with support 
                        from Federal or State funds;
                            (ii) a building energy-efficiency retrofit 
                        conducted in response to such an audit;
                            (iii) a final inspection of major 
                        renovations or additions made to a building in 
                        accordance with a building permit issued by a 
                        local government entity;
                            (iv) a sale that is recorded for title and 
                        tax purposes consistent with paragraph (8);
                            (v) a new lien recorded on the property for 
                        more than a set percentage of the assessed 
                        value of the property, if that lien reflects 
                        public financial assistance for energy-related 
                        improvements to that building; or
                            (vi) a change in ownership or operation of 
                        the building for purposes of utility billing; 
                        or
                    (B) other appropriate means.
            (4) State implementation of program.--
                    (A) Eligibility.--A State may become eligible to 
                utilize allowance value to implement this program by--
                            (i) adopting by statute or regulation a 
                        requirement that buildings be assessed and 
                        labeled, consistent with the labeling 
                        requirements of the program established under 
                        this section; or
                            (ii) adopting a plan to implement a model 
                        labeling program consistent with this section 
                        within one year of enactment of this Act, 
                        including the establishment of that program 
                        within 3 years after the date of enactment of 
                        this Act, and demonstrating continuous progress 
                        under that plan.
                    (B) Use of allowances.--Direct Federal support for 
                the program established in this section is provided 
                through the emission allowances allocated to the 
                States' SEED Accounts pursuant to section 132 of this 
                Act. To the extent that a State provides allowances to 
                local governments within the State to implement this 
                program, that shall be deemed a distribution of such 
                allowances to units of local government pursuant to 
                subsection (c)(1) of that section.
            (5) Guidance.--The Administrator may create or identify 
        model programs and resources to provide guidance to offer to 
        States and localities for creating labeling programs consistent 
        with the model program established under this section.
            (6) Progress report.--The Administrator, in consultation 
        with the Secretary of Energy, shall provide a progress report 
        to Congress not later than 3 years after the date of enactment 
        of this Act that--
                    (A) evaluates the effectiveness of efforts to 
                advance use of the model labeling program by States and 
                localities;
                    (B) recommends any legislative changes necessary to 
                broaden the use of the model labeling program; and
                    (C) identifies any changes to broaden the use of 
                the model labeling program that the Administrator has 
                made or intends to make that do not require additional 
                legislative authority.
            (7) State information.--The Administrator may require 
        States to report to the Administrator information that the 
        Administrator requires to provide the report required under 
        paragraph (6).
            (8) Prevention of disruption of sales transactions.--No 
        State shall implement a new labeling program pursuant to this 
        section in a manner that requires the labeling of a building to 
        occur after a contract has been executed for the sale of that 
        building and before the sales transaction is completed.
    (i) Implementation of Labeling Program in Federal Buildings.--
            (1) Use of labeling program.--The Secretary of Energy and 
        the Administrator shall use the labeling program established 
        under this section to evaluate energy performance in the 
        facilities of the Department of Energy and the Environmental 
        Protection Agency, respectively, to the extent practicable, and 
        shall encourage and support implementation efforts in other 
        Federal agencies.
            (2) Annual progress report.--The Secretary of Energy and 
        Administrator shall provide an annual progress report to 
        Congress and the Office of Management and Budget detailing 
        efforts to implement this subsection, as well as any best 
        practices or needed resources identified as a result of such 
        efforts.
    (j) Public Outreach.--The Secretary of Energy and the 
Administrator, in consultation with nonprofit and industry stakeholders 
with specialized expertise, and in conjunction with other energy 
efficiency public awareness efforts, shall establish a business and 
consumer education program to increase awareness about the importance 
of building energy efficiency and to facilitate widespread use of the 
labeling program established under this section.
    (k) Definitions.--In this section:
            (1) Building type.--The term ``building type'' means a 
        grouping of buildings as identified by their principal building 
        activities, or as grouped by their use, including office 
        buildings, laboratories, libraries, data centers, retail 
        establishments, hotels, warehouses, and educational buildings.
            (2) Measurement protocol.--The term ``measurement 
        protocol'' means the methodology, prescribed by the 
        Administrator, for defining a benchmark for building energy 
        performance for a specific building type and for measuring that 
        performance against the benchmark.
            (3) Achieved performance.--The term ``achieved 
        performance'' means the actual energy consumption of a building 
        as compared to a baseline building of the same type and size, 
        determined by actual consumption data normalized for 
        appropriate variables.
            (4) Designed performance.--The term ``designed 
        performance'' means the energy consumption performance a 
        building would achieve if operated consistent with its design 
        intent for building energy use, utilizing a standardized set of 
        operational conditions informed by data collected or confirmed 
        during an energy audit.
    (l) Authorization of Appropriations.--There are authorized to be 
appropriated--
            (1) to the Administrator $50,000,000 for implementation of 
        this section for each fiscal year from 2010 through 2020; and
            (2) to the Secretary of Energy $20,000,000 for 
        implementation of this section for fiscal year 2010 and 
        $10,000,000 for fiscal years 2011 through 2020.

SEC. 205. TREE PLANTING PROGRAMS.

    (a) Findings.--The Congress finds that--
            (1) the utility sector is the largest single source of 
        greenhouse gas emissions in the United States today, producing 
        approximately one-third of the country's emissions;
            (2) heating and cooling homes accounts for nearly 60 
        percent of residential electricity usage in the United States;
            (3) shade trees planted in strategic locations can reduce 
        residential cooling costs by as much as 30 percent;
            (4) shade trees have significant clean-air benefits 
        associated with them;
            (5) every 100 healthy large trees removes about 300 pounds 
        of air pollution (including particulate matter and ozone) and 
        about 15 tons of carbon dioxide from the air each year;
            (6) tree cover on private property and on newly-developed 
        land has declined since the 1970s, even while emissions from 
        transportation and industry have been rising; and
            (7) in over a dozen test cities across the United States, 
        increasing urban tree cover has generated between two and five 
        dollars in savings for every dollar invested in such tree 
        planting.
    (b) Definitions.--As used in this section:
            (1) The term ``Secretary'' refers to the Secretary of 
        Energy.
            (2) The term ``retail power provider'' means any entity 
        authorized under applicable State or Federal law to generate, 
        distribute, or provide retail electricity, natural gas, or fuel 
        oil service.
            (3) The term ``tree-planting organization'' means any 
        nonprofit or not-for-profit group which exists, in whole or in 
        part, to--
                    (A) expand urban and residential tree cover;
                    (B) distribute trees for planting;
                    (C) increase awareness of the environmental and 
                energy-related benefits of trees;
                    (D) educate the public about proper tree planting, 
                care, and maintenance strategies; or
                    (E) carry out any combination of the foregoing 
                activities.
            (4) The term ``tree-siting guidelines'' means a 
        comprehensive list of science-based measurements outlining the 
        species and minimum distance required between trees planted 
        pursuant to this section, in addition to the minimum required 
        distance to be maintained between such trees and--
                    (A) building foundations;
                    (B) air conditioning units;
                    (C) driveways and walkways;
                    (D) property fences;
                    (E) preexisting utility infrastructure;
                    (F) septic systems;
                    (G) swimming pools; and
                    (H) other infrastructure as deemed appropriate.
            (5) The terms ``small office'', ``small office buildings'', 
        and ``small office settings'' means nonresidential buildings or 
        structures zoned for business purposes that are 20,000 square 
        feet or less in total area.
    (c) Purposes.--The purpose of this section is to establish a grant 
program to assist retail power providers with the establishment and 
operation of targeted tree-planting programs in residential and small 
office settings, for the following purposes:
            (1) Reducing the peak-load demand for electricity from 
        residences and small office buildings during the summer months 
        through direct shading of buildings provided by strategically 
        planted trees.
            (2) Reducing wintertime demand for energy from residences 
        and small office buildings by blocking cold winds from reaching 
        such structures, which lowers interior temperatures and drives 
        heating demand.
            (3) Protecting public health by removing harmful pollution 
        from the air.
            (4) Utilizing the natural photosynthetic and transpiration 
        process of trees to lower ambient temperatures and absorb 
        carbon dioxide, thus mitigating the effects of climate change.
            (5) Lowering electric bills for residential and small 
        office ratepayers by limiting electricity consumption without 
        reducing benefits.
            (6) Relieving financial and demand pressure on retail power 
        providers that stems from large peak-load energy demand.
            (7) Protecting water quality and public health by reducing 
        stormwater runoff and keeping harmful pollutants from entering 
        waterways.
            (8) Ensuring that trees are planted in locations that limit 
        the amount of public money needed to maintain public and 
        electric infrastructure.
    (d) General Authority.--
            (1) Assistance.--The Secretary is authorized to provide 
        financial, technical, and related assistance to retail power 
        providers to assist with the establishment of new, or continued 
        operation of existing, targeted tree-planting programs for 
        residences and small office buildings.
            (2) Public recognition initiative.--In carrying out the 
        authority provided under this section, the Secretary shall also 
        create a national public recognition initiative to encourage 
        participation in tree-planting programs by retail power 
        providers.
            (3) Eligibility.--Only those programs which utilize 
        targeted, strategic tree-siting guidelines to plant trees in 
        relation to building location, sunlight, and prevailing wind 
        direction shall be eligible for assistance under this section.
            (4) Requirements.--In order to qualify for assistance under 
        this section, a tree-planting program shall meet each of the 
        following requirements:
                    (A) The program shall provide free or discounted 
                shade-providing or wind-reducing trees to residential 
                and small office consumers interested in lowering their 
                home energy costs.
                    (B) The program shall optimize the electricity-
                consumption reduction benefit of each tree by planting 
                in strategic locations around a given residence or 
                small office.
                    (C) The program shall either--
                            (i) provide maximum amounts of shade during 
                        summer intervals when residences and small 
                        offices are exposed to the most sun intensity; 
                        or
                            (ii) provide maximum amounts of wind 
                        protection during fall and winter intervals 
                        when residences and small offices are exposed 
                        to the most wind intensity.
                    (D) The program shall use the best available 
                science to create tree siting guidelines which dictate 
                where the optimum tree species are best planted in 
                locations that achieve maximum reductions in consumer 
                energy demand while causing the least disruption to 
                public infrastructure, considering overhead and 
                underground facilities.
                    (E) The program shall receive certification from 
                the Secretary that it is designed to achieve the goals 
                set forth in subparagraphs (A) through (D). In 
                designating criteria for such certification, the 
                Secretary shall collaborate with the United States 
                Forest Service's Urban and Community Forestry Program 
                to ensure that certification requirements are 
                consistent with such above goals.
            (5) New program funding share.--The Secretary shall ensure 
        that no less than 30 percent of the funds made available under 
        this section are distributed to retail power providers which--
                    (A) have not previously established or operated 
                qualified tree-planting programs; or
                    (B) are operating qualified tree-planting programs 
                which were established no more than three years prior 
                to the date of enactment of this section.
    (e) Agreements Between Electricity Providers and Tree-planting 
Organizations.--
            (1) Grant authorization.--In providing assistance under 
        this section, the Secretary is authorized to award grants only 
        to retail power providers that have entered into binding legal 
        agreements with nonprofit tree-planting organizations.
            (2) Conditions of agreement.--Those agreements between 
        retail power providers and tree-planting organizations shall 
        set forth conditions under which nonprofit tree-planting 
        organizations shall provide targeted tree-planting programs 
        which may require these organizations to--
                    (A) participate in local technical advisory 
                committees responsible for drafting general tree-siting 
                guidelines and choosing the most effective species of 
                trees to plant in given locations;
                    (B) coordinate volunteer recruitment to assist with 
                the physical act of planting trees in residential 
                locations;
                    (C) undertake public awareness campaigns to educate 
                local residents about the benefits, cost savings, and 
                availability of free shade trees;
                    (D) establish education and information campaigns 
                to encourage recipients to maintain their shade trees 
                over the long term;
                    (E) serve as the point of contact for existing and 
                potential residential participants who have questions 
                or concerns regarding the tree-planting program;
                    (F) require tree recipients to sign agreements 
                committing to voluntary stewardship and care of 
                provided trees;
                    (G) monitor and report on the survival, growth, 
                overall health, and estimated energy savings of 
                provided trees up until the end of their establishment 
                period which shall be no less than five years; and
                    (H) ensure that trees planted near existing power 
                lines will not interfere with energized electricity 
                distribution lines when mature, and that no new trees 
                will be planted under or adjacent to high-voltage 
                electric transmission lines without prior consultation 
                with the applicable retail power provider receiving 
                assistance under this section.
            (3) Lack of nonprofit organization.--If qualified nonprofit 
        or not-for-profit tree planting organizations do not exist or 
        operate within areas served by retail power providers applying 
        for assistance under this section, the requirements of this 
        section shall apply to binding legal agreements entered into by 
        such retail power providers and one of the following entities:
                    (A) Local municipal governments with jurisdiction 
                over the urban or suburban forest.
                    (B) The State Forester for the State in which the 
                tree planting program will operate.
                    (C) The United States Forest Service's Urban and 
                Community Forestry representative for the State in 
                which the tree-planting program will operate.
                    (D) A landscaping services company that is--
                            (i) identified in consultation with a 
                        national or State nonprofit or not-for-profit 
                        tree-planting organization;
                            (ii) licensed to operate in the State in 
                        which the tree-planting program will operate; 
                        and
                            (iii) a business as defined by the United 
                        States Census Bureau's 2007 North American 
                        Industry Classification System Code 561730.
    (f) Technical Advisory Committees.--
            (1) Description.--In order to qualify for assistance under 
        this section, the retail power provider shall establish and 
        consult with a local technical advisory committee which shall 
        provide advice and consultation to the program, and may--
                    (A) design and adopt an approved plant list that 
                emphasizes the use of hardy, noninvasive tree species 
                and, where geographically appropriate, the use of 
                native, or site-adapted, or low water-use shade trees;
                    (B) design and adopt planting, installation, and 
                maintenance specifications and create a process for 
                inspection and quality control;
                    (C) ensure that tree recipients are educated to 
                care for and maintain their trees over the long term;
                    (D) help the public become more engaged and 
                educated in the planting and care of shade trees;
                    (E) prioritize which sites receive trees, giving 
                preference to locations with the most potential for 
                energy conservation and secondary preference to areas 
                where the average annual income is below the regional 
                median; and
                    (F) assist with monitoring and collection of data 
                on tree health, tree survival, and energy conservation 
                benefits generated under this section.
            (2) Compensation.--Individuals serving on local technical 
        advisory committees shall not receive compensation for their 
        service.
            (3) Composition.--Local technical advisory committees shall 
        be composed of representatives from public, private, and 
        nongovernmental agencies with expertise in demand-side energy 
        efficiency management, urban forestry, or arboriculture, and 
        shall be composed of the following:
                    (A) Up to 4 persons, but no less than one person, 
                representing the retail power provider receiving 
                assistance under this section.
                    (B) Up to 4 persons, but no less than one person, 
                representing the local tree-planting organization which 
                will partner with the retail power provider to carry 
                out this section.
                    (C) Up to 3 persons representing local nonprofit 
                conservation or environmental organizations. Preference 
                shall be given to those entities which are organized 
                under section 501(c)(3) of the Internal Revenue Code of 
                1986, and which have demonstrated expertise engaging 
                the public in energy conservation, energy efficiency, 
                or green building practices or a combination thereof, 
                such that no single organization is represented by more 
                than one individual under this paragraph.
                    (D) Up to 2 persons representing a local affordable 
                housing agency, affordable housing builder, or 
                community development corporation.
                    (E) Up to 3, but no less than one, persons 
                representing local city or county government for each 
                municipality where a shade tree-planting program will 
                take place; at least one of these representatives shall 
                be the city or county forester, city or county 
                arborist, or functional equivalent.
                    (F) Up to one person representing the local 
                government agency responsible for management of roads, 
                sewers, and infrastructure, including but not limited 
                to public works departments, transportation agencies, 
                or equivalents.
                    (G) Up to 3 persons representing the nursery and 
                landscaping industry.
                    (H) Up to 3 persons representing the research 
                community or academia with expertise in natural 
                resources or energy management issues.
            (4) Chairperson.--Each local technical advisory committee 
        shall elect a chairperson to preside over Committee meetings, 
        act as a liaison to governmental and other outside entities, 
        and direct the general operation of the committee; only 
        committee representatives from paragraph (3)(A) or paragraph 
        (3)(B) of this subsection shall be eligible to act as local 
        technical advisory committee chairpersons.
            (5) Credentials.--At least one of the members of each local 
        technical advisory committee shall be certified with one or 
        more of the following credentials: International Society of 
        Arboriculture; Certified Arborist, ISA; Certified Arborist 
        Municipal Specialist, ISA; Certified Arborist Utility 
        Specialist, ISA; Board Certified Master Arborist; or Registered 
        Landscape Architect recommended by the American Society of 
        Landscape Architects.
    (g) Cost-share Program.--
            (1) Federal share.--The Federal share of support for 
        projects funded under this section shall not exceed 50 percent 
        of the cost of such project and shall be provided on a matching 
        basis.
            (2) Non-federal share.--The non-Federal share of such costs 
        may be paid or contributed by any governmental or 
        nongovernmental entity other than from funds derived directly 
        or indirectly from an agency or instrumentality of the United 
        States.
    (h) Rulemaking.--
            (1) Rulemaking period.--The Secretary shall be authorized 
        to solicit comments and initiate a rulemaking period that shall 
        last no more than 6 months after the date of enactment of this 
        section.
            (2) Competitive grant rule.--At the conclusion of the 
        rulemaking period under paragraph (1), the Secretary shall 
        promulgate a rule governing a public, competitive grants 
        process through which retail power providers may apply for 
        Federal support under this section.
    (i) Nonduplicity.--Nothing in this section shall be construed to 
supersede, duplicate, cancel, or negate the programs or authorities 
provided under section 9 of the Cooperative Forestry Assistance Act of 
1978 (92 Stat. 369; Public Law 95-313; 16 U.S.C. 2105).
    (j) Authorization of Appropriations.--There are hereby authorized 
to be appropriated such sums as may be necessary for the implementation 
of this section.

SEC. 206. ENERGY EFFICIENCY FOR DATA CENTER BUILDINGS.

    Section 453(c)(1) of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17112(c)(1)) is amended by inserting ``but not later 
than 2 years after the date of enactment of this Act'' after 
``described in subsection (b)''.

     Subtitle B--Lighting and Appliance Energy Efficiency Programs

SEC. 211. LIGHTING EFFICIENCY STANDARDS.

    (a) Outdoor Lighting.--
            (1) Definitions.--
                    (A) Section 340(1) of the Energy Policy and 
                Conservation Act (42 U.S.C. 6311(1)) is amended by 
                striking subparagraph (L) and inserting the following:
                    ``(L) Outdoor luminaires.
                    ``(M) Outdoor high light output lamps.
                    ``(N) Any other type of industrial equipment which 
                the Secretary classifies as covered equipment under 
                section 341(b).''.
                    (B) Section 340 of the Energy Policy and 
                Conservation Act (42 U.S.C. 6311) is amended as adding 
                at the end the following:
            ``(25) The term `luminaire' means a complete lighting unit 
        consisting of one or more light sources and ballast(s), 
        together with parts designed to distribute the light, to 
        position and protect such lamps, and to connect such light 
        sources to the power supply.
            ``(26) The term `outdoor luminaire' means a luminaire that 
        is listed as suitable for wet locations pursuant to 
        Underwriters Laboratories Inc. standard UL 1598 and is labeled 
        as `Suitable for Wet Locations' consistent with section 
        410.4(A) of the National Electrical Code 2005, or is designed 
        for roadway illumination and meets the requirements of Addendum 
        A for IESNA TM-15-07: Backlight, Uplight, and Glare (BUG) 
        Ratings, except for--
                    ``(A) luminaires designed for outdoor video display 
                images that cannot be used in general lighting 
                applications;
                    ``(B) portable luminaires designed for use at 
                construction sites;
                    ``(C) luminaires designed for continuous immersion 
                in swimming pools and other water features;
                    ``(D) seasonal luminaires incorporating solely 
                individual lamps rated at 10 watts or less;
                    ``(E) luminaires designed to be used in emergency 
                conditions that incorporate a means of charging a 
                battery and a device to switch the power supply to 
                emergency lighting loads automatically upon failure of 
                the normal power supply;
                    ``(F) components used for repair of installed 
                luminaries and that meet the requirements of section 
                342(h);
                    ``(G) a luminaire utilizing an electrode-less 
                fluorescent lamp as the light source;
                    ``(H) decorative gas lighting systems;
                    ``(I) luminaires designed explicitly for lighting 
                for theatrical purposes, including performance, stage, 
                film production, and video production;
                    ``(J) luminaires designed as theme elements in 
                theme/amusement parks and that cannot be used in most 
                general lighting applications;
                    ``(K) luminaires designed explicitly for vehicular 
                roadway tunnels designed to comply with ANSI/IESNA RP-
                22-05;
                    ``(L) luminaires designed explicitly for hazardous 
                locations meeting UL Standard 844;
                    ``(M) searchlights;
                    ``(N) luminaires that are designed to be recessed 
                into a building, and that cannot be used in most 
                general lighting applications;
                    ``(O) a luminaire rated only for residential 
                applications utilizing a light source or sources 
                regulated under the amendments made by section 321 of 
                the Energy Independence and Security Act of 2007 and 
                with a light output no greater than 2,600 lumens;
                    ``(P) a residential pole-mounted luminaire that is 
                not rated for commercial use utilizing a light source 
                or sources meeting the efficiency requirements of 
                section 231 of the Energy Independence and Security Act 
                of 2007 and mounted on a post or pole not taller than 
                10.5 feet above ground and with a light output not 
                greater than 2,600 lumens;
                    ``(Q) a residential fixture with E12 (Candelabra) 
                bases that is rated for not more than 300 watts total; 
                or
                    ``(R) a residential fixture with medium screw bases 
                that is rated for not more than 145 watts.
            ``(27) The term `outdoor high light outputlamp' means a 
        lamp that--
                    ``(A) has a rated lumen output not less than 2601 
                lumens;
                    ``(B) is capable of being operated at a voltage not 
                less than 110 volts and not greater than 300 volts, or 
                driven at a constant current of 6.6 amperes;
                    ``(C) is not a Parabolic Aluminized Reflector lamp; 
                and
                    ``(D) is not a J-type double-ended (T-3) halogen 
                quartz lamp, utilizing R-7S bases, that is manufactured 
                before January 1, 2015.
            ``(28) The term `outdoor lighting control' means a device 
        incorporated in a luminaire that receives a signal, from either 
        a sensor (such as an occupancy sensor, motion sensor, or 
        daylight sensor) or an input signal (including analog or 
        digital signals communicated through wired or wireless 
        technology), and can adjust the light level according to the 
        signal.''.
            (2) Standards.-- Section 342 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6313) is amended by adding at the 
        end the following:
    ``(g) Outdoor Luminaires.--
            ``(1) Each outdoor luminaire manufactured on or after 
        January 1, 2011, shall--
                    ``(A) have an initial luminaire efficacy of at 
                least 50 lumens per watt; and
                    ``(B) be designed to use a light source with a 
                lumen maintenance, calculated as mean rated lumens 
                divided by initial lumens, of at least 0.6.
            ``(2) Each outdoor luminaire manufactured on or after 
        January 1, 2013, shall--
                    ``(A) have an initial luminaire efficacy of at 
                least 70 lumens per watt; and
                    ``(B) be designed to use a light source with a 
                lumen maintenance, calculated as mean rated lumens 
                divided by initial lumens, of at least 0.6.
            ``(3) Each outdoor luminaire manufactured on or after 
        January 1, 2015, shall--
                    ``(A) have an initial luminaire efficacy of at 
                least 80 lumens per watt; and
                    ``(B) be designed to use a light source with a 
                lumen maintenance, calculated as mean rated lumens 
                divided by initial lumens, of at least 0.65.
            ``(4) In addition to the requirements of paragraphs (1) 
        through (3), each outdoor luminaire manufactured on or after 
        January 1, 2011, shall have the capability of producing at 
        least two different light levels, including 100 percent and 60 
        percent of full lamp output as tested with the maximum rated 
        lamp per UL1598 or the manufacturer's maximum specified for the 
        luminaire under test.
            ``(5)(A) Not later than January 1, 2017, the Secretary 
        shall issue a final rule amending the applicable standards 
        established in paragraphs (3) and (4) if technologically 
        feasible and economically justified.
            ``(B) A final rule issued under subparagraph (A) shall 
        establish efficiency standards at the maximum level that is 
        technically feasible and economically justified, as provided in 
        subsections (o) and (p) of section 325. The Secretary may also, 
        in such rulemaking, amend or discontinue the product exclusions 
        listed in section 340(26)(A) through (P), or amend the lumen 
        maintenance requirements in paragraph (3) if the Secretary 
        determines that such amendments are consistent with the 
        purposes of this Act.
            ``(C) If the Secretary issues a final rule under 
        subparagraph (A) establishing amended standards, the final rule 
        shall provide that the amended standards apply to products 
        manufactured on or after January 1, 2020, or one year after the 
        date on which the final amended standard is published, 
        whichever is later.
    ``(h) Outdoor High Light Output Lamps.--Each outdoor high light 
output lamp manufactured on or after January 1, 2012, shall have a 
lighting efficiency of at least 45 lumens per watt.''.
            (3) Test procedures.-- Section 343(a) of the Energy Policy 
        and Conservation Act (42 U.S.C. 6314(a)) is amended by adding 
        at the end the following:
            ``(10) Outdoor lighting.--
                    ``(A) With respect to outdoor luminaires and 
                outdoor high light output lamps, the test procedures 
                shall be based upon the test procedures specified in 
                illuminating engineering society procedures LM-79 as of 
                March 1, 2009, and LM-31, and/or other appropriate 
                consensus test procedures developed by the Illuminating 
                Engineering Society or other appropriate consensus 
                standards bodies.
                    ``(B) If illuminating engineering society procedure 
                LM--79 is amended, the Secretary shall amend the test 
                procedures established in subparagraph (A) as necessary 
                to be consistent with the amended LM-79 test procedure, 
                unless the Secretary determines, by rule, published in 
                the Federal Register and supported by clear and 
                convincing evidence, that to do so would not meet the 
                requirements for test procedures under paragraph (2).
                    ``(C) The Secretary may revise the test procedures 
                for outdoor luminaires or outdoor high light output 
                lamps by rule consistent with paragraph (2), and may 
                incorporate as appropriate consensus test procedures 
                developed by the Illuminating Engineering Society or 
                other appropriate consensus standards bodies.''.
            (4) Preemption.-- Section 345 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6316) is amended by adding at the 
        end the following:
    ``(i)(1) Except as provided in paragraph (2), section 327 shall 
apply to outdoor luminaires to the same extent and in the same manner 
as the section applies under part B.
    ``(2) Any State standard that is adopted on or before January 1, 
2015, pursuant to a statutory requirement to adopt efficiency standards 
for reducing outdoor lighting energy use enacted prior to January 31, 
2008, shall not be preempted.''.
            (5) Energy efficiency standards for certain luminaires.--
        Not later than 1 year after the date of enactment of this Act, 
        the Secretary of Energy shall, in consultation with the 
        National Electrical Manufacturers Association, collect data for 
        United States sales of luminaires described in section 
        340(26)(H) and (M) of the Energy Policy and Conservation Act, 
        to determine the historical growth rate. If the Secretary finds 
        that the growth in market share of such luminaires exceeds 
        twice the year to year rate of the average of the previous 
        three years, then the Secretary shall within 12 months initiate 
        a rulemaking to determine if such exclusion should be 
        eliminated, if substitute products exist that perform more 
        efficiently and fulfill the performance functions of these 
        luminaires.
    (b) Portable Lighting.--
            (1) Portable light fixtures.--
                    (A) Definitions.--Section 321 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6291) is amended by 
                adding at the end the following:
            ``(67) Art work light fixture.--The term `art work light 
        fixture' means a light fixture designed only to be mounted 
        directly to an art work and for the purpose of illuminating 
        that art work.
            ``(68) LED light engine.--The term `LED light engine' or 
        `LED light engine with integral heat sink' means a subsystem of 
        an LED light fixture that--
                    ``(A) includes 1 or more LED components, 
                including--
                            ``(i) an LED driver power source with 
                        electrical and mechanical interfaces; and
                            ``(ii) an integral heat sink to provide 
                        thermal dissipation; and
                    ``(B) may be designed to accept additional 
                components that provide aesthetic, optical, and 
                environmental control.
            ``(69) LED light fixture.--The term `LED light fixture' 
        means a complete lighting unit consisting of--
                    ``(A) an LED light source with 1 or more LED lamps 
                or LED light engines; and
                    ``(B) parts--
                            ``(i) to distribute the light;
                            ``(ii) to position and protect the light 
                        source; and
                            ``(iii) to connect the light source to 
                        electrical power.
            ``(70) Light fixture.--The term `light fixture' means a 
        product designed to provide light that includes--
                    ``(A) at least 1 lamp socket; and
                    ``(B) parts--
                            ``(i) to distribute the light;
                            ``(ii) position and protect 1 or more 
                        lamps; and
                            ``(iii) to connect 1 or more lamps to a 
                        power supply.
            ``(71) Portable light fixture.--
                    ``(A) In general.--The term `portable light 
                fixture' means a light fixture that has a flexible cord 
                and an attachment plug for connection to a nominal 120-
                volt circuit that--
                            ``(i) allows the user to relocate the 
                        product without any rewiring; and
                            ``(ii) typically can be controlled with a 
                        switch located on the product or the power cord 
                        of the product.
                    ``(B) Exclusions.--The term `portable light 
                fixture' does not include--
                            ``(i) direct plug-in night lights, sun or 
                        heat lamps, medical or dental lights, portable 
                        electric hand lamps, signs or commercial 
                        advertising displays, photographic lamps, 
                        germicidal lamps, or light fixtures for marine 
                        use or for use in hazardous locations (as those 
                        terms are defined in ANSI/NFPA 70 of the 
                        National Electrical Code); or
                            ``(ii) decorative lighting strings, 
                        decorative lighting outfits, or electric 
                        candles or candelabra without lamp shades that 
                        are covered by Underwriter Laboratories (UL) 
                        standard 588, `Seasonal and Holiday Decorative 
                        Products'.''.
                    (B) Coverage.--
                            (i) In general.--Section 322(a) of the 
                        Energy Policy and Conservation Act (42 U.S.C. 
                        6292(a)) is amended--
                                    (I) by redesignating paragraph (20) 
                                as paragraph (24); and
                                    (II) by inserting after paragraph 
                                (19) the following:
            ``(20) Portable light fixtures.''.
                            (ii) Conforming amendments.--Section 325(l) 
                        of the Energy Policy and Conservation Act (42 
                        U.S.C. 6295(l)) is amended by striking 
                        ``paragraph (19)'' each place it appears in 
                        paragraphs (1) and (2) and inserting 
                        ``paragraph (24)''.
                    (C) Test procedures.--Section 323(b) of the Energy 
                Policy and Conservation Act (42 U.S.C. 6293(b)) is 
                amended by adding at the end the following:
            ``(19) LED fixtures and led light engines.--Test procedures 
        for LED fixtures and LED light engines shall be based on 
        Illuminating Engineering Society of North America (IESNA) test 
        procedure LM-79, Approved Method for Electrical and Photometric 
        Testing of Solid-State Lighting Devices, and IESNA-approved 
        test procedure for testing LED light engines.''.
                    (D) Standards.--Section 325 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6295) is amended--
                            (i) by redesignating subsection (ii) as 
                        subsection (oo);
                            (ii) in subsection (oo)(2), as redesignated 
                        in clause (i) of this subparagraph, by striking 
                        ``(hh)'' each place it appears and inserting 
                        ``(mm)''; and
                            (iii) by inserting after subsection (hh) 
                        the following:
    ``(ii) Portable Light Fixtures.--
            ``(1) In general.--Subject to paragraphs (2) and (3), 
        portable light fixtures manufactured on or after January 1, 
        2012, shall meet 1 or more of the following requirements:
                    ``(A) Be a fluorescent light fixture that meets the 
                requirements of the Energy Star Program for Residential 
                Light Fixtures, Version 4.2.
                    ``(B) Be equipped with only 1 or more GU-24 line-
                voltage sockets, not be rated for use with incandescent 
                lamps of any type (as defined in ANSI standards), and 
                meet the requirements of version 4.2 of the Energy Star 
                program for residential light fixtures.
                    ``(C) Be an LED light fixture or a light fixture 
                with an LED light engine and comply with the following 
                minimum requirements:
                            ``(i) Minimum light output: 200 lumens 
                        (initial).
                            ``(ii) Minimum LED light engine efficacy: 
                        40 lumens/watt installed in fixtures that meet 
                        the minimum light fixture efficacy of 29 
                        lumens/watt or, alternatively, a minimum LED 
                        light engine efficacy of 60 lumens/watt for 
                        fixtures that do not meet the minimum light 
                        fixture efficacy of 29 lumens/watt.
                            ``(iii) All portable fixtures shall have a 
                        minimum LED light fixture efficacy of 29 
                        lumens/watt and a minimum LED light engine 
                        efficacy of 60 lumens/watt by January 1, 2016.
                            ``(iv) Color Correlated Temperature (CCT): 
                        2700K through 4000K.
                            ``(v) Minimum Color Rendering Index (CRI): 
                        75.
                            ``(vi) Power factor equal to or greater 
                        than 0.70.
                            ``(vii) Portable luminaries that have 
                        internal power supplies shall have zero standby 
                        power when the luminaire is turned off.
                            ``(viii) LED light sources shall deliver at 
                        least 70 percent of initial lumens for at least 
                        25,000 hours.
                    ``(D)(i) Be equipped with an ANSI-designated E12, 
                E17, or E26 screw-based socket and be prepackaged and 
                sold together with 1 screw-based compact fluorescent 
                lamp or screw-based LED lamp for each screw-based 
                socket on the portable light fixture.
                    ``(ii) The compact fluorescent or LED lamps 
                prepackaged with the light fixture shall be fully 
                compatible with any light fixture controls incorporated 
                into the light fixture (for example, light fixtures 
                with dimmers shall be packed with dimmable lamps).
                    ``(iii) Compact fluorescent lamps prepackaged with 
                light fixtures shall meet the requirements of the 
                Energy Star Program for CFLs Version 4.0.
                    ``(iv) Screw-based LED lamps shall comply with the 
                minimum requirements described in subparagraph (C).
                    ``(E) Be equipped with 1 or more single-ended, non-
                screw based halogen lamp sockets (line or low voltage), 
                a dimmer control or high-low control, and be rated for 
                a maximum of 100 watts.
            ``(2) Review.--
                    ``(A) Review.--The Secretary shall review the 
                criteria and standards established under paragraph (1) 
                to determine if revised standards are technologically 
                feasible and economically justified.
                    ``(B) Components.--The review shall include 
                consideration of--
                            ``(i) whether a separate compliance 
                        procedure is still needed for halogen fixtures 
                        described in subparagraph (E) and, if 
                        necessary, what an appropriate standard for 
                        halogen fixtures shall be;
                            ``(ii) whether the specific technical 
                        criteria described in subparagraphs (A), (C), 
                        and (D)(iii) should be modified; and
                            ``(iii) which fixtures should be exempted 
                        from the light fixture efficacy standard as of 
                        January 1, 2016, because the fixtures are 
                        primarily decorative in nature (as defined by 
                        the Secretary) and, even if exempted, are 
                        likely to be sold in limited quantities.
                    ``(C) Timing.--
                            ``(i) Determination.--Not later than 
                        January 1, 2014, the Secretary shall publish 
                        amended standards, or a determination that no 
                        amended standards are justified, under this 
                        subsection.
                            ``(ii) Standards.--Any standards under this 
                        paragraph shall take effect on January 1, 2016.
            ``(3) Art work light fixtures.--Art work light fixtures 
        manufactured on or after January 1, 2012, shall--
                    ``(A) comply with paragraph (1); or
                    ``(B)(i) contain only ANSI-designated E12 screw-
                based line-voltage sockets;
                    ``(ii) have not more than 3 sockets;
                    ``(iii) be controlled with an integral high/low 
                switch;
                    ``(iv) be rated for not more than 25 watts if 
                fitted with 1 socket; and
                    ``(v) be rated for not more than 15 watts per 
                socket if fitted with 2 or 3 sockets.
            ``(4) Exception from preemption.--Notwithstanding section 
        327, Federal preemption shall not apply to a regulation 
        concerning portable light fixtures adopted by the California 
        Energy Commission on or before January 1, 2014.''.
            (2) GU-24 base lamps.--
                    (A) Definitions.--Section 321 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6291) (as amended by 
                paragraph (1)(A)) is amended by adding at the end the 
                following:
            ``(72) GU-24.--The term `GU-24' means the designation of a 
        lamp socket, based on a coding system by the International 
        Electrotechnical Commission, under which--
                    ``(A) `G' indicates a holder and socket type with 2 
                or more projecting contacts, such as pins or posts;
                    ``(B) `U' distinguishes between lamp and holder 
                designs of similar type that are not interchangeable 
                due to electrical or mechanical requirements; and
                    ``(C) 24 indicates the distance in millimeters 
                between the electrical contact posts.
            ``(73) GU-24 adaptor.--
                    ``(A) In general.--The term `GU-24 Adaptor' means a 
                1-piece device, pig-tail, wiring harness, or other such 
                socket or base attachment that--
                            ``(i) connects to a GU-24 socket on 1 end 
                        and provides a different type of socket or 
                        connection on the other end; and
                            ``(ii) does not alter the voltage.
                    ``(B) Exclusion.--The term `GU-24 Adaptor' does not 
                include a fluorescent ballast with a GU-24 base.
            ``(74) GU-24 base lamp.--`GU-24 base lamp' means a light 
        bulb designed to fit in a GU-24 socket.''.
                    (B) Standards.--Section 325 of the Energy Policy 
                and Conservation Act (42 U.S.C. 6295) (as amended by 
                paragraph (1)(D)) is amended by inserting after 
                subsection (ii) the following:
    ``(jj) GU-24 Base Lamps.--
            ``(1) In general.--A GU-24 base lamp shall not be an 
        incandescent lamp as defined by ANSI.
            ``(2) GU-24 adaptors.--GU-24 adaptors shall not adapt a GU-
        24 socket to any other line voltage socket.''.
            (3) Standards for certain incandescent reflector lamps.--
        Section 325(i) of the Energy Policy and Conservation Act (42 
        U.S.C. 6295(i)), as amended by section 161(a)(12) of this Act, 
        is amended by adding at the end the following:
            ``(9) Certain incandescent reflector lamps.--(A) No later 
        than 12 months after enactment of this paragraph, the Secretary 
        shall publish a final rule establishing standards for 
        incandescent reflector lamp types described in paragraph 
        (1)(D). Such standards shall be effective on July 1, 2013.
            ``(B) Any rulemaking for incandescent reflector lamps 
        completed after enactment of this section shall consider 
        standards for all incandescent reflector lamps, inclusive of 
        those specified in paragraph (1)(C).
            ``(10) Reflector lamps.--No later than January 1, 2015, the 
        Secretary shall publish a final rule establishing and amending 
        standards for reflector lamps, including incandescent reflector 
        lamps. Such standards shall be effective no sooner than three 
        years after publication of the final rule. Such rulemaking 
        shall consider incandescent and nonincandescent technologies. 
        Such rulemaking shall consider a new metric other than lumens-
        per-watt based on the photometric distribution of light from 
        such lamps.''.

SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS.

    (a) Standards for Water Dispensers, Hot Food Holding Cabinets, and 
Portable Electric Spas.--
            (1) Definitions.--Section 321 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6291), as amended by section 211 of 
        this Act, is further amended by adding at the end the 
        following:
            ``(75) The term `water dispenser' means a factory-made 
        assembly that mechanically cools and heats potable water and 
        that dispenses the cooled or heated water by integral or remote 
        means.
            ``(76) The term `bottle-type water dispenser' means a 
        drinking water dispenser designed for dispensing both hot and 
        cold water that uses a removable bottle or container as the 
        source of potable water.
            ``(77) The term `commercial hot food holding cabinet' means 
        a heated, fully-enclosed compartment with one or more solid or 
        glass doors that is designed to maintain the temperature of hot 
        food that has been cooked in a separate appliance. Such term 
        does not include heated glass merchandizing cabinets, drawer 
        warmers, commercial hot food holding cabinets with interior 
        volumes of less than 8 cubic feet, or cook-and-hold appliances.
            ``(78) The term `portable electric spa' means a factory-
        built electric spa or hot tub, supplied with equipment for 
        heating and circulating water.''.
            (2) Coverage.--Section 322(a) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6292(a)), as amended by section 
        211(b)(1)(B) of this Act, is further amended by inserting after 
        paragraph (20) the following new paragraphs:
            ``(21) Bottle type water dispensers.
            ``(22) Commercial hot food holding cabinets.
            ``(23) Portable electric spas.''.
            (3) Test procedures.--Section 323(b) of the Energy Policy 
        and Conservation Act (42 U.S.C. 6293(b)), as amended by section 
        211(b)(1)(C) of this Act, is further amended by adding at the 
        end the following:
            ``(20) Bottle type water dispensers.--Test procedures for 
        bottle type water dispensers shall be based on `Energy Star 
        Program Requirements for Bottled Water Coolers version 1.1' 
        published by the Environmental Protection Agency. Units with an 
        integral, automatic timer shall not be tested using section 4D, 
        `Timer Usage,' of the test criteria.
            ``(21) Commercial hot food holding cabinets.--Test 
        procedures for commercial hot food holding cabinets shall be 
        based on the test procedures described in ANSI/ASTM F2140-01 
        (Test for idle energy rate-dry test). Interior volume shall be 
        based on the method shown in the Environmental Protection 
        Agency's `Energy Star Program Requirements for Commercial Hot 
        Food Holding Cabinets' as in effect on August 15, 2003.
            ``(22) Portable electric spas.--Test procedures for 
        portable electric spas shall be based on the test method for 
        portable electric spas contained in section 1604, title 20, 
        California Code of Regulations as amended on December 3, 2008. 
        When the American National Standards Institute publishes a test 
        procedure for portable electric spas, the Secretary shall 
        revise the Department of Energy's procedure.''.
            (4) Standards.--Section 325 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6295), as amended by section 211 of 
        this Act, is further amended by adding after subsection (jj) 
        the following:
    ``(kk) Bottle Type Water Dispensers.--Effective January 1, 2012, 
bottle-type water dispensers designed for dispensing both hot and cold 
water shall not have standby energy consumption greater than 1.2 
kilowatt-hours per day.
    ``(ll) Commercial Hot Food Holding Cabinets.--Effective January 1, 
2012, commercial hot food holding cabinets with interior volumes of 8 
cubic feet or greater shall have a maximum idle energy rate of 40 watts 
per cubic foot of interior volume.
    ``(mm) Portable Electric Spas.--Effective January 1, 2012, portable 
electric spas shall not have a normalized standby power greater than 
5(V\2/3\) Watts where V=the fill volume in gallons.
    ``(nn) Revisions.--The Secretary of Energy shall consider revisions 
to the standards in subsections (kk), (ll), and (mm) in accordance with 
subsection (o) and publish a final rule no later than January 1, 2013 
establishing such revised standards, or make a finding that no 
revisions are technically feasible and economically justified. Any such 
revised standards shall take effect January 1, 2016.''.
    (b) Commercial Furnace Efficiency Standards.--Section 342(a) of the 
Energy Policy and Conservation Act (42 U.S.C. 6312(a)) is amended by 
inserting after paragraph (10) the following new paragraph:
            ``(11) Warm air furnaces.--Each warm air furnace with an 
        input rating of 225,000 Btu per hour or more and manufactured 
        after January 1, 2011, shall meet the following standard 
        levels:
                    ``(A) Gas-fired units.--
                            ``(i) Minimum thermal efficiency of 80 
                        percent.
                            ``(ii) Include an interrupted or 
                        intermittent ignition device.
                            ``(iii) Have jacket losses not exceeding 
                        0.75 percent of the input rating.
                            ``(iv) Have either power venting or a flue 
                        damper.
                    ``(B) Oil-fired units.--
                            ``(i) Minimum thermal efficiency of 81 
                        percent.
                            ``(ii) Have jacket losses not exceeding 
                        0.75 percent of the input rating.
                            ``(iii) Have either power venting or a flue 
                        damper.''.

SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND PROCEDURES.

    (a) Definition of Energy Conservation Standard.--Section 321(6) of 
the Energy Policy and Conservation Act (42 U.S.C. 6291(6)) is amended 
to read as follows:
            ``(6) Energy conservation standard.--
                    ``(A) In general.--The term `energy conservation 
                standard' means 1 or more performance standards that--
                            ``(i) for covered products (excluding 
                        clothes washers, dishwashers, showerheads, 
                        faucets, water closets, and urinals), prescribe 
                        a minimum level of energy efficiency or a 
                        maximum quantity of energy use, determined in 
                        accordance with test procedures prescribed 
                        under section 323;
                            ``(ii) for showerheads, faucets, water 
                        closets, and urinals, prescribe a minimum level 
                        of water efficiency or a maximum quantity of 
                        water use, determined in accordance with test 
                        procedures prescribed under section 323; and
                            ``(iii) for clothes washers and 
                        dishwashers--
                                    ``(I) prescribe a minimum level of 
                                energy efficiency or a maximum quantity 
                                of energy use, determined in accordance 
                                with test procedures prescribed under 
                                section 323; and
                                    ``(II) may include a minimum level 
                                of water efficiency or a maximum 
                                quantity of water use, determined in 
                                accordance with those test procedures.
                    ``(B) Inclusions.--The term `energy conservation 
                standard' includes--
                            ``(i) 1 or more design requirements, if the 
                        requirements were established--
                                    ``(I) on or before the date of 
                                enactment of this subclause;
                                    ``(II) as part of a direct final 
                                rule under section 325(p)(4); or
                                    ``(III) as part of a final rule 
                                published on or after January 1, 2012, 
                                and
                            ``(ii) any other requirements that the 
                        Secretary may prescribe under section 325(r).
                    ``(C) Exclusion.--The term `energy conservation 
                standard' does not include a performance standard for a 
                component of a finished covered product, unless 
                regulation of the component is specifically authorized 
                or established pursuant to this title.''.
    (b) Adopting Consensus Test Procedures and Test Procedures in Use 
Elsewhere.--Section 323(b) of the Energy Policy and Conservation Act 
(42 U.S.C. 6293(b)), as amended by sections 211 and 212 of this Act, is 
further amended by adding the following new paragraph after paragraph 
(22):
            ``(23) Consensus and alternate test procedures.--
                    ``(A) Receipt of joint recommendation or alternate 
                testing procedure.--On receipt of--
                            ``(i) a statement that is submitted jointly 
                        by interested persons that are fairly 
                        representative of relevant points of view 
                        (including representatives of manufacturers of 
                        covered products, States, and efficiency 
                        advocates), as determined by the Secretary, and 
                        contains recommendations with respect to the 
                        testing procedure for a covered product; or
                            ``(ii) a submission of a testing procedure 
                        currently in use for a covered product by a 
                        State, nation, or group of nations--
                                    ``(I) if the Secretary determines 
                                that the recommended testing procedure 
                                contained in the statement or 
                                submission is in accordance with 
                                subsection (b)(3), the Secretary may 
                                issue a final rule that establishes an 
                                energy or water conservation testing 
                                procedure that is published 
                                simultaneously with a notice of 
                                proposed rulemaking that proposes a new 
                                or amended energy or water conservation 
                                testing procedure that is identical to 
                                the testing procedure established in 
                                the final rule to establish the 
                                recommended testing procedure (referred 
                                to in this paragraph as a `direct final 
                                rule'); or
                                    ``(II) if the Secretary determines 
                                that a direct final rule cannot be 
                                issued based on the statement or 
                                submission, the Secretary shall publish 
                                a notice of the determination, together 
                                with an explanation of the reasons for 
                                the determination.
                    ``(B) Public comment.--The Secretary shall solicit 
                public comment for a period of at least 110 days with 
                respect to each direct final rule issued by the 
                Secretary under subparagraph (A)(ii)(I).
                    ``(C) Withdrawal of direct final rules.--
                            ``(i) In general.--Not later than 120 days 
                        after the date on which a direct final rule 
                        issued under subparagraph (A)(ii)(I) is 
                        published in the Federal Register, the 
                        Secretary shall withdraw the direct final rule 
                        if--
                                    ``(I) the Secretary receives 1 or 
                                more adverse public comments relating 
                                to the direct final rule under 
                                subparagraph (B)or any alternative 
                                joint recommendation; and
                                    ``(II) based on the rulemaking 
                                record relating to the direct final 
                                rule, the Secretary determines that 
                                such adverse public comments or 
                                alternative joint recommendation may 
                                provide a reasonable basis for 
                                withdrawing the direct final rule under 
                                paragraph (3) or any other applicable 
                                law.
                            ``(ii) Action on withdrawal.--On withdrawal 
                        of a direct final rule under clause (i), the 
                        Secretary shall--
                                    ``(I) proceed with the notice of 
                                proposed rulemaking published 
                                simultaneously with the direct final 
                                rule as described in subparagraph 
                                (A)(ii)(I); and
                                    ``(II) publish in the Federal 
                                Register the reasons why the direct 
                                final rule was withdrawn.
                            ``(iii) Treatment of withdrawn direct final 
                        rules.--A direct final rule that is withdrawn 
                        under clause (i) shall not be considered to be 
                        a final rule for purposes of subsection (b).
                    ``(D) Effect of paragraph.--Nothing in this 
                paragraph authorizes the Secretary to issue a direct 
                final rule based solely on receipt of more than 1 
                statement containing recommended test procedures 
                relating to the direct final rule.''.
    (c) Updating Television Test Methods.--Section 323(b) of the Energy 
Policy and Conservation Act (42 U.S.C. 6293(b)), as amended by sections 
211 and 212 of this Act, and subsection (b) of this section, is further 
amended by adding at the end the following new paragraph:
            ``(24) Televisions.--(A) On the date of enactment of this 
        paragraph, Appendix H to Subpart B of Part 430 of the United 
        States Code of Federal Regulations, `Uniform Test Method for 
        Measuring the Energy Consumption of Television Sets', is 
        repealed.
            ``(B) No later than 12 months after the date of enactment 
        of this paragraph the Secretary shall publish in the Federal 
        Register a final rule prescribing a new test method for 
        televisions.''.
    (d) Criteria for Prescribing New or Amended Standards.--(1) Section 
325(o)(2)(B)(i) of the Energy Policy and Conservation Act (42 U.S.C. 
6295(o)(2)(B)(i)) is amended as follows:
            (A) By striking ``and'' at the end of subclause (VI).
            (B) By redesignating subclause (VII) as subclause (XI).
            (C) By inserting the following new subclauses after 
        subclause (VI):
            ``(VII) the estimated value of the carbon dioxide and other 
        emission reductions that will be achieved by virtue of the 
        higher energy efficiency of the covered products resulting from 
        the imposition of the standard;
            ``(VIII) the estimated impact of standards for a particular 
        product on average consumer energy prices;
            ``(IX) the increased energy efficiency that may be 
        attributable to the installation of Smart Grid technologies or 
        capabilities in the covered products, if applicable in the 
        determination of the Secretary;
            ``(X) the availability in the United States or in other 
        nations of examples or prototypes of covered products that 
        achieve significantly higher efficiency standards for energy or 
        for water; and''.
    (2) Section 325(o)(2)(B)(iii) of such Act is amended as follows:
            (A) By striking ``three'' and inserting ``5''.
            (B) By inserting after the first sentence the following 
        ``For products with an average expected useful life of less 
        than 5 years, such rebuttable presumption shall be determined 
        utilizing 75 percent of the product's average expected useful 
        life as a multiplier instead of 5.''.
            (C) By striking the last sentence and inserting the 
        following: ``Such a presumption may be rebutted only if the 
        Secretary finds, based on clear, convincing, and reliable 
        evidence, that--
            ``(I) such standard level would cause serious and 
        unavoidable hardship to the average consumer of the product, or 
        to manufacturers supplying a significant portion of the market 
        for the product, that substantially outweighs the standard 
        level's benefits;
            ``(II) the standard and implementing regulations cannot be 
        designed to avoid or mitigate the hardship identified under 
        subclause (I), through the adoption of regional standards 
        consistent with paragraph (6) of this subsection, or other 
        reasonable means consistent with this part;
            ``(III) the same or substantially similar hardship would 
        not occur under a standard adopted in the absence of the 
        presumption, but that otherwise meets the requirements of this 
        section; and
            ``(IV) the hardship cannot be avoided or mitigated pursuant 
        the procedures specified in section 504 of the Department of 
        Energy Organization Act (42 U.S.C. 7194).
A determination by the Secretary that the criteria triggering such 
presumption are not met, or that the criterion for rebutting the 
presumption are met shall not be taken into consideration in the 
Secretary's determination of whether a standard is economically 
justified.''.
    (e) Obtaining Appliance Information From Manufacturers.--Section 
326(d) of the Energy Policy and Conservation Act (42 U.S.C. 6295(d)) is 
amended to read as follows:
    ``(d) Information Requirements.--(1) For purposes of carrying out 
this part, the Secretary shall publish proposed regulations not later 
than one year after the date of enactment of the American Clean Energy 
and Security Act of 2009, and after receiving public comment, final 
regulations not later than 18 months from such date of enactment under 
this part or other provision of law administered by the Secretary, 
which shall require each manufacturer of a covered product to submit 
information or reports to the Secretary on an annual basis in a form 
adopted by the Secretary. Such reports shall include information or 
data with respect to--
            ``(A) the manufacturers' compliance with all requirements 
        applicable pursuant to this part;
            ``(B) the economic impact of any proposed energy 
        conservation standard;
            ``(C) the manufacturers' annual shipments of each class or 
        category of covered products, organized, to the maximum extent 
        practicable, by--
                    ``(i) energy efficiency, energy use, and, if 
                applicable, water use;
                    ``(ii) the presence or absence of such efficiency 
                related or energy consuming operational characteristics 
                or components as the Secretary determines are relevant 
                for the purposes of carrying out this part; and
                    ``(iii) the State or regional location of sale, for 
                covered products for which the Secretary may adopt 
                regional standards; and
            ``(D) such other categories of information as the Secretary 
        deems relevant to carry out this part, including such other 
        information as may be necessary to establish and revise test 
        procedures, labeling rules, and energy conservation standards 
        and to insure compliance with the requirements of this part.
    ``(2) In adopting regulations under this subsection, the Secretary 
shall consider existing public sources of information, including 
nationally recognized certification programs of trade associations.
    ``(3) The Secretary shall exercise authority under this section in 
a manner designed to minimize unnecessary burdens on manufacturers of 
covered products.
    ``(4) To the extent that they do not conflict with the duties of 
the Secretary in carrying out this part, the provisions of section 
11(d) of the Energy Supply and Environmental Coordination Act of 1974 
(15 U.S.C. 796(d)) shall apply with respect to information obtained 
under this subsection to the same extent and in the same manner as they 
apply with respect to other energy information obtained under such 
section.''.
    (f) State Waiver.--Section 327(c) of the Energy Policy and 
Conservation Act (42 U.S.C. 6297(c)), as amended by section 161(a)(19) 
of this Act, is further amended by adding at the end the following:
            ``(12) is a regulation concerning standards for hot food 
        holding cabinets, drinking water dispensers and portable 
        electric spas adopted by the California Energy Commission on or 
        before January 1, 2013.''.
    (g) Waiver of Federal Preemption.--Paragraph (1) of section 327(d) 
of the Energy Policy and Conservation Act (42 U.S.C. 6297(d)) is 
amended as follows:
            (1) In subparagraph (A) by striking ``State regulation'' 
        each place it appears and inserting ``State statute or 
        regulation''.
            (2) In subparagraph (B) by adding at the end the following 
        new sentence: ``In making such a finding, the Secretary may not 
        reject a petition for failure of the petitioning State or river 
        basin commission to produce confidential information maintained 
        by any manufacturer or distributor, or group or association of 
        manufacturers or distributors, and which the petitioning party 
        does not have the legal right to obtain.''.
            (3) In clause (ii) of subparagraph (C) by striking 
        ``costs'' each place it appears and inserting ``estimated 
        costs''.
            (4) In subparagraph (C) by striking ``within the context of 
        the State's energy plan and forecast, and,''.
    (h) Inclusion of Carbon Output on Appliance ``Energyguide'' 
Labels.--(1) Section 324(a)(2) of the Energy Policy and Conservation 
Act (42 U.S.C. 6294(a)(2)) is amended by adding the following at the 
end:
    ``(I)(i) Not later than 90 days after the date of enactment of this 
subparagraph, the Commission shall initiate a rulemaking to implement 
the additional labeling requirements specified in subsection (c)(1)(C) 
of this section with an effective date for the revised labeling 
requirement not later than 12 months from issuance of the final rule.
    ``(ii) Not later than 24 months after the date of enactment of this 
subparagraph, the Commission shall complete the rulemaking initiated 
under clause (i).
    ``(iii) Not later than 90 days after issuance of the final rule as 
provided in this subparagraph, the Secretary shall issue calculation 
methods required to effectuate the labeling requirements specified in 
subsection (c)(1)(C) of this section.''.
    (2) Section 324(c)(1) of the Energy Policy and Conservation Act (42 
U.S.C. 6294(c)(1)) is amended--
            (A) by striking ``and'' at the end of subparagraph (A);
            (B) by striking the period at the end of subparagraph (B) 
        and inserting a semicolon; and
            (C) by adding at the end the following new subparagraphs:
            ``(C) for products or groups of products providing a 
        comparable function (including the group of products comprising 
        the heating function of heat pumps and furnaces) among covered 
        products listed in paragraphs (3), (4), (5), (8), (9), (10), 
        and (11) of section 322(a) of this part, and others designated 
        by the Secretary, the estimated total annual atmospheric carbon 
        dioxide emissions (or their equivalent in other greenhouse 
        gases) associated with, or caused by, the product, calculated 
        utilizing--
                    ``(i) national average energy use for the product 
                including energy consumed at the point of end use based 
                on test procedures developed under section 323 of this 
                part;
                    ``(ii) national average energy consumed or lost in 
                the production, generation, transportation, storage, 
                and distribution of energy to the point of end use; and
                    ``(iii) any direct emissions of greenhouse gases 
                from the product during normal use;
                    ``(D) in determining the national average energy 
                consumption and total annual atmospheric carbon dioxide 
                emissions, the Secretary shall utilize Federal 
                Government sources, including the Energy Information 
                Administration Annual Energy Review, the Environmental 
                Protection Agency eGRID data base, Environmental 
                Protection Agency AP-42 Emission Factors as amended, 
                and other sources determined to be appropriate by the 
                Secretary; and
                    ``(E) information presenting, for each product (or 
                group of products providing the comparable function) 
                identified in section (c)(1)(C) of this section, the 
                estimated annual carbon dioxide emissions calculated 
                within the range of emissions calculated for all models 
                of the product or group according to its function, 
                including those models consuming fuels and those models 
                not consuming fuels.''.
    (i) Permitting States to Seek Injunctive Enforcement.--(1) Section 
334 of the Energy Policy and Conservation Act (42 U.S.C. 6304) is 
amended to read as follows:

``SEC. 334. JURISDICTION AND VENUE.

    ``(a) Jurisdiction.--The United States district courts shall have 
jurisdiction to restrain--
            ``(1) any violation of section 332; and
            ``(2) any person from distributing in commerce any covered 
        product which does not comply with an applicable rule under 
        section 324 or 325.
    ``(b) Authority.--Any action referred to in subsection (a) shall be 
brought by the Commission or by the attorney general of a State in the 
name of the State, except that--
            ``(1) any such action to restrain any violation of section 
        332(a)(3) which relates to requirements prescribed by the 
        Secretary or any violation of section 332(a)(4) which relates 
        to request of the Secretary under section 326(b)(2) shall be 
        brought by the Secretary; and
            ``(2) any violation of section 332(a)(5) or 332(a)(7) shall 
        be brought by the Secretary or by the attorney general of a 
        State in the name of the State.
    ``(c) Venue and Service of Process.--Any such action may be brought 
in the United States district court for a district wherein any act, 
omission, or transaction constituting the violation occurred, or in 
such court of the district wherein the defendant is found or transacts 
business. In any action under this section, process may be served on a 
defendant in any other district in which the defendant resides or may 
be found.''.
    (2) The item relating to section 334 in the table of contents for 
such Act is amended to read as follows:
``Sec. 334. Jurisdiction and venue.''.
    (j) Treatment of Appliances Within Building Codes.--(1) Section 
327(f)(3) of the Energy Policy and Conservation Act (42 U.S.C. 
6297(f)(3)) is amended by striking subparagraphs (B) through (G) and 
inserting the following:
            ``(B) The code meets at least one of the following 
        requirements:
                    ``(i) The code does not require that the covered 
                product have an energy efficiency exceeding--
                            ``(I) the applicable energy conservation 
                        standard established in or prescribed under 
                        section 325;
                            ``(II) the level required by a regulation 
                        of that State for which the Secretary has 
                        issued a rule granting a waiver under 
                        subsection (d) of this section; or
                            ``(III) the required level established in 
                        the International Energy Conservation Code or 
                        in a standard of the American Society of 
                        Heating, Refrigerating and Air-Conditioning 
                        Engineers, or by the Secretary pursuant to 
                        section 304 of the Energy Conservation and 
                        Production Act.
                    ``(ii) If the code uses one or more baseline 
                building designs against which all submitted building 
                designs are to be evaluated and such baseline building 
                designs contain a covered product subject to an energy 
                conservation standard established in or prescribed 
                under section 325, the baseline building designs are 
                based on an efficiency level for such covered product 
                which meets but does not exceed one of the levels 
                specified in clause (i).
                    ``(iii) If the code sets forth one or more optional 
                combinations of items which meet the energy consumption 
                or conservation objective, in at least one combination 
                that the State has found to be reasonably achievable 
                using commercially available technologies the 
                efficiency of the covered product meets but does not 
                exceed one of the levels specified in clause (i).
            ``(C) The credit to the energy consumption or conservation 
        objective allowed by the code for installing covered products 
        having energy efficiencies exceeding one of the levels 
        specified in subparagraph (B)(i) is on a one-for-one equivalent 
        energy use or equivalent energy cost basis, taking into account 
        the typical lifetime of the product.
            ``(D) The energy consumption or conservation objective is 
        specified in terms of an estimated total consumption of energy 
        (which may be calculated from energy loss- or gain-based codes) 
        utilizing an equivalent amount of energy (which may be 
        specified in units of energy or its equivalent cost) and 
        equivalent lifetimes.
            ``(E) The estimated energy use of any covered product 
        permitted or required in the code, or used in calculating the 
        objective, is determined using the applicable test procedures 
        prescribed under section 323, except that the State may permit 
        the estimated energy use calculation to be adjusted to reflect 
        the conditions of the areas where the code is being applied if 
        such adjustment is based on the use of the applicable test 
        procedures prescribed under section 323 or other technically 
        accurate documented procedure.''.
            (2) Section 327(f)(4)(B) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6297(f)(4)(B)) is amended to read 
        as follows:
    ``(B) If a building code requires the installation of covered 
products with efficiencies exceeding the levels and requirements 
specified in paragraph (3)(B), such requirement of the building code 
shall not be applicable unless the Secretary has granted a waiver for 
such requirement under subsection (d) of this section.''.

SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PROGRAM.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Energy, in consultation with the 
Administrator, shall establish a program to be known as the ``Best-in-
Class Appliances Deployment Program'' to--
            (1) provide bonus payments to retailers or distributors 
        under subsection (c) for sales of best-in-class high-efficiency 
        household appliance models, high-efficiency installed building 
        equipment, and high-efficiency consumer electronics, with the 
        goal of reducing life-cycle costs for consumers, encouraging 
        innovation, and maximizing energy savings and public benefit;
            (2) provide bounties under subsection (d) to retailers and 
        manufacturers for the replacement, retirement, and recycling of 
        old, inefficient, and environmentally harmful products; and
            (3) provide premium awards under subsection (e) to 
        manufacturers for developing and producing new Superefficient 
        Best-in-Class Products.
    (b) Designation of Best-in-Class Product Models.--
            (1) In general.--The Secretary of Energy shall designate 
        product models of appliances, equipment, or electronics as 
        Best-in-Class Product models. The Secretary shall publicly 
        announce the Best-in-Class Product models designated under this 
        subsection. The Secretary shall define product classes broadly 
        and, except as provided in paragraph (2), shall designate as 
        Best-in-Class Product models no more than the most efficient 10 
        percent of the commercially available product models in a class 
        that demonstrate, as a group, a distinctly greater energy 
        efficiency than the average energy efficiency of that class of 
        appliances, equipment, or electronics. In designating models, 
        the Secretary shall--
                    (A) identify commercially available models in the 
                relevant class of products;
                    (B) identify the subgroup of those models that 
                share the distinctly higher energy-efficiency 
                characteristics that warrant designation as best-in-
                class; and
                    (C) add other models in that class to the list of 
                Best-in-Class Product models as they demonstrate their 
                ability to meet the higher-efficiency characteristics 
                on which the designation was made.
            (2) Percentage exception.--If there are fewer than 10 
        product models in a class of products, the Secretary may 
        designate one or more of such models as Best-in-Class Products.
            (3) Review of best-in-class standards.--The Secretary shall 
        review annually the product-specific criteria for designating, 
        and the product models that qualify as, Best-in-Class Products 
        and, after notice and a 30-day comment period, make upwards 
        adjustments in the efficiency criteria as necessary to maintain 
        an appropriate ratio of such product models to the total number 
        of product models in the product class.
            (4) Smart grid energy efficiency savings.--The Secretary 
        shall include energy efficiency savings achieved by a 
        commercially available product having smart grid capability in 
        determining the efficiency level of a product for purposes of a 
        Best-In-Class Product designation pursuant to this subsection. 
        In measuring energy efficiency savings achieved by smart grid 
        capability, the Secretary shall use a metric that--
                    (A) is based on the time-differentiated value and 
                amount of energy consumption;
                    (B) accounts for the capability of the product to 
                respond to a smart grid in which the physical 
                capability of the product to save or delay energy 
                because of a smart grid feature is weighted by the 
                likelihood that the feature will be used;
                    (C) is based on the value of a unit of electric or 
                gas consumption as a function of time of day and 
                season; and
                    (D) includes a test method by which the 
                manufacturer shall determine the energy efficiency of 
                smart grid capable products.
    (c) Bonuses for Sales of Best-in-Class Products.--
            (1) In general.--The Secretary of Energy shall make bonus 
        payments to retailers or, as provided in paragraph (5)(B), 
        distributors for the sale of Best-in-Class Products.
            (2) Bonus program.--The Secretary shall--
                    (A) publicly announce the availability and amount 
                of the bonus to be paid for each sale of a Best-in-
                Class Product of a model designated under subsection 
                (b); and
                    (B) make bonus payments in at least that amount for 
                each Best-in-Class Product of that model sold during 
                the 3-year period beginning on the date the model is 
                designated under subsection (b).
            (3) Upgrade of best-in-class product eligibility.--In 
        conducting a review under subsection (b)(3), the Secretary 
        shall--
                    (A) consider designating as a Best-in-Class Product 
                model a Superefficient Best-in-Class Product model that 
                has been designated pursuant to subsection (e);
                    (B) announce any change in the bonus payment as 
                necessary to increase the market share of Best-in-Class 
                Product models;
                    (C) list models that will be eligible for bonuses 
                in the new amount; and
                    (D) continue paying bonus payments at the original 
                level, for the sale of any models that previously 
                qualified as Best-in-Class Products but do not qualify 
                at the new level, for the remainder of the 3-year 
                period announced with the original designation.
            (4) Size of individual bonus payments.--(A) The size of 
        each bonus payment under this subsection shall be the product 
        of--
                    (i) an amount determined by the Secretary; and
                    (ii) the difference in energy consumption between 
                the Best-in-Class Product and the average product in 
                the product class.
            (B) The Secretary shall determine the amount under 
        subparagraph (A)(i) for each product type, in consultation with 
        State and utility efficiency program administrators as well as 
        the Administrator, based on estimates of the amount of bonus 
        payment that would provide significant incentive to increase 
        the market share of Best-in-Class Products.
            (5) Eligible bonus recipient.--(A) The Secretary shall 
        ensure that not more than 1 bonus payment is provided under 
        this subsection for each Best-in-Class Product.
            (B) The Secretary may make distributors eligible to receive 
        bonus payments under this subsection for sales that are not to 
        the final end-user, to the extent that the Secretary determines 
        that for a particular product category distributors are well 
        situated to increase sales of Best-in-Class Products.
    (d) Bounties for Replacement, Retirement, and Recycling of Existing 
Low-Efficiency Products.--
            (1) In general.--The Secretary of Energy shall make bounty 
        payments to--
                    (A) retailers for the replacement, retirement, and 
                recycling of older operating low-efficiency products 
                that might otherwise continue in operation; and
                    (B) manufacturers of Superefficient Best-in-Class 
                Products for the retirement and recycling of older 
                operating low-efficiency products that perform the same 
                function and which might otherwise continue in 
                operation.
            (2) Bounties.--Bounties shall be payable--
                    (A) to a retailer upon documentation that the sale 
                of a Best-in-Class Product was accompanied by the 
                replacement, retirement, and recycling of--
                            (i) an inefficient but still-functioning 
                        product; or
                            (ii) a nonfunctioning product containing a 
                        refrigerant, by the consumer to whom the Best-
                        in-Class Product was sold; and
                    (B) to a manufacturer upon documentation of the 
                retirement and recycling of--
                            (i) an inefficient but still-functioning 
                        product from a consumer to whom a 
                        Superefficient Best-in-Class Product was 
                        delivered; or
                            (ii) a nonfunctioning product containing a 
                        refrigerant from a consumer to whom a 
                        Superefficient Best-in-Class Product was 
                        delivered.
            (3) Amount.--
                    (A) Functioning products.--The bounty payment 
                payable under this subsection for a product described 
                in paragraphs (2)(A)(i) and (2)(B)(i) shall be based on 
                the difference between the estimated energy use of the 
                product replaced and the energy use of an average new 
                product in the product class, over the estimated 
                remaining lifetime of the product that was replaced.
                    (B) Nonfunctioning products containing 
                refrigerants.--The bounty payment payable under this 
                subsection for a product described in paragraphs 
                (2)(A)(ii) and (2)(B)(ii) shall be in the amount that 
                the Secretary of Energy, in consultation with the 
                Administrator, determines is sufficient to promote the 
                recycling of such products, up to the amount of bounty 
                for a comparable product described in paragraphs (2)(A) 
                and (2)(B).
            (4) Retirement.--The Secretary shall ensure that no product 
        for which a bounty is paid under this subsection is returned to 
        active service, but that it is instead destroyed, and recycled 
        to the extent feasible.
            (5) Recycling appliances containing refrigerants.--
        Exclusively for the purpose of implementing the bounty payment 
        program for products containing a refrigerant under this 
        section, the Administrator shall establish standards for 
        environmentally responsible methods of recycling and disposal 
        of refrigerant-containing appliances that, at a minimum, meet 
        the requirements set by the Responsible Appliance Disposal 
        (RAD) Program for refrigerant disposal. The Secretary shall 
        ensure that such standards are met before a bounty payment is 
        made under this subsection for a product containing a 
        refrigerant. Nothing in this section shall be interpreted to 
        alter the requirements of section 608 of the Clean Air Act or 
        to relieve any person from complying with those requirements.
    (e) Premium Awards for Development and Production of Superefficient 
Best-in-Class Products.--
            (1) In general.--(A) The Secretary of Energy shall provide 
        premium awards to manufacturers for the development and 
        production of Superefficient Best-in-Class Products. The 
        Secretary shall set and periodically revise standards for 
        eligibility of products for designation as a Superefficient 
        Best-in-Class Product.
            (B) The Secretary may establish a standard for a 
        Superefficient Best-in-Class Product even if no product meeting 
        that standard exists, if the Secretary has reasonable grounds 
        to conclude that a mass-producible product could be made to 
        meet that standard.
            (C) The Secretary may also establish a Superefficient Best-
        in-Class Product standard that is met by one or more existing 
        Best-in-Class Product models, if those product models have 
        distinct energy efficiency attributes and performance 
        characteristics that make them significantly better than other 
        product models qualifying as best-in-class. The Secretary may 
        not designate as Superefficient Best-in-Class Products under 
        this subparagraph models that represent more than 10 percent of 
        the currently qualifying Best-in-Class Product models. This 
        subparagraph shall not apply to products designated pursuant to 
        paragraph (4)(A).
            (D) In making its finding on the efficiency level a product 
        can achieve for purposes of a Superefficient Best-In-Class 
        Product designation pursuant to this paragraph, the Secretary 
        shall include energy efficiency savings that would be achieved 
        by a product as a result of smart grid capability when a 
        product having such capability can be produced and sold 
        commercially to mass market consumers. In measuring energy 
        efficiency savings achieved by smart grid capability, the 
        Secretary shall use a metric that-
                    (i) is based on the time-differentiated value and 
                amount of energy consumption;
                    (ii) accounts for the capability of the product to 
                respond to a smart grid in which the physical 
                capability of the product to save or delay energy 
                because of a smart grid feature is weighted by the 
                likelihood that the feature will be used;
                    (iii) is based on the value of a unit of electric 
                or gas consumption as a function of time of day and 
                season; and
                    (iv) includes a test method by which the 
                manufacturer shall determine the energy efficiency of 
                smart grid capable products.
            (2) Premium awards.--(A) The premium award payment provided 
        to a manufacturer under this subsection shall be in addition to 
        any bonus payments made under subsection (c).
            (B) The amount of the premium award paid per unit of 
        Superefficient Best-in-Class Products sold to retailers or 
        distributors shall, except as provided by subparagraph (F), be 
        the product of--
                    (i) an amount determined by the Secretary; and
                    (ii) the difference in energy consumption between 
                the Superefficient Best-in-Class Product and the 
                average product in the product class.
            (C) The Secretary shall determine the amount under 
        subparagraph (B)(i) for each product type, in consultation with 
        State and utility efficiency program administrators as well as 
        the Administrator, based on consideration of the present value 
        to the Nation of the energy (and water or other resources or 
        inputs) saved over the useful life of the product. The 
        Secretary may also take into consideration the methods used to 
        increase sales of qualifying products in determining such 
        amount.
            (D) The Secretary may adjust the value described in 
        subparagraph (C) upward or downward as appropriate, including 
        based on the effect of the premium awards on the sales of 
        products in different classes that may be affected by the 
        program under this subsection.
            (E) Premium award payments shall be applied to sales of any 
        Superefficient Best-in-Class Product for the first 3 years 
        after designation as a Superefficient Best-in-Class Product.
            (F) For years 2011 through 2013, the Secretary shall make 
        bonus payments to manufacturers of the products designated in 
        paragraph (4)(A) for each product produced in the following 
        amounts:
                    (i) $75 for each dishwasher.
                    (ii) $250 for each clothes washer.
                    (iii) $200 for each refrigerator or refrigerator-
                freezer.
                    (iv) $250 for each clothes dryer.
                    (v) $200 for each cooking product.
                    (vi) $300 for each water heater.
            (3) Coordination of incentives.--No product for which 
        Federal tax credit is received under section 45M of the 
        Internal Revenue Code of 1986 shall be eligible to receive 
        premium award payments pursuant to this subsection.
            (4) Designations.--
                    (A) Initial designations.--Notwithstanding any 
                other provisions of this section, the products the 
                Secretary shall designate as a Superefficient Best-In-
                Class Product include, but are not limited to, the 
                following products manufactured in 2011 through 2013:
                            (i) A dishwasher, clothes washer, 
                        refrigerator, or refrigerator-freezer that 
                        meets the highest efficiency performance 
                        standards in its product category as provided 
                        in Section 305(b) of the Emergency Economic 
                        Stabilization Act of 2008 and has the smart 
                        grid capability specified in paragraph (5).
                            (ii) A water heater that meets an 
                        efficiency standard that is the same or 
                        equivalent to the standard provided in Section 
                        1333 of the Energy Policy Act of 2005 and has 
                        the smart grid capability specified in 
                        paragraph (5).
                            (iii) A clothes dryer or cooking product 
                        that the Secretary determines meets the 
                        standards specified in subsection (j)(3), which 
                        the Secretary shall promulgate no later than 
                        one year after the date of enactment, and has 
                        the smart grid capability specified in 
                        paragraph (5).
                    (B) Extension of initial designations.--
                            (i) General.--The Secretary shall in 2013 
                        extend the Superefficient Best-In-Class Product 
                        designation of each product specified in 
                        subparagraph (A)(i) through (iii) through 2017, 
                        provided that for each product designation 
                        extended--
                                    (I) the extension will result in 
                                significant energy efficiency savings;
                                    (II) the product meets the 
                                Superefficient Best-In-Class Product 
                                criteria specified in paragraph (1);
                                    (III) the eligibility standards of 
                                the product include the smart grid 
                                capability specified in paragraph (5); 
                                and
                                    (IV) the Secretary makes 
                                appropriate revisions to the 
                                eligibility standards of the product as 
                                provided by paragraph (1).
                            (ii) Awards.--If a Superefficient Best-In-
                        Class Product designation for a product is 
                        extended pursuant to this subparagraph, the 
                        premium award for the product shall be 
                        determined in accordance with paragraph (2).
            (5) Smart grid capability.--
                    (A) Until the Secretary promulgates criteria under 
                subparagraph (B), the term ``smart grid capability'' 
                means capability of receiving and interpreting time-of-
                use pricing and peak-load-shed signals from a utility 
                and--
                            (i) in the case of a cooking product, 
                        reducing a minimum of 20 percent during peak 
                        demand as measured by the tested average 
                        wattage over the course of a typical operating 
                        cycle of the product; or
                            (ii) in the case of a clothes washer, a 
                        refrigerator, a dishwasher, a dryer and a water 
                        heater, reducing a minimum of 50 percent during 
                        peak demand as measured by the tested average 
                        wattage over the course of a typical operating 
                        cycle of the product, provided that the typical 
                        operating cycle of a refrigerator and a water 
                        heater shall be a 24-hour period.
                    (B) After completion of the analysis required under 
                section 142(b) of this Act, the Secretary shall 
                expeditiously promulgate, after notice and a 30-day 
                public comment period, criteria for what constitutes 
                ``smart grid capability.''
    (f) Reporting.--The Secretary of Energy shall require, as a 
condition of receiving a bonus, bounty, or premium award under this 
section, that a report containing the following documentation be 
provided:
            (1) For retailers and distributors, the number of units 
        sold within each product type, and model-specific wholesale 
        purchase prices and retail sale prices, on a monthly basis.
            (2) For manufacturers, model-specific energy efficiency and 
        consumption data.
            (3) For manufacturers, on an immediate basis, information 
        concerning any product design or function changes that affect 
        the energy consumption of the unit.
            (4) The methods used to increase the sales of qualifying 
        products.
    (g) Monitoring and Verification Protocols.--The Secretary of Energy 
shall establish monitoring and verification protocols for energy 
consumption tests for each product model and for sales of energy-
efficient models. The Secretary shall estimate actual savings of energy 
from the use of Smart Grid capability in appliances for which premium 
award payments are made pursuant to subsection (e) as a function of 
utility and consumer readiness to utilize such capability.
    (h) Disclosure.--The Secretary of Energy may require that 
manufacturers, retailers and distributors disclose publicly and to 
consumers their participation in the program under this section.
    (i) Cost-Effectiveness Requirement.--
            (1) Requirement.--The Secretary of Energy shall make cost-
        effectiveness a top priority in designing the program under, 
        and administering, this section, except that the cost-
        effectiveness of providing premium awards to manufacturers 
        under subsection (e), in aggregate, may be lower by this 
        measure than that of the bonuses and bounties to retailers and 
        distributors under subsections (c) and (d).
            (2) Definitions.--In this subsection:
                    (A) Cost-effectiveness.--The term ``cost-
                effectiveness'' means a measure of aggregate savings in 
                the cost of energy over the lifetime of a product in 
                relation to the cost to the Secretary of the bonuses, 
                bounties, and premium awards provided under this 
                section for a product.
                    (B) Savings.--The term ``savings'' means the 
                cumulative megawatt-hours of electricity or million 
                British thermal units of other fuels saved by a product 
                during the projected useful life of the product, in 
                comparison to projected energy consumption of the 
                average product in the same class, taking into 
                consideration the impact of any documented measures to 
                replace, retire, and recycle low-efficiency products at 
                the time of purchase of highly-efficient substitutes.
    (j) Definitions.--In this section--
            (1) the term ``distributor'' mean an individual, 
        organization, or company that sells products in multiple lots 
        and not directly to end-users;
            (2) the term ``retailer'' means an individual, 
        organization, or company that sells products directly to end-
        users;
            (3) the term ``manufacturer'' means an individual, 
        organization, or company that transforms raw materials into 
        mass-producible finished goods; and
            (4) the term ``Superefficient Best-in-Class Product'' means 
        a product that--
                    (A) can be mass produced; and
                    (B) achieves the highest level of efficiency that 
                the Secretary of Energy finds can, given the current 
                state of technology, be produced and sold commercially 
                to mass-market consumers.
    (k) Authorization of Appropriations.--There are authorized to be 
appropriated $600,000,000 for each of the fiscal years 2011 through 
2013 to the Secretary of Energy for purposes of this section, and such 
sums as may be necessary for subsequent fiscal years. Of funds 
appropriated, not more than 10 percent for any fiscal year may be 
expended on program administration, and not less than 40 percent of any 
funds appropriated during fiscal years 2011 through 2013 shall be for 
purposes of subsection (e).

SEC. 215. WATERSENSE.

    (a) In General.--There is established within the Environmental 
Protection Agency a WaterSense program to identify and promote water 
efficient products, buildings and landscapes, and services in order--
            (1) to reduce water use;
            (2) to reduce the strain on water, wastewater, and 
        stormwater infrastructure;
            (3) to conserve energy used to pump, heat, transport, and 
        treat water; and
            (4) to preserve water resources for future generations,
through voluntary labeling of, or other forms of communications about, 
products, buildings and landscapes, and services that meet the highest 
water efficiency and performance standards.
    (b) Duties.--The Administrator shall--
            (1) promote WaterSense labeled products, buildings and 
        landscapes, and services in the market place as the preferred 
        technologies and services for--
                    (A) reducing water use; and
                    (B) ensuring product and service performance;
            (2) work to enhance public awareness of the WaterSense 
        label through public outreach, education, and other means;
            (3) establish and maintain performance standards so that 
        products, buildings and landscapes, and services labeled with 
        the WaterSense label perform as well or better than their less 
        efficient counterparts;
            (4) publicize the need for proper installation and 
        maintenance of WaterSense products by a licensed, and where 
        certification guidelines exist, WaterSense-certified 
        professional to ensure optimal performance;
            (5) preserve the integrity of the WaterSense label;
            (6) regularly review and, when appropriate, update 
        WaterSense criteria for categories of products, buildings and 
        landscapes, and services, at least once every four years;
            (7) to the extent practical, regularly estimate and make 
        available to the public the production and relative market 
        shares of WaterSense labeled products, buildings and 
        landscapes, and services, at least annually;
            (8) to the extent practical, regularly estimate and make 
        available to the public the water and energy savings 
        attributable to the use of WaterSense labeled products, 
        buildings and landscapes, and services, at least annually;
            (9) solicit comments from interested parties and the public 
        prior to establishing or revising a WaterSense category, 
        specification, installation criterion, or other criterion (or 
        prior to effective dates for any such category, specification, 
        installation criterion, or other criterion);
            (10) provide reasonable notice to interested parties and 
        the public of any changes (including effective dates), on the 
        adoption of a new or revised category, specification, 
        installation criterion, or other criterion, along with--
                    (A) an explanation of changes; and
                    (B) as appropriate, responses to comments submitted 
                by interested parties;
            (11) provide appropriate lead time (as determined by the 
        Administrator) prior to the applicable effective date for a new 
        or significant revision to a category, specification, 
        installation criterion, or other criterion, taking into account 
        the timing requirements of the manufacturing, marketing, 
        training, and distribution process for the specific product, 
        building and landscape, or service category addressed; and
            (12) identify and, where appropriate, implement other 
        voluntary approaches in commercial, institutional, residential, 
        municipal, and industrial sectors to encourage reuse and 
        recycling technologies, improve water efficiency, or lower 
        water use while meeting, where applicable, the performance 
        standards established under paragraph (3).
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated $7,500,000 for fiscal year 2010, $10,000,000 for fiscal 
year 2011, $20,000,000 for fiscal year 2012, and $50,000,000 for fiscal 
year 2013 and each year thereafter, adjusted for inflation, to carry 
out this section.

SEC. 216. FEDERAL PROCUREMENT OF WATER EFFICIENT PRODUCTS.

    (a) Definitions.--In this section:
            (1) Agency.--The term ``agency'' has the meaning given that 
        term in section 7902(a) of title 5, United States Code.
            (2) Watersense product or service.--The term ``WaterSense 
        product or service'' means a product or service that is rated 
        for water efficiency under the WaterSense program.
            (3) Watersense program.--The term ``WaterSense program'' 
        means the program established by section 215 of this Act.
            (4) FEMP designated product.--The term ``FEMP designated 
        product'' means a product that is designated under the Federal 
        Energy Management Program of the Department of Energy as being 
        among the highest 25 percent of equivalent products for 
        efficiency.
            (5) Product and service.--The terms ``product'' and 
        ``service'' do not include any water consuming product or 
        service designed or procured for combat or combat-related 
        missions. The terms also exclude products or services already 
        covered by the Federal procurement regulations established 
        under section 553 of the National Energy Conservation Policy 
        Act (42 U.S.C. 8259b).
    (b) Procurement of Water Efficient Products.--
            (1) Requirement.--To meet the requirements of an agency for 
        a water consuming product or service, the head of the agency 
        shall, except as provided in paragraph (2), procure--
                    (A) a WaterSense product or service; or
                    (B) a FEMP designated product.
        A WaterSense plumbing product should preferably, when possible, 
        be installed by a licensed and, when WaterSense certification 
        guidelines exist, WaterSense-certified plumber or mechanical 
        contractor, and a WaterSense irrigation system should 
        preferably, when possible, be installed, maintained, and 
        audited by a WaterSense-certified irrigation professional to 
        ensure optimal performance.
            (2) Exceptions.--The head of an agency is not required to 
        procure a WaterSense product or service or FEMP designated 
        product under paragraph (1) if the head of the agency finds in 
        writing that--
                    (A) a WaterSense product or service or FEMP 
                designated product is not cost-effective over the life 
                of the product, taking energy and water cost savings 
                into account; or
                    (B) no WaterSense product or service or FEMP 
                designated product is reasonably available that meets 
                the functional requirements of the agency.
            (3) Procurement planning.--The head of an agency shall 
        incorporate into the specifications for all procurements 
        involving water consuming products and systems, including guide 
        specifications, project specifications, and construction, 
        renovation, and services contracts that include provision of 
        water consuming products and systems, and into the factors for 
        the evaluation of offers received for the procurement, criteria 
        used for rating WaterSense products and services and FEMP 
        designated products. The head of an agency shall consider, to 
        the maximum extent practicable, additional measures for 
        reducing agency water consumption, including water reuse 
        technologies, leak detection and repair, and use of waterless 
        products that perform similar functions to existing water-
        consuming products.
    (c) Regulations.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of Energy, working in coordination 
with the Administrator, shall issue guidelines to carry out this 
section.

SEC. 217. WATER EFFICIENT PRODUCT REBATE PROGRAMS.

    (a) Definitions.--In this section:
            (1) Eligible state.--The term ``eligible State'' means a 
        State that meets the requirements of subsection (b).
            (2) Residential water efficient product or service.--The 
        term ``residential water efficient product or service'' means a 
        product or service for a residence or its landscape that is 
        rated for water efficiency and performance--
                    (A) by the WaterSense program, where a WaterSense 
                specification does not exist; or
                    (B) by a State program and approved by the 
                Administrator.
        Categories of water efficient products and services may include 
        faucets, irrigation technologies and services, point-of-use 
        water treatment devices, reuse and recycling technologies, 
        toilets, and showerheads.
            (3) State program.--The term ``State program'' means a 
        State program for administering rebates or vouchers for 
        consumer purchase of water efficient products and services as 
        described in subsection (b)(1).
            (4) Watersense program.--The term ``WaterSense program'' 
        means the program established by section 215 of this Act.
    (b) Eligible States.--A State shall be eligible to receive an 
allocation under subsection (c) if the State--
            (1) establishes (or has established) a State program to 
        provide rebates or vouchers to residential consumers for the 
        purchase of residential water efficient products or services to 
        replace used products of the same type;
            (2) submits an application for the allocation at such time, 
        in such form, and containing such information as the 
        Administrator may require; and
            (3) provides assurances satisfactory to the Administrator 
        that the State will use the allocation to supplement, but not 
        supplant, funds made available to carry out the State program.
    (c) Amount of Allocations.--
            (1) In general.--Subject to paragraph (2), for each fiscal 
        year, the Administrator shall allocate to each eligible State 
        to carry out subsection (d) an amount equal to the product 
        obtained by multiplying the amount made available under 
        subsection (g) for the fiscal year by the ratio that the 
        population of the State in the most recent calendar year for 
        which data are available bears to the total population of all 
        eligible States in that calendar year.
            (2) Minimum allocations.--For each fiscal year, the amounts 
        allocated under this subsection shall be adjusted 
        proportionately so that no eligible State is allocated a sum 
        that is less than an amount determined by the Administrator.
    (d) Use of Allocated Funds.--Funds allocated to a State under 
subsection (c) may be used to pay up to 50 percent of the cost of 
establishing and carrying out a State program.
    (e) Fixture Recycling.--States are encouraged to promote or 
implement fixture recycling programs to manage the disposal of older 
fixtures replaced due to the rebate program under this section.
    (f) Issuance of Rebates.--Rebates or vouchers may be provided to 
residential consumers that meet the requirements of the State program. 
The State may issue all rebates or vouchers directly to residential 
consumers or, with approval of the Administrator, delegate some or all 
rebate and voucher administration to other organizations including, but 
not limited to, local governments, municipal water authorities, and 
water utilities. The amount of a rebate or voucher shall be determined 
by the State, taking into consideration--
            (1) the amount of the allocation to the State under 
        subsection (c);
            (2) the amount of any Federal or State tax incentive 
        available for the purchase of the residential water efficient 
        product or service;
            (3) the amount necessary to change consumer behavior to 
        purchase water efficient products and services; and
            (4) the consumer expenditures for onsite preparation, 
        assembly, and original installation of the product.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator to carry out this section $50,000,000 
for each of the fiscal years 2010 and 2011, $75,000,000 for fiscal year 
2012, $100,000,000 for fiscal year 2013, and $150,000,000 for fiscal 
year 2014 and each year thereafter, adjusted for inflation.

SEC. 218. CERTIFIED STOVES PROGRAM.

    (a) Definitions.--In this section:
            (1) Agency.--The term ``Agency'' means the Environmental 
        Protection Agency.
            (2) Wood stove or pellet stove.--The term ``wood stove or 
        pellet stove'' means a wood stove, pellet stove, or fireplace 
        insert that uses wood or pellets for fuel.
            (3) Certified stove.--The term ``certified stove'' means a 
        wood stove or pellet stove that meets the standards of 
        performance for new residential wood heaters under subpart AAA 
        of part 60 of subchapter C of chapter I of title 40, Code of 
        Federal Regulations (or successor regulations), as certified by 
        the Administrator. Pellet stoves and fireplace inserts using 
        pellets for fuel that are exempt from testing by the 
        Administrator but meet the same standards of performance as 
        wood stoves are considered certified for the purposes of this 
        section.
            (4) Eligible entity.--The term ``eligible entity'' means--
                    (A) a State, a local government, or a federally 
                recognized Indian tribe;
                    (B) Alaskan Native villages or regional or village 
                corporations (as defined in, or established under, the 
                Alaskan Native Claims Settlement Act (43 U.S.C. 1601 et 
                seq.)); and
                    (C) a nonprofit organization or institution that--
                            (i) represents or provides pollution 
                        reduction or educational services relating to 
                        wood smoke minimization to persons, 
                        organizations, or communities; or
                            (ii) has, as its principal purpose, the 
                        promotion of air quality or energy efficiency.
    (b) Establishment.--The Administrator shall establish and carry out 
a program to assist in the replacement of wood stoves or pellet stoves 
that do not meet the standards of performance referred to in subsection 
(a)(4) by--
            (1) requiring that each wood stove or pellet stove sold in 
        the United States on and after the date of enactment of this 
        Act meet the standards of performance referred to in subsection 
        (a)(4);
            (2) requiring that no wood stove or pellet stove replaced 
        under this program is sold or returned to active service, but 
        that it is instead destroyed and recycled to the maximum extent 
        feasible;
            (3) providing funds to an eligible entity to replace a wood 
        stove or pellet stove that does not meet the standards of 
        performance in subsection (a)(4) with a certified stove, 
        including funds to pay for--
                    (A) installation of a replacement certified stove; 
                and
                    (B) necessary replacement of or repairs to 
                ventilation, flues, chimneys, or other relevant items 
                necessary for safe installation of a replacement 
                certified stove;
            (4) in addition to any funds that may be appropriated for 
        the program under this subsection, using existing Federal, 
        State, and local programs and incentives, to the greatest 
        extent practicable;
            (5) prioritizing the replacement of wood stoves or pellet 
        stoves manufactured before July 1, 1990; and
            (6) carrying out such other activities as the Administrator 
        determines appropriate to facilitate the replacement of wood 
        stoves or pellet stoves that do not meet the standards of 
        performance referred to in subsection (a)(3).
    (c) Regulations.--The Administrator may promulgate such regulations 
as are necessary to carry out the program established under subsection 
(b).
    (d) Funding.--
            (1) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out the program under this section 
        $20,000,000 for the period of fiscal years 2010 through 2014.
            (2) Designated use.--Of amounts appropriated pursuant to 
        this subsection--
                    (A) 25 percent shall be designated for use to carry 
                out the program under this section on lands held in 
                trust for the benefit of a federally recognized Indian 
                tribe;
                    (B) 3 percent shall be designated for use to carry 
                out the program under this section in Alaskan Native 
                villages or regional or village corporations (as 
                defined in, or established under, the Alaskan Native 
                Claims Settlement Act (43 U.S.C. 1601 et seq.)); and
                    (C) 72 percent shall be designated for use to carry 
                out the program under this section nationwide.
            (3) Regulatory programs.--
                    (A) In general.--No grant or loan provided under 
                this section shall be used to fund the costs of 
                emissions reductions that are mandated under Federal, 
                State, or local law.
                    (B) Mandated.--For purposes of subparagraph (A), 
                voluntary or elective emission reduction measures shall 
                not be considered ``mandated'', regardless of whether 
                the reductions are included in the implementation plan 
                of a State.
    (e) EPA Authority to Accept Wood Stove or Pellet Stove Replacement 
Supplemental Environmental Projects.--
            (1) In general.--The Administrator may accept 
        (notwithstanding sections 3302 and 1301 of title 31, United 
        States Code) wood stove or pellet stove replacement 
        Supplemental Environmental Projects if such projects, as part 
        of a settlement of any alleged violation of environmental law--
                    (A) protect human health or the environment;
                    (B) are related to the underlying alleged 
                violation;
                    (C) do not constitute activities that the defendant 
                would otherwise be legally required to perform; and
                    (D) do not provide funds for the staff of the 
                Agency or for contractors to carry out the Agency's 
                internal operations.
            (2) Certification.--In any settlement agreement regarding 
        an alleged violation of environmental law in which a defendant 
        agrees to perform a wood stove or pellet stove replacement 
        Supplemental Environmental Project, the Administrator shall 
        require the defendant to include in the settlement documents a 
        certification under penalty of law that the defendant would 
        have agreed to perform a comparably valued, alternative project 
        other than a wood stove or pellet stove replacement 
        Supplemental Environmental Project if the Administrator were 
        precluded by law from accepting a wood stove or pellet stove 
        replacement Supplemental Environmental Project. A failure by 
        the Administrator to include this language in such a settlement 
        agreement shall not create a cause of action against the United 
        States under the Clean Air Act or any other law or create a 
        basis for overturning a settlement agreement entered into by 
        the United States.

SEC. 219. ENERGY STAR STANDARDS.

    (a) Energy Star.--Section 324A(c) of the Energy Policy and 
Conservation Act is amended--
            (1) in paragraph (6)(B), by striking ``and'' after the 
        semicolon at the end;
            (2) in paragraph (7), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(8) not later than 18 months after the date of enactment 
        of this paragraph, establish and implement a rating system for 
        products identified as Energy Star products pursuant to this 
        section to provide consumers with the most helpful information 
        on the relative energy efficiency of those products, unless the 
        Administrator and the Secretary communicate to Congress that 
        establishing such a system would diminish the value of the 
        Energy Star brand to consumers;
            ``(9)(A) review the Energy Star product criteria for the 10 
        product models in each product category with the greatest 
        energy consumption at least once every 3 years; and
            ``(B) based on the review, update and publish the Energy 
        Star product criteria for each such category, as necessary; and
            ``(10) require periodic verification of compliance with the 
        Energy Star product criteria by products identified as Energy 
        Star products pursuant to this section, including--
                    ``(A) purchase and testing of products from the 
                market; or
                    ``(B) other appropriate testing and compliance 
                approaches.''.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the amendments made by this section 
$5,000,000 for fiscal year 2010 and for each fiscal year thereafter.

                 Subtitle C--Transportation Efficiency

SEC. 221. EMISSIONS STANDARDS.

    Title VIII of the Clean Air Act, as added by section 331 of this 
Act, is amended by inserting after part A the following new part:

                        ``PART B--MOBILE SOURCES

``SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR MOBILE SOURCES.

    ``(a) New Motor Vehicles and New Motor Vehicle Engines.--(1) 
Pursuant to section 202(a)(1), by December 31, 2010, the Administrator 
shall promulgate standards applicable to emissions of greenhouse gases 
from new heavy-duty motor vehicles or new heavy-duty motor vehicle 
engines, excluding such motor vehicles covered by the Tier II standards 
(as established by the Administrator as of the date of the enactment of 
this section). The Administrator may revise these standards from time 
to time.
    ``(2) Regulations issued under section 202(a)(1) applicable to 
emissions of greenhouse gases from new heavy-duty motor vehicles or new 
heavy-duty motor vehicle engines, excluding such motor vehicles covered 
by the Tier II standards (as established by the Administrator as of the 
date of the enactment of this section), shall contain standards that 
reflect the greatest degree of emissions reduction achievable through 
the application of technology which the Administrator determines will 
be available for the model year to which such standards apply, giving 
appropriate consideration to cost, energy, and safety factors 
associated with the application of such technology. Any such 
regulations shall take effect after such period as the Administrator 
finds necessary to permit the development and application of the 
requisite technology, and, at a minimum, shall apply for a period no 
less than 3 model years beginning no earlier than the model year 
commencing 4 years after such regulations are promulgated.
    ``(3) Regulations issued under section 202(a)(1) applicable to 
emissions of greenhouse gases from new heavy-duty motor vehicles or new 
heavy-duty motor vehicle engines, excluding such motor vehicles covered 
by the Tier II standards (as established by the Administrator as of the 
date of the enactment of this section), shall supersede and satisfy any 
and all of the rulemaking and compliance requirements of section 
32902(k) of title 49, United States Code.
    ``(4) Other than as specifically set forth in paragraph (3) of this 
subsection, nothing in this section shall affect or otherwise increase 
or diminish the authority of the Secretary of Transportation to adopt 
regulations to improve the overall fuel efficiency of the commercial 
goods movement system.
    ``(b) Nonroad Vehicles and Engines.--(1) Pursuant to section 
213(a)(4) and (5), the Administrator shall identify those classes or 
categories of new nonroad vehicles or engines, or combinations of such 
classes or categories, that, in the judgment of the Administrator, both 
contribute significantly to the total emissions of greenhouse gases 
from nonroad engines and vehicles, and provide the greatest potential 
for significant and cost-effective reductions in emissions of 
greenhouse gases. The Administrator shall promulgate standards 
applicable to emissions of greenhouse gases from these new nonroad 
engines or vehicles by December 31, 2012. The Administrator shall also 
promulgate standards applicable to emissions of greenhouse gases for 
such other classes and categories of new nonroad vehicles and engines 
as the Administrator determines appropriate and in the timeframe the 
Administrator determines appropriate. The Administrator shall base such 
determination, among other factors, on the relative contribution of 
greenhouse gas emissions, and the costs for achieving reductions, from 
such classes or categories of new nonroad engines and vehicles. The 
Administrator may revise these standards from time to time.
    ``(2) Standards under section 213(a)(4) and (5) applicable to 
emissions of greenhouse gases from those classes or categories of new 
nonroad engines or vehicles identified in the first sentence of 
paragraph (1) of this subsection, shall achieve the greatest degree of 
emissions reduction achievable based on the application of technology 
which the Administrator determines will be available at the time such 
standards take effect, taking into consideration cost, energy, and 
safety factors associated with the application of such technology. Any 
such regulations shall take effect at the earliest possible date after 
such period as the Administrator finds necessary to permit the 
development and application of the requisite technology, giving 
appropriate consideration to the cost of compliance within such period, 
the applicable compliance dates for other standards, and other 
appropriate factors, including the period of time appropriate for the 
transfer of applicable technology from other applications, including 
motor vehicles, and the period of time in which previously promulgated 
regulations have been in effect.
    ``(3) For purposes of this section and standards under section 
213(a)(4) or (5) applicable to emissions of greenhouse gases, the term 
`nonroad engines and vehicles' shall include non-internal combustion 
engines and the vehicles these engines power (such as electric engines 
and electric vehicles), for those non-internal combustion engines and 
vehicles which would be in the same category and have the same uses as 
nonroad engines and vehicles that are powered by internal combustion 
engines.
    ``(c) Averaging, Banking, and Trading of Emissions Credits.--In 
establishing standards applicable to emissions of greenhouse gases 
pursuant to this section and sections 202(a), 213(a)(4) and (5), and 
231(a), the Administrator may establish provisions for averaging, 
banking, and trading of greenhouse gas emissions credits within or 
across classes or categories of motor vehicles and motor vehicle 
engines, nonroad vehicles and engines (including marine vessels), and 
aircraft and aircraft engines, to the extent the Administrator 
determines appropriate and considering the factors appropriate in 
setting standards under those sections. Such provisions may include 
reasonable and appropriate provisions concerning generation, banking, 
trading, duration, and use of credits.
    ``(d) Reports.--The Administrator shall, from time to time, submit 
a report to Congress that projects the amount of greenhouse gas 
emissions from the transportation sector, including transportation 
fuels, for the years 2030 and 2050, based on the standards adopted 
under this section.
    ``(e) Greenhouse Gases.--Notwithstanding the provisions of section 
711, hydrofluorocarbons shall be considered a greenhouse gas for 
purposes of this section.''.

SEC. 222. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION 
              EFFICIENCY.

    (a) Environmental Protection Agency.--Title VIII of the Clean Air 
Act, as added by section 331 of this Act, is further amended by 
inserting after part C the following new part:

                   ``PART D--TRANSPORTATION EMISSIONS

``SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION 
              EFFICIENCY.

    ``(a) In General.--The Administrator, in consultation with the 
Secretary of Transportation, shall promulgate, and update from time to 
time, regulations to establish national transportation-related 
greenhouse gas emissions reduction goals, standardized models and 
methodologies for use in developing surface transportation-related 
greenhouse gas emissions reduction targets pursuant to sections 134 and 
135 of title 23 of the United States Code and methods for collection of 
data on transportation-related greenhouse gas emissions. Such goals 
shall be commensurate with the emissions reductions goals established 
under the American Clean Energy and Security Act of 2009. In 
establishing such goals, models, and methodologies, the Administrator 
shall consult with States and metropolitan planning organizations and 
may utilize existing models and methodologies.
    ``(b) Timing.--The Administrator shall--
            ``(1) publish proposed regulations under subsection (a) not 
        later than 12 months after the date of enactment of this 
        section; and
            ``(2) promulgate final regulations under subsection (a) not 
        later than 18 months after the date of enactment of this 
        section.
    ``(c) Assessment.--At least every 6 years after promulgating final 
regulations under subsection (a), the Administrator, jointly with the 
Secretary of Transportation, shall assess current and projected 
progress in reducing national transportation-related greenhouse gas 
emissions. The assessment shall examine the contributions to emissions 
reductions attributable to improvements in vehicle efficiency, 
greenhouse gas performance of transportation fuels, increased 
efficiency in utilizing transportation systems and the effects of local 
and State planning.''.
    (b) Metropolitan Planning Organizations.--Section 134 of title 23 
of the United States Code is amended as follows:
            (1) In subsection (a)(1)--
                    (A) by striking ``minimizing'' and inserting 
                ``reducing''; and
                    (B) by inserting ``, reliance on oil, impacts on 
                the environment, transportation-related greenhouse gas 
                emissions'' after ``consumption''.
            (2) In subsection (h)(1)(E)--
                    (A) by inserting ``sustainability and livability, 
                reduce surface transportation-related greenhouse gas 
                emissions and reliance on oil, adapt to the effects of 
                climate change,'' after ``energy conservation'';
                    (B) by inserting ``and public health'' after 
                ``quality of life''; and
                    (C) by inserting ``, including housing and land use 
                patterns'' after ``development patterns''.
            (3) In subsection (i)(4)(A) by inserting ``air quality, 
        public health, housing, transportation,'' after 
        ``conservation,''.
            (4) In subsection (k) by inserting at the end the following 
        new paragraph:
            ``(6) Emissions reduction process.--
                    ``(A) In general.--Within a metropolitan planning 
                area serving a transportation management area, the 
                transportation planning process under this section 
                shall address transportation-related greenhouse gas 
                emissions by including emission reduction targets and 
                strategies.
                    ``(B) Establishment of emissions reduction targets 
                and strategies.--
                            ``(i) In general.--Not later than one year 
                        after the promulgation of the final regulations 
                        required under section 841 of the Clean Air 
                        Act, each metropolitan planning organization 
                        shall develop surface transportation-related 
                        greenhouse gas emission reduction targets, as 
                        well as strategies to meet such targets, as 
                        part of the transportation planning process 
                        under this section. If more than one 
                        metropolitan planning organization has been 
                        designated within a metropolitan planning area 
                        serving a transportation management area, each 
                        such metropolitan planning organization shall 
                        work cooperatively with other such organization 
                        to develop the surface transportation-related 
                        greenhouse gas emission reduction targets 
                        required under this subparagraph.
                            ``(ii) Minimum requirements.--Each 
                        metropolitan planning organization that 
                        develops targets and strategies required under 
                        clause (i) shall demonstrate progress in 
                        stabilizing and reducing transportation-related 
                        greenhouse gas emissions in each metropolitan 
                        planning area serving a surface transportation 
                        management area. The targets and strategies 
                        shall, at a minimum--
                                    ``(I) be based on the models and 
                                methodologies established in the final 
                                regulations required under section 841 
                                of the Clean Air Act;
                                    ``(II) address sources of surface 
                                transportation-related greenhouse gas 
                                emissions and contribute to achievement 
                                of the national transportation-related 
                                greenhouse gas emissions reduction 
                                goals;
                                    ``(III) include efforts to increase 
                                public transportation ridership; and
                                    ``(IV) include efforts to increase 
                                walking, bicycling, and other forms of 
                                nonmotorized transportation.
                    ``(C) Public notice.--Each metropolitan planning 
                organization shall make its emission reduction targets 
                and strategies, and an analysis of the anticipated 
                effects thereof, available to the public through its 
                Web site.
                    ``(D) Enforcement.--If the Secretary finds that a 
                metropolitan planning organization has failed to 
                develop, submit or publish its emission reduction 
                targets and strategies, the Secretary shall not certify 
                that the requirements of this section are met with 
                respect to the metropolitan planning process of such 
                organization.''.
    (c) States.--Section 135 of title 23 of the United States Code is 
amended as follows:
            (1) In subsection (d)(1)(E)--
                    (A) by inserting ``sustainability and livability, 
                reduce surface transportation-related greenhouse gas 
                emissions and reliance on oil, adapt to the effects of 
                climate change,'' after ``energy conservation'';
                    (B) by inserting ``and public health'' after 
                ``quality of life''; and
                    (C) by inserting ``, including housing and land use 
                patterns'' after ``development patterns''.
            (2) In subsection (f)(2)(D)(i) by inserting ``air quality, 
        public health, housing, transportation,'' after 
        ``conservation,''.
            (3) In subsection (f) by inserting at the end the following 
        new paragraph:
            ``(9) Emissions reduction process.--
                    ``(A) In general.--Within a State, the 
                transportation planning process under this section 
                shall address transportation-related greenhouse gas 
                emissions by including emission reduction targets and 
                strategies.
                    ``(B) Establishment of emissions reduction targets 
                and strategies.--
                            ``(i) In general.--Not later than one year 
                        after the promulgation of the final regulations 
                        required under section 841 of the Clean Air 
                        Act, each State shall develop surface 
                        transportation-related greenhouse gas emission 
                        reduction targets, as well as strategies to 
                        meet such targets, as part of the 
                        transportation planning process under this 
                        section.
                            ``(ii) Minimum requirements.--Each State 
                        that develops targets and strategies required 
                        under clause (i) shall demonstrate progress in 
                        stabilizing and reducing transportation-related 
                        greenhouse gas emissions in such State. The 
                        targets and strategies shall, at a minimum,
                                    ``(I) be based on the models and 
                                methodologies established in the final 
                                regulations required under section 841 
                                of the Clean Air Act;
                                    ``(II) address sources of surface 
                                transportation-related greenhouse gas 
                                emissions and contribute to achievement 
                                of the national transportation-related 
                                greenhouse gas emissions reduction 
                                goals;
                                    ``(III) include efforts to increase 
                                public transportation ridership; and
                                    ``(IV) include efforts to increase 
                                walking, bicycling, and other forms of 
                                nonmotorized transportation.
                    ``(D) Public notice.--Each State shall make its 
                emission reduction targets and strategies, and an 
                analysis of the anticipated effects thereof, available 
                to the public through its Web site.
                    ``(E) Enforcement.--If the Secretary finds that a 
                State has failed to develop, submit or publish its 
                emission reduction targets and strategies, the 
                Secretary shall not certify that the requirements of 
                this section are met with respect to the statewide 
                planning process of such State.''.
    (d) Department of Transportation.--The Secretary of Transportation 
shall establish appropriate requirements, including performance 
measures, to ensure that transportation plans developed under sections 
134 and 135 of title 23 of the United States Code sufficiently meet the 
requirements of this section, including achieving progress towards 
national transportation-related greenhouse gas emissions reduction 
goals.

SEC. 223. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

    Part B of title VIII of the Clean Air Act, as added by section 221 
of this Act is amended by adding after section 821 the following 
section:

``SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

    ``(a) In General.--There is established within the Environmental 
Protection Agency a SmartWay Transport Program to quantify, 
demonstrate, and promote the benefits of technologies, products, fuels, 
and operational strategies that reduce petroleum consumption, air 
pollution, and greenhouse gas emissions from the mobile source sector.
    ``(b) General Duties.--Under the program established under this 
section, the Administrator shall carry out each of the following:
            ``(1) Development of measurement protocols to evaluate the 
        energy consumption and greenhouse gas impacts from technologies 
        and strategies in the mobile source sector, including those for 
        passenger transport and goods movement.
            ``(2) Development of qualifying thresholds for certifying, 
        verifying, or designating energy-efficient, low-greenhouse gas 
        SmartWay technologies and strategies for each mode of passenger 
        transportation and goods movement.
            ``(3) Development of partnership and recognition programs 
        to promote best practices and drive demand for energy-
        efficient, low-greenhouse gas transportation performance.
            ``(4) Promotion of the availability of, and encouragement 
        of the adoption of, SmartWay certified or verified technologies 
        and strategies, and publication of the availability of 
        financial incentives, such as assistance from loan programs and 
        other Federal and State incentives.
    ``(c) Smartway Transport Freight Partnership.--The Administrator 
shall establish a SmartWay Transport Freight Partnership program with 
shippers and carriers of goods to promote energy-efficient, low-
greenhouse gas transportation. In carrying out such partnership, the 
Administrator shall undertake each of the following:
            ``(1) Certification of the energy and greenhouse gas 
        performance of participating freight carriers, including those 
        operating rail, trucking, marine, and other goods movement 
        operations.
            ``(2) Publication of a comprehensive energy and greenhouse 
        gas performance index of freight modes (including rail, 
        trucking, marine, and other modes of transporting goods) and 
        individual freight companies so that shippers can choose to 
        deliver their goods more efficiently.
            ``(3) Development of tools for--
                    ``(A) carriers to calculate their energy and 
                greenhouse gas performance; and
                    ``(B) shippers to calculate the energy and 
                greenhouse gas impacts of moving their products and to 
                evaluate the relative impacts from transporting their 
                goods by different modes and corporate carriers.
            ``(4) Provision of recognition opportunities for 
        participating shipper and carrier companies demonstrating 
        advanced practices and achieving superior levels of greenhouse 
        gas performance.
    ``(d) Improving Freight Greenhouse Gas Performance Databases.--The 
Administrator shall, in coordination with other appropriate agencies, 
define and collect data on the physical and operational characteristics 
of the Nation's truck population, with special emphasis on data related 
to energy efficiency and greenhouse gas performance to inform the 
performance index published under subsection (c)(2) of this section, 
and other means of goods transport as necessary, at least every 5 
years.
    ``(e) Establishment of Financing Program.--The Administrator shall 
establish a SmartWay Financing Program to competitively award funding 
to eligible entities identified by the Administrator in accordance with 
the program requirements in subsection (g).
    ``(f) Purpose.--Under the SmartWay Financing Program, eligible 
entities shall--
            ``(1) use funds awarded by the Administrator to provide 
        flexible loan and lease terms that increase approval rates or 
        lower the costs of loans and leases in accordance with guidance 
        developed by the Administrator; and
            ``(2) make such loans and leases available to public and 
        private entities for the purpose of adopting low-greenhouse gas 
        technologies or strategies for the mobile source sector that 
        are designated by the Administrator.
    ``(g) Program Requirements.--The Administrator shall determine 
program design elements and requirements, including--
            ``(1) the type of financial mechanism with which to award 
        funding, in the form of grants or contracts;
            ``(2) the designation of eligible entities to receive 
        funding, including State, tribal, and local governments, 
        regional organizations comprised of governmental units, 
        nonprofit organizations, or for-profit companies;
            ``(3) criteria for evaluating applications from eligible 
        entities, including anticipated--
                    ``(A) cost-effectiveness of loan or lease program 
                on a metric-ton-of-greenhouse gas-saved-per-dollar 
                basis;
                    ``(B) ability to promote the loan or lease program 
                and associated technologies and strategies to the 
                target audience; and
            ``(4) reporting requirements for entities that receive 
        awards, including--
                    ``(A) actual cost-effectiveness and greenhouse gas 
                savings from the loan or lease program based on a 
                methodology designated by the Administrator;
                    ``(B) the total number of applications and number 
                of approved applications; and
                    ``(C) terms granted to loan and lease recipients 
                compared to prevailing market practices.
    ``(h) Authorization of Appropriations.--Such sums as necessary are 
authorized to be appropriated to the Administrator to carry out this 
section.''.

SEC. 224. STATE VEHICLE FLEETS.

    Section 507(o) of the Energy Policy Act of 1992 (42 U.S.C. 13257) 
is amended by adding the following new paragraph at the end thereof:
    ``(3) The Secretary shall revise the rules under this subsection 
with respect to the types of alternative fueled vehicles required for 
compliance with this subsection to ensure those rules are consistent 
with any guidance issued pursuant to section 303 of this Act.''.

           Subtitle D--Industrial Energy Efficiency Programs

SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STANDARDS.

    The Secretary of Energy shall continue to support the development 
of the American National Standards Institute (ANSI) voluntary 
industrial plant energy efficiency certification program, pending 
International Standards Organization (ISO) consensus standard 50001, 
and other related ANSI/ISO standards. In addition, the Department shall 
undertake complementary activities through the Department of Energy's 
Industry Technologies Program that support the voluntary implementation 
of such standards by manufacturing firms. There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
these activities. The Secretary shall report to Congress on the status 
of standards development and plans for further standards development 
pursuant to this section by not later than 18 months after the date of 
enactment of this Act, and shall prepare a second such report 18 months 
thereafter.

SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOVERY AWARD PROGRAM.

    (a) Electric and Thermal Waste Energy Recovery Awards.--The 
Secretary of Energy shall establish a program to make monetary awards 
to the owners and operators of new and existing electric energy 
generation facilities or thermal energy production facilities using 
fossil or nuclear fuel, to encourage them to use innovative means of 
recovering any thermal energy that is a potentially useful byproduct of 
electric power generation or other processes to--
            (1) generate additional electric energy; or
            (2) make sales of thermal energy not used for electric 
        generation, in the form of steam, hot water, chilled water, or 
        desiccant regeneration, or for other commercially valid 
        purposes.
    (b) Amount of Awards.--
            (1) Eligibility.--Awards shall be made under subsection (a) 
        only for the use of innovative means that achieve net energy 
        efficiency at the facility concerned significantly greater than 
        the current standard technology in use at similar facilities.
            (2) Amount.--The amount of an award made under subsection 
        (a) shall equal an amount up to the value of 25 percent of the 
        energy projected to be recovered or generated during the first 
        5 years of operation of the facility using the innovative 
        energy recovery method, or such lesser amount that the 
        Secretary determines to be the minimum amount that can cost-
        effectively stimulate such innovation.
            (3) Limitation.--No person may receive an award under this 
        section if a grant under the waste energy incentive grant 
        program under section 373 of the Energy Policy and Conservation 
        Act (42 U.S.C. 6343) is made for the same energy savings 
        resulting from the same innovative method.
    (c) Regulatory Status.--The Secretary of Energy shall--
            (1) assist State regulatory commissions to identify and 
        make changes in State regulatory programs for electric 
        utilities to provide appropriate regulatory status for thermal 
        energy byproduct businesses of regulated electric utilities to 
        encourage those utilities to enter businesses making the sales 
        referred to in subsection (a)(2); and
            (2) encourage self-regulated utilities to enter businesses 
        making the sales referred to in subsection (a)(2).
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy such sums as are necessary for 
the purposes of this section.

SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOVERY FINANCIAL 
              INCENTIVES.

    Section 373(e) of the Energy Policy and Conservation Act (42 U.S.C. 
6343(e)) is amended--
            (1) by striking ``that qualifies for'' and inserting ``who 
        elects to claim''; and
            (2) by inserting ``from that project'' after ``for waste 
        heat recovery''.

SEC. 244. MOTOR MARKET ASSESSMENT AND COMMERCIAL AWARENESS PROGRAM.

    (a) Findings.--Congress finds that--
            (1) electric motor systems account for about half of the 
        electricity used in the United States;
            (2) electric motor energy use is determined by both the 
        efficiency of the motor and the system in which the motor 
        operates;
            (3) Federal Government research on motor end use and 
        efficiency opportunities is more than a decade old; and
            (4) the Census Bureau has discontinued collection of data 
        on motor and generator importation, manufacture, shipment, and 
        sales.
    (b) Definitions.--In this section:
            (1) Department.--The term ``Department'' means the 
        Department of Energy.
            (2) Interested parties.--The term ``interested parties'' 
        includes--
                    (A) trade associations;
                    (B) motor manufacturers;
                    (C) motor end users;
                    (D) electric utilities; and
                    (E) individuals and entities that conduct energy 
                efficiency programs.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy, in consultation with interested parties.
    (c) Assessment.--The Secretary shall conduct an assessment of 
electric motors and the electric motor market in the United States that 
shall--
            (1) include important subsectors of the industrial and 
        commercial electric motor market (as determined by the 
        Secretary), including--
                    (A) the stock of motors and motor-driven equipment;
                    (B) efficiency categories of the motor population; 
                and
                    (C) motor systems that use drives, servos, and 
                other control technologies;
            (2) characterize and estimate the opportunities for 
        improvement in the energy efficiency of motor systems by market 
        segment, including opportunities for--
                    (A) expanded use of drives, servos, and other 
                control technologies;
                    (B) expanded use of process control, pumps, 
                compressors, fans or blowers, and material handling 
                components; and
                    (C) substitution of existing motor designs with 
                existing and future advanced motor designs, including 
                electronically commutated permanent magnet, interior 
                permanent magnet, and switched reluctance motors; and
            (3) develop an updated profile of motor system purchase and 
        maintenance practices, including surveying the number of 
        companies that have motor purchase and repair specifications, 
        by company size, number of employees, and sales.
    (d) Recommendations; Update.--Based on the assessment conducted 
under subsection (c), the Secretary shall--
            (1) develop--
                    (A) recommendations to update the detailed motor 
                profile on a periodic basis;
                    (B) methods to estimate the energy savings and 
                market penetration that is attributable to the Save 
                Energy Now Program of the Department; and
                    (C) recommendations for the Director of the Census 
                Bureau on market surveys that should be undertaken in 
                support of the motor system activities of the 
                Department; and
            (2) prepare an update to the Motor Master+ program of the 
        Department.
    (e) Program.--Based on the assessment, recommendations, and update 
required under subsections (c) and (d), the Secretary shall establish a 
proactive, national program targeted at motor end-users and delivered 
in cooperation with interested parties to increase awareness of--
            (1) the energy and cost-saving opportunities in commercial 
        and industrial facilities using higher efficiency electric 
        motors;
            (2) improvements in motor system procurement and management 
        procedures in the selection of higher efficiency electric 
        motors and motor-system components, including drives, controls, 
        and driven equipment; and
            (3) criteria for making decisions for new, replacement, or 
        repair motor and motor system components.

SEC. 245. MOTOR EFFICIENCY REBATE PROGRAM.

    (a) In General.--Part C of title III of the Energy Policy and 
Conservation Act (42 U.S.C. 6311 et seq.) is amended by adding at the 
end the following:

``SEC. 347. MOTOR EFFICIENCY REBATE PROGRAM.

    ``(a) Establishment.--Not later than January 1, 2010, in accordance 
with subsection (b), the Secretary shall establish a program to provide 
rebates for expenditures made by entities--
            ``(1) for the purchase and installation of a new electric 
        motor that has a nominal full load efficiency that is not less 
        than the nominal full load efficiency as defined in--
                    ``(A) table 12-12 of NEMA Standards Publication MG 
                1-2006 for random wound motors rated 600 volts or 
                lower; or
                    ``(B) table 12-13 of NEMA Standards Publication MG 
                1-2006 for form wound motors rated 5000 volts or lower; 
                and
            ``(2) to replace an installed motor of the entity the 
        specifications of which are established by the Secretary by a 
        date that is not later than 90 days after the date of enactment 
        of this section.
    ``(b) Requirements.--
            ``(1) Application.--To be eligible to receive a rebate 
        under this section, an entity shall submit to the Secretary an 
        application in such form, at such time, and containing such 
        information as the Secretary may require, including--
                    ``(A) demonstrated evidence that the entity 
                purchased an electric motor described in subsection 
                (a)(1) to replace an installed motor described in 
                subsection (a)(2);
                    ``(B) demonstrated evidence that the entity--
                            ``(i) removed the installed motor of the 
                        entity from service; and
                            ``(ii) properly disposed the installed 
                        motor of the entity; and
                    ``(C) the physical nameplate of the installed motor 
                of the entity.
            ``(2) Authorized amount of rebate.--The Secretary may 
        provide to an entity that meets each requirement under 
        paragraph (1) a rebate the amount of which shall be equal to 
        the product obtained by multiplying--
                    ``(A) the nameplate horsepower of the electric 
                motor purchased by the entity in accordance with 
                subsection (a)(1); and
                    ``(B) $25.00.
            ``(3) Payments to distributors of qualifying electric 
        motors.--To assist in the payment for expenses relating to 
        processing and motor core disposal costs, the Secretary shall 
        provide to the distributor of an electric motor described in 
        subsection (a)(1), the purchaser of which received a rebate 
        under this section, an amount equal to the product obtained by 
        multiplying--
                    ``(A) the nameplate horsepower of the electric 
                motor; and
                    ``(B) $5.00.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, to remain available until 
expended--
            ``(1) $80,000,000 for fiscal year 2011;
            ``(2) $75,000,000 for fiscal year 2012;
            ``(3) $70,000,000 for fiscal year 2013;
            ``(4) $65,000,000 for fiscal year 2014; and
            ``(5) $60,000,000 for fiscal year 2015.''.
    (b) Table of Contents.--The table of contents of the Energy Policy 
and Conservation Act (42 U.S.C. prec. 6201) is amended by adding at the 
end of the items relating to part C of title III the following:

``Sec. 347. Motor efficiency rebate program.''.

   Subtitle E--Improvements in Energy Savings Performance Contracting

SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS.

    (a) Competition Requirements for Task or Delivery Orders Under 
Energy Savings Performance Contracts.--
            (1) Competition requirements.--Subsection (a) of section 
        801 of the National Energy Conservation Policy Act (42 U.S.C. 
        8287(a)) is amended by adding at the end the following 
        paragraph:
    ``(3)(A) The head of a Federal agency may issue a task or delivery 
order under an energy savings performance contract by--
            ``(i) notifying all contractors that have received an award 
        under such contract that the agency proposes to discuss energy 
        savings performance services for some or all of its facilities 
        and, following a reasonable period of time to provide a 
        proposal in response to the notice, soliciting an expression of 
        interest in performing site surveys or investigations and 
        feasibility designs and studies and the submission of 
        qualifications from such contractors, and including in such 
        notice summary information concerning energy use for any 
        facilities that the agency has specific interest in including 
        in such contract;
            ``(ii) reviewing all expressions of interest and 
        qualifications submitted pursuant to the notice under clause 
        (i);
            ``(iii) selecting two or more contractors (from among those 
        reviewed under clause (ii)) to conduct discussions concerning 
        the contractors' respective qualifications to implement 
        potential energy conservation measures, including requesting 
        references demonstrating experience on similar efforts and the 
        resulting energy savings of such similar efforts, and providing 
        an opportunity for a post-award debriefing to all contractors 
        that submitted expressions of interest and qualifications under 
        clause (ii) pursuant to the notice;
            ``(iv) selecting and authorizing--
                    ``(I) more than one contractor (from among those 
                selected under clause (iii)) to conduct site surveys, 
                investigations, feasibility designs and studies or 
                similar assessments for the energy savings performance 
                contract services (or for discrete portions of such 
                services), for the purpose of allowing each such 
                contractor to submit a firm, fixed-price proposal to 
                implement specific energy conservation measures; or
                    ``(II) one contractor (from among those selected 
                under clause (iii)) to conduct a site survey, 
                investigation, a feasibility design and study or 
                similar for the purpose of allowing the contractor to 
                submit a firm, fixed-price proposal to implement 
                specific energy conservation measures;
            ``(v) negotiating a task or delivery order for energy 
        savings performance contracting services with the contractor or 
        contractors selected under clause (iv) based on the energy 
        conservation measures identified; and
            ``(vi) issuing a task or delivery order for energy savings 
        performance contracting services to such contractor or 
        contractors.
    ``(B) The issuance of a task or delivery order for energy savings 
performance contracting services pursuant to subparagraph (A) is deemed 
to satisfy the task and delivery order competition requirements in 
section 2304c(d) of title 10, United States Code, and section 303J(d) 
of the Federal Property and Administrative Services Act of 1949 (41 
U.S.C. 253j(d)).
    ``(C) The Secretary may issue guidance as necessary to agencies 
issuing task or delivery orders pursuant to subparagraph (A).''.
            (2) Effective date.--The amendment made by paragraph (1) is 
        inapplicable to task or delivery orders issued before the date 
        of enactment of this section.
    (b) Inclusion of Thermal Renewable Energy.--Section 203 of the 
Energy Policy Act of 2005 (42 U.S.C. 15852) is amended--
            (1) in subsection (a), by striking ``electric''; and
            (2) in subsection (b)(2), by inserting ``or thermal'' after 
        ``means electric''.
    (c)  Credit for Renewable Energy Produced and Used on Site.--
Subsection (c) of section 203 of the Energy Policy Act of 2005 (42 
U.S.C. 15852) is amended to read as follows:
    ``(c) Calculation.--Renewable energy produced at a Federal 
facility, on Federal lands, or on Indian lands (as defined in title 
XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 et seq.)) shall 
be calculated separately from renewable energy consumed at a Federal 
facility, and each may be used to comply with the consumption 
requirement under subsection (a).''.
    (d) Financing Flexibility.--Section 801(a)(2)(E) of the National 
Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)(E)) is amended by 
striking ``In'' and inserting ``Notwithstanding any other provision of 
law, in''.

                    Subtitle F--Public Institutions

SEC. 261. PUBLIC INSTITUTIONS.

    Section 399A of the Energy Policy and Conservation Act (42 U.S.C. 
6371h-1) is amended--
            (1) in subsection (a)(5), by striking ``or a designee'' and 
        inserting ``an Indian tribe, a not-for-profit hospital or not-
        for-profit inpatient health care facility, or a designated 
        agent'';
            (2) in subsection (c)(1), by striking subparagraph (C);
            (3) in subsection (f)(3)(A), by striking ``$1,000,000'' and 
        inserting ``$2,500,000''; and
            (4) in subsection (i)(1), by striking ``$250,000,000 for 
        each of fiscal years 2009 through 2013'' and inserting 
        ``$250,000,000 for each of fiscal years 2010 through 2015''.

SEC. 262. COMMUNITY ENERGY EFFICIENCY FLEXIBILITY.

    Section 545(b)(3) of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17155(b)(3)) is amended--
            (1) by striking ``Indian tribe may use'' and all that 
        follows through ``for administrative expenses'' and inserting 
        ``Indian tribe may use for administrative expenses'';
            (2) by striking subparagraphs (B) and (C);
            (3) by redesignating the remaining clauses (i) and (ii) as 
        subparagraphs (A) and (B), respectively and adjusting the 
        margin of those subparagraphs accordingly; and
            (4) by striking the semicolon at the end and inserting a 
        period.

SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION.

    (a) Section 541(3)(A) of the Energy Independence and Security Act 
of 2007 is amended in clause (i) by striking ``and'' at the end of 
subclause (II), in clause (ii) by striking the period at the end of 
subclause (II) and inserting ``; or'', and by inserting the following 
new clause (iii):
                    ``(iii) a group of adjacent, contiguous, or 
                geographically proximate units of local government that 
                reach agreement to act jointly for purposes of this 
                section and that represent a combined population of not 
                less than 35,000.''.
    (b) Section 541(3)(B) of the Energy Independence and Security Act 
of 2007 is amended in clause (i) by striking ``or'', in clause (ii) by 
striking the period at the end and inserting ``; or'', and by inserting 
the following new clause (iii):
                    ``(iii) a group of adjacent, contiguous, or 
                geographically proximate units of local government that 
                reach agreement to act jointly for purposes of this 
                section and that represent a combined population of not 
                less than 50,000.''.

SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY PROGRAM.

    (a) In General.--The Secretary of Energy is authorized to make 
grants to private, nonprofit, mission-driven community development 
organizations including community development corporations and 
community development financial institutions to provide financing to 
businesses and projects that improve energy efficiency; identify and 
develop alternative, renewable, and distributed energy supplies; 
provide technical assistance and promote job and business opportunities 
for low-income residents; and increase energy conservation in low 
income rural and urban communities.
    (b) Grants.--The purpose of such grants is to increase the flow of 
capital and benefits to low income communities, minority-owned and 
woman-owned businesses and entrepreneurs and other projects and 
activities located in low income communities in order to reduce 
environmental degradation, foster energy conservation and efficiency 
and create job and business opportunities for local residents. The 
Secretary may make grants on a competitive basis for--
            (1) investments that develop alternative, renewable, and 
        distributed energy supplies;
            (2) capitalizing loan funds that lend to energy efficiency 
        projects and energy conservation programs;
            (3) technical assistance to plan, develop, and manage an 
        energy efficiency financing program; and
            (4) technical and financial assistance to assist small-
        scale businesses and private entities develop new renewable and 
        distributed sources of power or combined heat and power 
        generation.
    (c) Authorization of Appropriations.--For the purposes of this 
section there is authorized to be appropriated $50,000,000 for each of 
the fiscal years 2010 through 2015.

                       Subtitle G--Miscellaneous

SEC. 271. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS TECHNOLOGIES.

    Section 543 of the National Energy Conservation Policy Act (42 
U.S.C. 8253) is amended to read as follows:

``SEC. 543. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS 
              TECHNOLOGIES.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of the American Clean Energy and Security Act of 2009, each 
Federal agency shall collaborate with the Director of the Office of 
Management and Budget (referred to in this section as the `Director') 
to create an implementation strategy, including best practices and 
measurement and verification techniques, for the purchase and use of 
energy efficient information and communications technologies and 
practices. Wherever possible, existing standards, specifications, 
performance metrics, and best management practices that have been or 
are being developed in open collaboration and with broad stakeholder 
input and review should be incorporated. In addition, agency strategies 
shall be flexible, cost-effective, and based on the specific operating 
requirements and statutory mission of each agency.
    ``(b) Energy Efficient Information and Communications 
Technologies.--In developing an implementation strategy, each agency 
shall--
            ``(1) consider information and communications technologies 
        and infrastructure, including, but not limited to, advanced 
        metering infrastructure, information and communications 
        technology services and products, efficient data center 
        strategies, applications modernization and rationalization, 
        building systems energy efficiency, and telework; and
            ``(2) ensure that agencies are eligible to realize the 
        savings and rewards brought about through increased 
        efficiencies.
    ``(c) Performance Goals.--Not later than 6 months after the date of 
enactment of the American Clean Energy and Security Act of 2009, the 
Director shall establish performance goals for evaluating the efforts 
of the agencies in improving the maintenance, purchase and use of 
energy efficiency of information and communications technology systems. 
These performance goals should measure information technology costs 
over a specific time horizon (3 to 5 years), providing a complete 
picture of all costs, including energy.
    ``(d) Report.--Not later than 18 months after the date of enactment 
of the American Clean Energy and Security Act of 2009, and annually 
thereafter, the Director shall submit a report to Congress on--
            ``(1) the progress of each agency in reducing energy use 
        through its implementation strategy; and
            ``(2) new and emerging technologies that would help achieve 
        increased energy efficiency.''.

SEC. 272. NATIONAL ENERGY EFFICIENCY GOALS.

    (a) Goals.--The energy efficiency goals of the United States are--
            (1) to achieve an improvement in the overall energy 
        productivity of the United States (measured in gross domestic 
        product per unit of energy input) of at least 2.5 percent per 
        year by the year 2012; and
            (2) to maintain that annual rate of improvement each year 
        through 2030.
    (b) Strategic Plan.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of Energy (referred to in 
        this section as the ``Secretary''), in cooperation with the 
        Administrator and the heads of other appropriate Federal 
        agencies, shall develop a strategic plan to achieve the 
        national goals for improvement in energy productivity 
        established under subsection (a).
            (2) Public input and comment.--The Secretary shall develop 
        the plan in a manner that provides appropriate opportunities 
        for public input and comment.
    (c) Plan Contents.--The strategic plan shall--
            (1) identify future regulatory, funding, and policy 
        priorities that would assist the United States in meeting the 
        national goals;
            (2) include energy savings estimates for each sector; and
            (3) include data collection methodologies and compilations 
        used to establish baseline and energy savings data.
    (d) Plan Updates.--
            (1) In general.--The Secretary shall--
                    (A) update the strategic plan biennially; and
                    (B) include the updated strategic plan in the 
                national energy policy plan required by section 801 of 
                the Department of Energy Organization Act (42 U.S.C. 
                7321).
            (2) Contents.--In updating the plan, the Secretary shall--
                    (A) report on progress made toward implementing 
                efficiency policies to achieve the national goals 
                established under subsection (a); and
                    (B) verify, to the maximum extent practicable, 
                energy savings resulting from the policies.
    (e) Report to Congress and the Public.--The Secretary shall submit 
to Congress, and make available to the public, the initial strategic 
plan developed under subsection (b) and each updated plan.

SEC. 273. AFFILIATED ISLAND ENERGY INDEPENDENCE TEAM.

    (a) Definitions.--In this section:
            (1) Affiliated island.--The term ``affiliated island'' 
        means--
                    (A) the Commonwealth of Puerto Rico;
                    (B) Guam;
                    (C) American Samoa;
                    (D) the Commonwealth of the Northern Mariana 
                Islands;
                    (E) the Federated States of Micronesia;
                    (F) the Republic of the Marshall Islands;
                    (G) the Republic of Palau; and
                    (H) the United States Virgin Islands.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy (acting through the Assistant Secretary of Energy 
        Efficiency and Renewable Energy), in consultation with the 
        Secretary of the Interior and the Secretary of State.
            (3) Team.--The term ``team'' means the team established by 
        the Secretary under subsection (b).
    (b) Establishment.--As soon as practicable after the date of 
enactment of this Act, the Secretary shall assemble a team of 
technical, policy, and financial experts to address the energy needs of 
each affiliated island--
            (1) to reduce the reliance and expenditure of each 
        affiliated island on imported fossil fuels;
            (2) to increase the use by each affiliated island of 
        indigenous, nonfossil fuel energy sources;
            (3) to improve the performance of the energy infrastructure 
        of the affiliated island through projects--
                    (A) to improve the energy efficiency of power 
                generation, transmission, and distribution; and
                    (B) to increase consumer energy efficiency;
            (4) to improve the performance of the energy infrastructure 
        of each affiliated island through enhanced planning, education, 
        and training;
            (5) to adopt research-based and public-private partnership-
        based approaches as appropriate;
            (6) to stimulate economic development and job creation; and
            (7) to enhance the engagement by the Federal Government in 
        international efforts to address island energy needs.
    (c) Duties of Team.--
            (1) Energy action plans.--
                    (A) In general.--In accordance with subparagraph 
                (B), the team shall provide technical, programmatic, 
                and financial assistance to each utility of each 
                affiliated island, and the government of each 
                affiliated island, as appropriate, to develop and 
                implement an energy Action Plan for each affiliated 
                island to reduce the reliance of each affiliated island 
                on imported fossil fuels through increased efficiency 
                and use of indigenous clean-energy resources.
                    (B) Requirements.--Each Action Plan described in 
                subparagraph (A) for each affiliated island shall 
                require and provide for--
                            (i) the conduct of 1 or more studies to 
                        assess opportunities to reduce fossil fuel use 
                        through--
                                    (I) the improvement of the energy 
                                efficiency of the affiliated island; 
                                and
                                    (II) the increased use by the 
                                affiliated island of indigenous clean-
                                energy resources;
                            (ii) the identification and implementation 
                        of the most cost-effective strategies and 
                        projects to reduce the dependence of the 
                        affiliated island on fossil fuels;
                            (iii) the promotion of education and 
                        training activities to improve the capacity of 
                        the local utilities of the affiliated island, 
                        and the government of the affiliated island, as 
                        appropriate, to plan for, maintain, and operate 
                        the energy infrastructure of the affiliated 
                        island through the use of local or regional 
                        institutions, as appropriate;
                            (iv) the coordination of the activities 
                        described in clause (iii) to leverage the 
                        expertise and resources of international 
                        entities, the Department of Energy, the 
                        Department of the Interior, and the regional 
                        utilities of the affiliated island;
                            (v) the identification, and development, as 
                        appropriate, of research-based and private-
                        public, partnership approaches to implement the 
                        Action Plan; and
                            (vi) any other component that the Secretary 
                        determines to be necessary to reduce 
                        successfully the use by each affiliated island 
                        of fossil fuels.
            (2) Reports to secretary.--Not later than 1 year after the 
        date on which the Secretary establishes the team and biennially 
        thereafter, the team shall submit to the Secretary a report 
        that contains a description of the progress of each affiliated 
        island in--
                    (A) implementing the Action Plan of the affiliated 
                island developed under paragraph (1)(A); and
                    (B) reducing the reliance of the affiliated island 
                on fossil fuels.
    (d) Use of Regional Utility Organizations.--To provide expertise to 
affiliated islands to assist the affiliated islands in meeting the 
purposes of this section, the Secretary shall consider--
            (1) including regional utility organizations in the 
        establishment of the team; and
            (2) providing assistance through regional utility 
        organizations.
    (e) Annual Reports to Congress.--Not later than 30 days after the 
date on which the Secretary receives a report submitted by the team 
under subsection (c)(2), the Secretary shall submit to the appropriate 
committees of Congress a report that contains a summary of the report 
of the team.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 274. PRODUCT CARBON DISCLOSURE PROGRAM.

    (a) EPA Study.--The Administrator shall conduct a study to 
determine the feasibility of establishing a national program for 
measuring, reporting, publicly disclosing, and labeling products or 
materials sold in the United States for their carbon content, and 
shall, not later than 18 months after the date of enactment of this 
Act, transmit a report to Congress which shall include the following:
            (1) A determination of whether a national product carbon 
        disclosure program and labeling program would be effective in 
        achieving the intended goals of achieving greenhouse gas 
        reductions and an examination of existing programs globally and 
        their strengths and weaknesses.
            (2) Criteria for identifying and prioritizing sectors and 
        products and processes that should be covered in such program 
        or programs.
            (3) An identification of products, processes, or sectors 
        whose inclusion could have a substantial carbon impact 
        (prioritizing industrial products such as iron and steel, 
        aluminum, cement, chemicals, and paper products, and also 
        including food, beverage, hygiene, cleaning, household 
        cleaners, construction, metals, clothing, semiconductor, and 
        consumer electronics).
            (4) Suggested methodology and protocols for measuring the 
        carbon content of the products across the entire carbon 
        lifecycle of such products for use in a carbon disclosure 
        program and labeling program.
            (5) A review of existing greenhouse gas product accounting 
        standards, methodologies, and practices including the 
        Greenhouse Gas Protocol, ISO 14040/44, ISO 14067, and 
        Publically Available Specification 2050, and including a review 
        of the strengths and weaknesses of each.
            (6) A survey of secondary databases including the 
        Manufacturing Energy Consumption Survey and evaluate the 
        quality of data for use in a product carbon disclosure program 
        and product carbon labeling program and an identification of 
        gaps in the data relative to the potential purposes of a 
        national product carbon disclosure program and product carbon 
        labeling program and development of recommendations for 
        addressing these data gaps.
            (7) An assessment of the utility of comparing products and 
        the appropriateness of product carbon standards.
            (8) An evaluation of the information needed on a label for 
        clear and accurate communication, including what pieces of 
        quantitative and qualitative information needs to be disclosed.
            (9) An evaluation of the appropriate boundaries of the 
        carbon lifecycle analysis for different sectors and products.
            (10) An analysis of whether default values should be 
        developed for products whose producer does not participate in 
        the program or does not have data to support a disclosure or 
        label and determine best ways to develop such default values.
            (11) A recommendation of certification and verification 
        options necessary to assure the quality of the information and 
        avoid greenwashing or the use of insubstantial or meaningless 
        environmental claims to promote a product.
            (12) An assessment of options for educating consumers about 
        product carbon content and the product carbon disclosure 
        program and product carbon labeling program.
            (13) An analysis of the costs and timelines associated with 
        establishing a national product carbon disclosure program and 
        product carbon labeling program, including options for a phased 
        approach. Costs should include those for businesses associated 
        with the measurement of carbon footprints and those associated 
        with creating a product carbon label and managing and operating 
        a product carbon labeling program, and options for minimizing 
        these costs.
            (14) An evaluation of incentives (such as financial 
        incentives, brand reputation, and brand loyalty) to determine 
        whether reductions in emissions can be accelerated through 
        encouraging more efficient manufacturing or by encouraging 
        preferences for lower-emissions products to substitute for 
        higher-emissions products whose level of performance is no 
        better.
    (b) Development of National Carbon Disclosure Program.--Upon 
conclusion of the study, and not more than 36 months after the date of 
enactment of this Act, the Administrator shall establish a national 
product carbon disclosure program, participation in which shall be 
voluntary, and which may involve a product carbon label with broad 
applicability to the wholesale and consumer markets to enable and 
encourage knowledge about carbon content by producers and consumers and 
to inform efforts to reduce energy consumption (carbon dioxide 
equivalent emissions) nationwide. In developing such a program, the 
Administrator shall--
            (1) consider the results of the study conducted under 
        subsection (a);
            (2) consider existing and planned programs and proposals 
        and measurement standards (including the Publicly Available 
        Specification 2050, standards to be developed by the World 
        Resource Institute/World Business Council for Sustainable 
        Development, the International Standards Organization, and the 
        bill AB19 pending in the California legislature);
            (3) consider the compatibility of a national product carbon 
        disclosure program with existing programs;
            (4) utilize incentives and other means to spur the adoption 
        of product carbon disclosure and product carbon labeling;
            (5) develop protocols and parameters for a product carbon 
        disclosure program, including a methodology and formula for 
        assessing, verifying, and potentially labeling a product's 
        greenhouse gas content, and for data quality requirements to 
        allow for product comparison;
            (6) create a means to--
                    (A) document best practices;
                    (B) ensure clarity and consistency;
                    (C) work with suppliers, manufacturers, and 
                retailers to encourage participation;
                    (D) ensure that protocols are consistent and 
                comparable across like products; and
                    (E) evaluate the effectiveness of the program;
            (7) make publicly available information on product carbon 
        content to ensure transparency;
            (8) provide for public outreach, including a consumer 
        education program to increase awareness;
            (9) develop training and education programs to help 
        businesses learn how to measure and communicate their carbon 
        footprint and easy tools and templates for businesses to use to 
        reduce cost and time to measure their products' carbon 
        lifecycle;
            (10) consult with the Secretary of Energy, the Secretary of 
        Commerce, the Federal Trade Commission, and other Federal 
        agencies, as necessary;
            (11) gather input from stakeholders through consultations, 
        public workshops or hearings with representatives of consumer 
        product manufacturers, consumer groups, and environmental 
        groups;
            (12) utilize systems for verification and product 
        certification that will ensure that claims manufacturers make 
        about their products are valid;
            (13) create a process for reviewing the accuracy of product 
        carbon label information and protecting the product carbon 
        label in the case of a change in the product's energy source, 
        supply chain, ingredients, or other factors, and specify the 
        frequency to which data should be updated; and
            (14) develop a standardized, easily understandable carbon 
        label, if appropriate, and create a process for responding to 
        inaccuracies and misuses of such a label.
    (c) Report to Congress.--Not later than 5 years after the program 
is established pursuant to subsection (b), the Administrator shall 
report to Congress on the effectiveness and impact of the program, the 
level of voluntary participation, and any recommendations for 
additional measures.
    (d) Definitions.--As used in this section--
            (1) the term ``carbon content'' means the amount of 
        greenhouse gas emissions and their warming impact on the 
        atmosphere expressed in carbon dioxide equivalent associated 
        with a product's value chain;
            (2) the term ``carbon footprint'' means the level of 
        greenhouse gas emissions produced by a particular activity, 
        service, or entity; and
            (3) the term ``carbon lifecycle'' means the greenhouse gas 
        emissions that are released as part of the processes of 
        creating, producing, processing or manufacturing, modifying, 
        transporting, distributing, storing, using, recycling, or 
        disposing of goods and services.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Administrator $5,000,000 for the study required by 
subsection (a) and $25,000,000 for each of fiscal years 2010 through 
2025 for the program required under subsection (b).

              TITLE III--REDUCING GLOBAL WARMING POLLUTION

SEC. 301. SHORT TITLE.

    This title, and sections 112, 116, 221, 222, 223, and 401 of this 
Act, and the amendments made by this title and those sections, may be 
cited as the ``Safe Climate Act''.

             Subtitle A--Reducing Global Warming Pollution

SEC. 311. REDUCING GLOBAL WARMING POLLUTION.

    The Clean Air Act (42 U.S.C. and following) is amended by adding 
after title VI the following new title:

        ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

     ``PART A--GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS

``SEC. 701. FINDINGS AND PURPOSE.

    ``(a) Findings.--The Congress finds as follows:
            ``(1) Global warming poses a significant threat to the 
        national security, economy, public health and welfare, and 
        environment of the United States, as well as of other nations.
            ``(2) Reviews of scientific studies, including by the 
        Intergovernmental Panel on Climate Change and the National 
        Academy of Sciences, demonstrate that global warming is the 
        result of the combined anthropogenic greenhouse gas emissions 
        from numerous sources of all types and sizes. Each increment of 
        emission, when combined with other emissions, causes or 
        contributes materially to the acceleration and extent of global 
        warming and its adverse effects for the lifetime of such gas in 
        the atmosphere. Accordingly, controlling emissions in small as 
        well as large amounts is essential to prevent, slow the pace 
        of, reduce the threats from, and mitigate global warming and 
        its adverse effects.
            ``(3) Because they induce global warming, greenhouse gas 
        emissions cause or contribute to injuries to persons in the 
        United States, including--
                    ``(A) adverse health effects such as disease and 
                loss of life;
                    ``(B) displacement of human populations;
                    ``(C) damage to property and other interests 
                related to ocean levels, acidification, and ice 
                changes;
                    ``(D) severe weather and seasonal changes;
                    ``(E) disruption, costs, and losses to business, 
                trade, employment, farms, subsistence, aesthetic 
                enjoyment of the environment, recreation, culture, and 
                tourism;
                    ``(F) damage to plants, forests, lands, and waters;
                    ``(G) harm to wildlife and habitat;
                    ``(H) scarcity of water and the decreased abundance 
                of other natural resources;
                    ``(I) worsening of tropospheric air pollution;
                    ``(J) substantial threats of similar damage; and
                    ``(K) other harm.
            ``(4) That many of these effects and risks of future 
        effects of global warming are widely shared does not minimize 
        the adverse effects individual persons have suffered, will 
        suffer, and are at risk of suffering because of global warming.
            ``(5) That some of the adverse and potentially catastrophic 
        effects of global warming are at risk of occurring and not a 
        certainty does not negate the harm persons suffer from actions 
        that increase the likelihood, extent, and severity of such 
        future impacts.
            ``(6) Nations of the world look to the United States for 
        leadership in addressing the threat of and harm from global 
        warming. Full implementation of the Safe Climate Act is 
        critical to engage other nations in an international effort to 
        mitigate the threat of and harm from global warming.
            ``(7) Global warming and its adverse effects are occurring 
        and are likely to continue and increase in magnitude, and to do 
        so at a greater and more harmful rate, unless the Safe Climate 
        Act is fully implemented and enforced in an expeditious manner.
    ``(b) Purpose.--It is the general purpose of the Safe Climate Act 
to help prevent, reduce the pace of, mitigate, and remedy global 
warming and its adverse effects. To fulfill such purpose, it is 
necessary to--
            ``(1) require the timely fulfillment of all governmental 
        acts and duties, both substantive and procedural, and the 
        prompt compliance of covered entities with the requirements of 
        the Safe Climate Act;
            ``(2) establish and maintain an effective, transparent, and 
        fair market for emission allowances and preserve the integrity 
        of the cap on emissions and of offset credits;
            ``(3) advance the production and deployment of clean energy 
        and energy efficiency technologies; and
            ``(4) ensure effective enforcement of the Safe Climate Act 
        by citizens, States, Indian tribes, and all levels of 
        government because each violation of the Safe Climate Act is 
        likely to result in an additional increment of greenhouse gas 
        emission and will slow the pace of implementation of the Safe 
        Climate Act and delay the achievement of the goals set forth in 
        section 702, and cause or contribute to global warming and its 
        adverse effects.

``SEC. 702. ECONOMY-WIDE REDUCTION GOALS.

    ``The goals of the Safe Climate Act are to reduce steadily the 
quantity of United States greenhouse gas emissions such that--
            ``(1) in 2012, the quantity of United States greenhouse gas 
        emissions does not exceed 97 percent of the quantity of United 
        States greenhouse gas emissions in 2005;
            ``(2) in 2020, the quantity of United States greenhouse gas 
        emissions does not exceed 80 percent of the quantity of United 
        States greenhouse gas emissions in 2005;
            ``(3) in 2030, the quantity of United States greenhouse gas 
        emissions does not exceed 58 percent of the quantity of United 
        States greenhouse gas emissions in 2005; and
            ``(4) in 2050, the quantity of United States greenhouse gas 
        emissions does not exceed 17 percent of the quantity of United 
        States greenhouse gas emissions in 2005.

``SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES.

    ``(a) In General.--The regulations issued under section 721 shall 
cap and reduce annually the greenhouse gas emissions of capped sources 
each calendar year beginning in 2012 such that--
            ``(1) in 2012, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 97 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005;
            ``(2) in 2020, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 83 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005;
            ``(3) in 2030, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 58 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005; and
            ``(4) in 2050, the quantity of greenhouse gas emissions 
        from capped sources does not exceed 17 percent of the quantity 
        of greenhouse gas emissions from such sources in 2005.
    ``(b) Definition.--For purposes of this section, the term 
`greenhouse gas emissions from such sources in 2005' means emissions to 
which section 722 would have applied if the requirements of this title 
for the specified year had been in effect for 2005.

``SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS.

    ``For the purposes of decreasing the likelihood of catastrophic 
climate change, preserving tropical forests, building capacity to 
generate offset credits, and facilitating international action on 
global warming, the Administrator shall set aside the percentage 
specified in section 781 of the quantity of emission allowances 
established under section 721(a) for each year, to be used to achieve a 
reduction of greenhouse gas emissions from deforestation in developing 
countries in accordance with part E. In 2020, activities supported 
under part E shall provide greenhouse gas reductions in an amount equal 
to an additional 10 percentage points of reductions from United States 
greenhouse gas emissions in 2005. The Administrator shall distribute 
these allowances with respect to activities in countries that enter 
into and implement agreements or arrangements relating to reduced 
deforestation as described in section 754(a)(2).

``SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS.

    ``(a) In General.--The Administrator shall, in consultation with 
appropriate Federal agencies, submit to Congress a report not later 
than July 1, 2013, and every 4 years thereafter, that includes--
            ``(1) an analysis of key findings based on the latest 
        scientific information and data relevant to global climate 
        change;
            ``(2) an analysis of capabilities to monitor and verify 
        greenhouse gas reductions on a worldwide basis, including for 
        the United States, as required under the Safe Climate Act; and
            ``(3) an analysis of the status of worldwide greenhouse gas 
        reduction efforts, including implementation of the Safe Climate 
        Act and other policies, both domestic and international, for 
        reducing greenhouse gas emissions, preventing dangerous 
        atmospheric concentrations of greenhouse gases, preventing 
        significant irreversible consequences of climate change, and 
        reducing vulnerability to the impacts of climate change.
    ``(b) Exception.--Paragraph (3) of subsection (a) shall not apply 
to the first report submitted under such subsection.
    ``(c) Latest Scientific Information.--The analysis required under 
subsection (a)(1) shall--
            ``(1) address existing scientific information and reports, 
        considering, to the greatest extent possible, the most recent 
        assessment report of the Intergovernmental Panel on Climate 
        Change, reports by the United States Global Change Research 
        Program, the Natural Resources Climate Change Adaptation Panel 
        established under section 475 of the American Clean Energy and 
        Security Act of 2009, and Federal agencies, and the European 
        Union's global temperature data assessment; and
            ``(2) review trends and projections for--
                    ``(A) global and country-specific annual emissions 
                of greenhouse gases, and cumulative greenhouse gas 
                emissions produced between 1850 and the present, 
                including--
                            ``(i) global cumulative emissions of 
                        anthropogenic greenhouse gases;
                            ``(ii) global annual emissions of 
                        anthropogenic greenhouse gases; and
                            ``(iii) by country, annual total, annual 
                        per capita, and cumulative anthropogenic 
                        emissions of greenhouse gases for the top 50 
                        emitting nations;
                    ``(B) significant changes, both globally and by 
                region, in annual net non-anthropogenic greenhouse gas 
                emissions from natural sources, including permafrost, 
                forests, or oceans;
                    ``(C) global atmospheric concentrations of 
                greenhouse gases, expressed in annual concentration 
                units as well as carbon dioxide equivalents based on 
                100-year global warming potentials;
                    ``(D) major climate forcing factors, such as 
                aerosols;
                    ``(E) global average temperature, expressed as 
                seasonal and annual averages in land, ocean, and land-
                plus-ocean averages; and
                    ``(F) sea level rise;
            ``(3) assess the current and potential impacts of global 
        climate change on--
                    ``(A) human populations, including impacts on 
                public health, economic livelihoods, subsistence, human 
                infrastructure, and displacement or permanent 
                relocation due to flooding, severe weather, extended 
                drought, erosion, or other ecosystem changes;
                    ``(B) freshwater systems, including water resources 
                for human consumption and agriculture and natural and 
                managed ecosystems, flood and drought risks, and 
                relative humidity;
                    ``(C) the carbon cycle, including impacts related 
                to the thawing of permafrost, the frequency and 
                intensity of wildfire, and terrestrial and ocean carbon 
                sinks;
                    ``(D) ecosystems and animal and plant populations, 
                including impacts on species abundance, phenology, and 
                distribution;
                    ``(E) oceans and ocean ecosystems, including 
                effects on sea level, ocean acidity, ocean 
                temperatures, coral reefs, ocean circulation, 
                fisheries, and other indicators of ocean ecosystem 
                health;
                    ``(F) the cryosphere, including effects on ice 
                sheet mass balance, mountain glacier mass balance, and 
                sea-ice extent and volume;
                    ``(G) changes in the intensity, frequency, or 
                distribution of severe weather events, including 
                precipitation, tropical cyclones, tornadoes, and severe 
                heat waves;
                    ``(H) agriculture and forest systems; and
                    ``(I) any other indicators the Administrator deems 
                appropriate;
            ``(4) summarize any significant socio-economic impacts of 
        climate change in the United States, including the territories 
        of the United States, drawing on work by Federal agencies and 
        the academic literature, including impacts on--
                    ``(A) public health;
                    ``(B) economic livelihoods and subsistence;
                    ``(C) displacement or permanent relocation due to 
                flooding, severe weather, extended drought, erosion, or 
                other ecosystem changes;
                    ``(D) human infrastructure, including coastal 
                infrastructure vulnerability to extreme events and sea 
                level rise, river floodplain infrastructure, and sewer 
                and water management systems;
                    ``(E) agriculture and forests, including effects on 
                potential growing season, distribution, and yield;
                    ``(F) water resources for human consumption, 
                agriculture and natural and managed ecosystems, flood 
                and drought risks, and relative humidity;
                    ``(G) energy supply and use; and
                    ``(H) transportation;
            ``(5) in assessing risks and impacts, use a risk management 
        framework, including both qualitative and quantitative 
        measures, to assess the observed and projected impacts of 
        current and future climate change, accounting for--
                    ``(A) both monetized and non-monetized losses;
                    ``(B) potential nonlinear, abrupt, or essentially 
                irreversible changes in the climate system;
                    ``(C) potential nonlinear increases in the cost of 
                impacts;
                    ``(D) potential low-probability, high impact 
                events; and
                    ``(E) whether impacts are transitory or essentially 
                permanent; and
            ``(6) based on the findings of the Administrator under this 
        section, as well as assessments produced by the 
        Intergovernmental Panel on Climate Change, the United States 
        Global Change Research program, and other relevant scientific 
        entities--
                    ``(A) describe increased risks to natural systems 
                and society that would result from an increase in 
                global average temperature 3.6 degrees Fahrenheit (2 
                degrees Celsius) above the pre-industrial average or an 
                increase in atmospheric greenhouse gas concentrations 
                above 450 parts per million carbon dioxide equivalent; 
                and
                    ``(B) identify and assess--
                            ``(i) significant residual risks not 
                        avoided by the thresholds described in 
                        subparagraph (A);
                            ``(ii) alternative thresholds or targets 
                        that may more effectively limit the risks 
                        identified pursuant to clause (i); and
                            ``(iii) thresholds above those described in 
                        subparagraph (A) which significantly increase 
                        the risk of certain impacts or render them 
                        essentially permanent.
    ``(d) Status of Monitoring and Verification Capabilities to 
Evaluate Greenhouse Gas Reduction Efforts.--The analysis required under 
subsection (a)(2) shall evaluate the capabilities of the monitoring, 
reporting, and verification systems used to quantify progress in 
achieving reductions in greenhouse gas emissions both globally and in 
the United States (as described in section 702), including--
            ``(1) quantification of emissions and emission reductions 
        by entities participating in the cap and trade program under 
        this title;
            ``(2) quantification of emissions and emission reductions 
        by entities participating in the offset program under this 
        title;
            ``(3) quantification of emission and emissions reductions 
        by entities regulated by performance standards;
            ``(4) quantification of aggregate net emissions and 
        emissions reductions by the United States; and
            ``(5) quantification of global changes in net emissions and 
        in sources and sinks of greenhouse gases.
    ``(e) Status of Greenhouse Gas Reduction Efforts.--The analysis 
required under subsection (a)(3) shall address--
            ``(1) whether the programs under Safe Climate Act and other 
        Federal statutes are resulting in sufficient United States 
        greenhouse gas emissions reductions to meet the emissions 
        reduction goals described in section 702, taking into account 
        the use of offsets; and
            ``(2) whether United States actions, taking into account 
        international actions, commitments, and trends, and considering 
        the range of plausible emissions scenarios, are sufficient to 
        avoid--
                    ``(A) atmospheric greenhouse gas concentrations 
                above 450 parts per million carbon dioxide equivalent;
                    ``(B) global average surface temperature 3.6 
                degrees Fahrenheit (2 degrees Celsius) above the pre-
                industrial average, or such other temperature 
                thresholds as the Administrator deems appropriate; and
                    ``(C) other temperature or greenhouse gas 
                thresholds identified pursuant to subsection (c)(6)(B).
    ``(f) Recommendations.--
            ``(1) Latest scientific information.--Based on the analysis 
        described in subsection (a)(1), each report under subsection 
        (a) shall identify actions that could be taken to--
                    ``(A) improve the characterization of changes in 
                the earth-climate system and impacts of global climate 
                change;
                    ``(B) better inform decision making and actions 
                related to global climate change;
                    ``(C) mitigate risks to natural and social systems; 
                and
                    ``(D) design policies to better account for climate 
                risks.
            ``(2) Monitoring, reporting and verification.--Based on the 
        analysis described in subsection (a)(2), each report under 
        subsection (a) shall identify key gaps in measurement, 
        reporting, and verification capabilities and make 
        recommendations to improve the accuracy and reliability of 
        those capabilities.
            ``(3) Status of greenhouse gas reduction efforts.--Based on 
        the analysis described in subsection (a)(3), taking into 
        account international actions, commitments, and trends, and 
        considering the range of plausible emissions scenarios, each 
        report under subsection (a) shall identify--
                    ``(A) the quantity of additional reductions 
                required to meet the emissions reduction goals in 
                section 702;
                    ``(B) the quantity of additional reductions in 
                global greenhouse gas emissions needed to avoid the 
                concentration and temperature thresholds identified in 
                subsection (e); and
                    ``(C) possible strategies and approaches for 
                achieving additional reductions.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

``SEC. 706. NATIONAL ACADEMY REVIEW.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of this title, the Administrator shall offer to enter into a 
contract with the National Academy of Sciences (in this section 
referred to as the `Academy') under which the Academy shall, not later 
than July 1, 2014, and every 4 years thereafter, submit to Congress and 
the Administrator a report that includes--
            ``(1) a review of the most recent report and 
        recommendations issued under section 705; and
            ``(2) an analysis of technologies to achieve reductions in 
        greenhouse gas emissions.
    ``(b) Failure to Issue a Report.--In the event that the 
Administrator has not issued all or part of the most recent report 
required under section 705, the Academy shall conduct its own review 
and analysis of the required information.
    ``(c) Technological Information.--The analysis required under 
subsection (a)(2) shall--
            ``(1) review existing technological information and 
        reports, including the most recent reports by the Department of 
        Energy, the United States Global Change Research Program, the 
        Intergovernmental Panel on Climate Change, and the 
        International Energy Agency and any other relevant information 
        on technologies or practices that reduce or limit greenhouse 
        gas emissions;
            ``(2) include the participation of technical experts from 
        relevant private industry sectors;
            ``(3) review the current and future projected deployment of 
        technologies and practices in the United States that reduce or 
        limit greenhouse gas emissions, including--
                    ``(A) technologies for capture and sequestration of 
                greenhouse gases;
                    ``(B) technologies to improve energy efficiency;
                    ``(C) low- or zero-greenhouse gas emitting energy 
                technologies;
                    ``(D) low- or zero-greenhouse gas emitting fuels;
                    ``(E) biological sequestration practices and 
                technologies; and
                    ``(F) any other technologies the Academy deems 
                relevant; and
            ``(4) review and compare the emissions reduction potential, 
        commercial viability, market penetration, investment trends, 
        and deployment of the technologies described in paragraph (3), 
        including--
                    ``(A) the need for additional research and 
                development, including publicly funded research and 
                development;
                    ``(B) the extent of commercial deployment, 
                including, where appropriate, a comparison to the cost 
                and level of deployment of conventional fossil fuel-
                fired energy technologies and devices; and
                    ``(C) an evaluation of any substantial 
                technological, legal, or market-based barriers to 
                commercial deployment.
    ``(d) Recommendations.--
            ``(1) Latest scientific information.--Based on the review 
        described in subsection (a)(1), the Academy shall identify 
        actions that could be taken to--
                    ``(A) improve the characterization of changes in 
                the earth-climate system and impacts of global climate 
                change;
                    ``(B) better inform decision making and actions 
                related to global climate change;
                    ``(C) mitigate risks to natural and social systems;
                    ``(D) design policies to better account for climate 
                risks; and
                    ``(E) improve the accuracy and reliability of 
                capabilities to monitor, report, and verify greenhouse 
                gas emissions reduction efforts.
            ``(2) Technological information.--Based on the analysis 
        described in subsection (a)(2), the Academy shall identify--
                    ``(A) additional emissions reductions that may be 
                possible as a result of technologies described in the 
                analysis;
                    ``(B) barriers to the deployment of such 
                technologies; and
                    ``(C) actions that could be taken to speed 
                deployment of such technologies.
            ``(3) Status of greenhouse gas reduction efforts.--Based on 
        the review described in subsection (a)(1), the Academy shall 
        identify--
                    ``(A) the quantity of additional reductions 
                required to meet the emissions reduction goals 
                described in section 702; and
                    ``(B) the quantity of additional reductions in 
                global greenhouse gas emissions needed to avoid the 
                concentration and temperature thresholds described in 
                section 705(c)(6)(A) or identified pursuant to section 
                705(c)(6)(B).
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

``SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDATIONS.

    ``(a) Agency Actions.--The President shall direct relevant Federal 
agencies to use existing statutory authority to take appropriate 
actions identified in the reports submitted under sections 705 and 706, 
and to address any shortfalls identified in such reports, not later 
than July 1, 2015, and every 4 years thereafter.
    ``(b) Plan.--In the event that the Administrator or the National 
Academy of Sciences has concluded, in the most recent report submitted 
under section 705 or 706 respectively, that the United States will not 
achieve the necessary domestic greenhouse gas emissions reductions, or 
that global actions will not maintain safe global average surface 
temperature and atmospheric greenhouse gas concentration thresholds, 
the President shall, not later than July 1, 2015, and every 4 years 
thereafter, submit to Congress a plan identifying domestic and 
international actions that will achieve necessary additional greenhouse 
gas reductions, including any recommendations for legislative action.

       ``PART B--DESIGNATION AND REGISTRATION OF GREENHOUSE GASES

``SEC. 711. DESIGNATION OF GREENHOUSE GASES.

    ``(a) Greenhouse Gases.--For purposes of this title, the following 
are greenhouse gases:
            ``(1) Carbon dioxide.
            ``(2) Methane.
            ``(3) Nitrous oxide.
            ``(4) Sulfur hexafluoride.
            ``(5) Hydrofluorocarbons emitted from a chemical 
        manufacturing process at an industrial stationary source.
            ``(6) Any perfluorocarbon.
            ``(7) Nitrogen trifluoride.
            ``(8) Any other anthropogenic gas designated as a 
        greenhouse gas by the Administrator under this section.
    ``(b) Determination on Administrator's Initiative.--The 
Administrator shall, by rule--
            ``(1) determine whether 1 metric ton of another 
        anthropogenic gas makes the same or greater contribution to 
        global warming over 100 years as 1 metric ton of carbon 
        dioxide;
            ``(2) determine the carbon dioxide equivalent value for 
        each gas with respect to which the Administrator makes an 
        affirmative determination under paragraph (1);
            ``(3) for each gas with respect to which the Administrator 
        makes an affirmative determination under paragraph (1) and that 
        is used as a substitute for a class I or class II substance 
        under title VI, determine the extent to which to regulate that 
        gas under section 619 and specify appropriate compliance 
        obligations under section 619;
            ``(4) designate as a greenhouse gas for purposes of this 
        title each gas for which the Administrator makes an affirmative 
        determination under paragraph (1), to the extent that it is not 
        regulated under section 619; and
            ``(5) specify the appropriate compliance obligations under 
        this title for each gas designated as a greenhouse gas under 
        paragraph (4).
    ``(c) Petitions to Designate a Greenhouse Gas.--
            ``(1) In general.--Any person may petition the 
        Administrator to designate as a greenhouse gas any 
        anthropogenic gas 1 metric ton of which makes the same or 
        greater contribution to global warming over 100 years as 1 
        metric ton of carbon dioxide.
            ``(2) Contents of petition.--The petitioner shall provide 
        sufficient data, as specified by rule by the Administrator, to 
        demonstrate that the gas is likely to be designated as a 
        greenhouse gas and is likely to be produced, imported, used, or 
        emitted in the United States. To the extent practicable, the 
        petitioner shall also identify producers, importers, 
        distributors, users, and emitters of the gas in the United 
        States.
            ``(3) Review and action by the administrator.--Not later 
        than 90 days after receipt of a petition under paragraph (2), 
        the Administrator shall determine whether the petition is 
        complete and notify the petitioner and the public of the 
        decision.
            ``(4) Additional information.--The Administrator may 
        require producers, importers, distributors, users, or emitters 
        of the gas to provide information on the contribution of the 
        gas to global warming over 100 years compared to carbon 
        dioxide.
            ``(5) Treatment of petition.--For any substance used as a 
        substitute for a class I or class II substance under title VI, 
        the Administrator may elect to treat a petition under this 
        subsection as a petition to list the substance as a class II, 
        group II substance under section 619, and may require the 
        petition to be amended to address listing criteria promulgated 
        under that section.
            ``(6) Determination.--Not later than 2 years after receipt 
        of a complete petition, the Administrator shall, after notice 
        and an opportunity for comment--
                    ``(A) issue and publish in the Federal Register--
                            ``(i) a determination that 1 metric ton of 
                        the gas does not make a contribution to global 
                        warming over 100 years that is equal to or 
                        greater than that made by 1 metric ton of 
                        carbon dioxide; and
                            ``(ii) an explanation of the decision; or
                    ``(B) determine that 1 metric ton of the gas makes 
                a contribution to global warming over 100 years that is 
                equal to or greater than that made by 1 metric ton of 
                carbon dioxide, and take the actions described in 
                subsection (b) with respect to such gas.
            ``(7) Grounds for denial.--The Administrator may not deny a 
        petition under this subsection solely on the basis of 
        inadequate Environmental Protection Agency resources or time 
        for review.
    ``(d) Science Advisory Board Consultation.--
            ``(1) Consultation.--The Administrator shall--
                    ``(A) give notice to the Science Advisory Board 
                prior to making a determination under subsection 
                (b)(1), (c)(6), or (e)(2)(B);
                    ``(B) consider the written recommendations of the 
                Science Advisory Board under paragraph (2) regarding 
                the determination; and
                    ``(C) consult with the Science Advisory Board 
                regarding such determination, including consultation 
                subsequent to receipt of such written recommendations.
            ``(2) Formulation of recommendations.--Upon receipt of 
        notice under paragraph (1)(A) regarding a pending determination 
        under subsection (b)(1), (c)(6), or (e)(2)(B), the Science 
        Advisory Board shall--
                    ``(A) formulate recommendations regarding such 
                determination, subject to a peer review process; and
                    ``(B) submit such recommendations in writing to the 
                Administrator.
    ``(e) Manufacturing and Emission Notices.--
            ``(1) Notice requirement.--
                    ``(A) In general.--Effective 24 months after the 
                date of enactment of this title, no person may 
                manufacture or introduce into interstate commerce a 
                fluorinated gas, or emit a significant quantity, as 
                determined by the Administrator, of any fluorinated gas 
                that is generated as a byproduct during the production 
                or use of another fluorinated gas, unless--
                            ``(i) the gas is designated as a greenhouse 
                        gas under this section or is an ozone-depleting 
                        substance listed as a class I or class II 
                        substance under title VI;
                            ``(ii) the Administrator has determined 
                        that 1 metric ton of such gas does not make a 
                        contribution to global warming over 100 years 
                        that is equal to or greater than that made by 1 
                        metric ton of carbon dioxide; or
                            ``(iii) the person manufacturing or 
                        importing the gas for distribution into 
                        interstate commerce, or emitting the gas, has 
                        submitted to the Administrator, at least 90 
                        days before the start of such manufacture, 
                        introduction into commerce, or emission, a 
                        notice of such person's manufacture, 
                        introduction into commerce, or emission of such 
                        gas, and the Administrator has not determined 
                        that that notice or a substantially similar 
                        notice submitted by that person is incomplete.
                    ``(B) Alternative compliance.--For a gas that is a 
                substitute for a class I or class II substance under 
                title VI and either has been listed as acceptable for 
                use under section 612 or is currently subject to 
                evaluation under section 612, the Administrator may 
                accept the notice and information provided pursuant to 
                that section as fulfilling the obligation under clause 
                (iii) of subparagraph (A).
            ``(2) Review and action by the administrator.--
                    ``(A) Completeness.--Not later than 90 days after 
                receipt of notice under paragraph (1)(A)(iii) or (B), 
                the Administrator shall determine whether the notice is 
                complete.
                    ``(B) Determination.-- If the Administrator 
                determines that the notice is complete, the 
                Administrator shall, after notice and an opportunity 
                for comment, not later than 12 months after receipt of 
                the notice--
                            ``(i) issue and publish in the Federal 
                        Register--
                                    ``(I) a determination that 1 metric 
                                ton of the gas does not make a 
                                contribution to global warming over 100 
                                years that is equal to or greater than 
                                that made by 1 metric ton of carbon 
                                dioxide; and
                                    ``(II) an explanation of the 
                                decision; or
                            ``(ii) determine that 1 metric ton of the 
                        gas makes a contribution to global warming over 
                        100 years that is equal to or greater than that 
                        made by 1 metric ton of carbon dioxide, and 
                        take the actions described in subsection (b) 
                        with respect to such gas.
    ``(f) Regulations.--Not later than one year after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to carry out this section. Such regulations shall include--
            ``(1) requirements for the contents of a petition submitted 
        under subsection (c);
            ``(2) requirements for the contents of a notice required 
        under subsection (e); and
            ``(3) methods and standards for evaluating the carbon 
        dioxide equivalent value of a gas.
    ``(g) Gases Regulated Under Title VI.--The Administrator shall not 
designate a gas as a greenhouse gas under this section to the extent 
that the gas is regulated under title VI.
    ``(h) Savings Clause.--Nothing in this section shall be interpreted 
to relieve any person from complying with the requirements of section 
612.

``SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF GREENHOUSE GASES.

    ``(a) Measure of Quantity of Greenhouse Gases.--Any provision of 
this title or title VIII that refers to a quantity or percentage of a 
quantity of greenhouse gases shall mean the quantity or percentage of 
the greenhouse gases expressed in carbon dioxide equivalents.
    ``(b) Initial Value.--Except as provided by the Administrator under 
this section or section 711--
            ``(1) the carbon dioxide equivalent value of greenhouse 
        gases for purposes of this Act shall be as follows:

                         ``CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED GREENHOUSE GASES
----------------------------------------------------------------------------------------------------------------
              Greenhouse gas (1 metric ton)                       Carbon dioxide equivalent (metric tons)
----------------------------------------------------------------------------------------------------------------
Carbon dioxide                                            1
----------------------------------------------------------------------------------------------------------------
Methane                                                   25
----------------------------------------------------------------------------------------------------------------
Nitrous oxide                                             298
----------------------------------------------------------------------------------------------------------------
HFC-23                                                    14,800
----------------------------------------------------------------------------------------------------------------
HFC-125                                                   3,500
----------------------------------------------------------------------------------------------------------------
HFC-134a                                                  1,430
----------------------------------------------------------------------------------------------------------------
HFC-143a                                                  4,470
----------------------------------------------------------------------------------------------------------------
HFC-152a                                                  124
----------------------------------------------------------------------------------------------------------------
HFC-227ea                                                 3,220
----------------------------------------------------------------------------------------------------------------
HFC-236fa                                                 9,810
----------------------------------------------------------------------------------------------------------------
HFC-4310mee                                               1,640
----------------------------------------------------------------------------------------------------------------
CF4                                                       7,390
----------------------------------------------------------------------------------------------------------------
C2F6                                                      12,200
----------------------------------------------------------------------------------------------------------------
C4F10                                                     8,860
----------------------------------------------------------------------------------------------------------------
C6F14                                                     9,300
----------------------------------------------------------------------------------------------------------------
SF6                                                       22,800
----------------------------------------------------------------------------------------------------------------
NF3                                                       17,200
----------------------------------------------------------------------------------------------------------------

        ; and
            ``(2) the carbon dioxide equivalent value for purposes of 
        this Act for any greenhouse gas not listed in the table under 
        paragraph (1) shall be the 100-year Global Warming Potentials 
        provided in the Intergovernmental Panel on Climate Change 
        Fourth Assessment Report.
    ``(c) Periodic Review.--
            ``(1) Not later than February 1, 2017, and (except as 
        provided in paragraph (3)) not less than every 5 years 
        thereafter, the Administrator shall--
                    ``(A) review and, if appropriate, revise the carbon 
                dioxide equivalent values established under this 
                section or section 711(b)(2), based on a determination 
                of the number of metric tons of carbon dioxide that 
                makes the same contribution to global warming over 100 
                years as 1 metric ton of each greenhouse gas; and
                    ``(B) publish in the Federal Register the results 
                of that review and any revisions.
            ``(2) A revised determination published in the Federal 
        Register under paragraph (1)(B) shall take effect for 
        greenhouse gas emissions starting on January 1 of the first 
        calendar year starting at least 9 months after the date on 
        which the revised determination was published.
            ``(3) The Administrator may decrease the frequency of 
        review and revision under paragraph (1) if the Administrator 
        determines that such decrease is appropriate in order to 
        synchronize such review and revision with any similar review 
        process carried out pursuant to the United Nations Framework 
        Convention on Climate Change, done at New York on May 9, 1992, 
        or to an agreement negotiated under that convention, except 
        that in no event shall the Administrator carry out such review 
        and revision any less frequently than every 10 years.
    ``(d) Methodology.--In setting carbon dioxide equivalent values, 
for purposes of this section or section 711, the Administrator shall 
take into account publications by the Intergovernmental Panel on 
Climate Change or a successor organization under the auspices of the 
United Nations Environmental Programme and the World Meteorological 
Organization.

``SEC. 713. GREENHOUSE GAS REGISTRY.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Climate registry.--The term `Climate Registry' means 
        the greenhouse gas emissions registry jointly established and 
        managed by more than 40 States and Indian tribes in 2007 to 
        collect high-quality greenhouse gas emission data from 
        facilities, corporations, and other organizations to support 
        various greenhouse gas emission reporting and reduction 
        policies for the member States and Indian tribes.
            ``(2) Reporting entity.--The term `reporting entity' 
        means--
                    ``(A) a covered entity;
                    ``(B) an entity that--
                            ``(i) would be a covered entity if it had 
                        emitted, produced, imported, manufactured, or 
                        delivered in 2008 or any subsequent year more 
                        than the applicable threshold level in the 
                        definition of covered entity in paragraph (13) 
                        of section 700; and
                            ``(ii) has emitted, produced, imported, 
                        manufactured, or delivered in 2008 or any 
                        subsequent year more than the applicable 
                        threshold level in the definition of covered 
                        entity in paragraph (13) of section 700, 
                        provided that the figure of 25,000 tons of 
                        carbon dioxide equivalent is read instead as 
                        10,000 tons of carbon dioxide equivalent and 
                        the figure of 460,000,000 cubic feet is read 
                        instead as 184,000,000 cubic feet;
                    ``(C) any other entity that emits a greenhouse gas, 
                or produces, imports, manufactures, or delivers 
                material whose use results or may result in greenhouse 
                gas emissions if the Administrator determines that 
                reporting under this section by such entity will help 
                achieve the purposes of this title or title VIII;
                    ``(D) any vehicle fleet with emissions of more than 
                25,000 tons of carbon dioxide equivalent on an annual 
                basis, if the Administrator determines that the 
                inclusion of such fleet will help achieve the purposes 
                of this title or title VIII; or
                    ``(E) any entity that delivers electricity to a 
                facility in an energy-intensive industrial sector that 
                meets the energy or greenhouse gas intensity criteria 
                in section 764(b)(2)(A)(i).
    ``(b) Regulations.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this title, the Administrator shall issue 
        regulations establishing a Federal greenhouse gas registry. 
        Such regulations shall--
                    ``(A) require reporting entities to submit to the 
                Administrator data on--
                            ``(i) greenhouse gas emissions in the 
                        United States;
                            ``(ii) the production and manufacture in 
                        the United States, importation into the United 
                        States, and, at the discretion of the 
                        Administrator, exportation from the United 
                        States, of fuels and industrial gases the uses 
                        of which result or may result in greenhouse gas 
                        emissions;
                            ``(iii) deliveries in the United States of 
                        natural gas, and any other gas meeting the 
                        specifications for commingling with natural gas 
                        for purposes of delivery, the combustion of 
                        which result or may result in greenhouse gas 
                        emissions; and
                            ``(iv) the capture and sequestration of 
                        greenhouse gases;
                    ``(B) require covered entities and, where 
                appropriate, other reporting entities to submit to the 
                Administrator data sufficient to ensure compliance with 
                or implementation of the requirements of this title;
                    ``(C) require reporting of electricity delivered to 
                facilities in an energy-intensive industrial sector 
                that meets the energy or greenhouse gas intensity 
                criteria in section 764(b)(2)(A)(i);
                    ``(D) ensure the completeness, consistency, 
                transparency, accuracy, precision, and reliability of 
                such data;
                    ``(E) take into account the best practices from the 
                most recent Federal, State, tribal, and international 
                protocols for the measurement, accounting, reporting, 
                and verification of greenhouse gas emissions, including 
                protocols from the Climate Registry and other mandatory 
                State or multistate authorized programs;
                    ``(F) take into account the latest scientific 
                research;
                    ``(G) require that, for covered entities with 
                respect to greenhouse gases to which section 722 
                applies, and, to the extent determined to be 
                appropriate by the Administrator, for covered entities 
                with respect to other greenhouse gases and for other 
                reporting entities, submitted data are based on--
                            ``(i) continuous monitoring systems for 
                        fuel flow or emissions, such as continuous 
                        emission monitoring systems;
                            ``(ii) alternative systems that are 
                        demonstrated as providing data with the same 
                        precision, reliability, accessibility, and 
                        timeliness, or, to the extent the Administrator 
                        determines is appropriate for reporting small 
                        amounts of emissions, the same precision, 
                        reliability, and accessibility and similar 
                        timeliness, as data provided by continuous 
                        monitoring systems for fuel flow or emissions; 
                        or
                            ``(iii) alternative methodologies that are 
                        demonstrated to provide data with precision, 
                        reliability, accessibility, and timeliness, or, 
                        to the extent the Administrator determines is 
                        appropriate for reporting small amounts of 
                        emissions, precision, reliability, and 
                        accessibility, as similar as is technically 
                        feasible to that of data generally provided by 
                        continuous monitoring systems for fuel flow or 
                        emissions, if the Administrator determines 
                        that, with respect to a reporting entity, there 
                        is no continuous monitoring system or 
                        alternative system described in clause (i) or 
                        (ii) that is technically feasible;
                    ``(H) require that the Administrator, in 
                determining the extent to which the requirement to use 
                systems or methodologies in accordance with 
                subparagraph (G) is appropriate for reporting entities 
                other than covered entities or for greenhouse gases to 
                which section 722 does not apply, consider the cost of 
                using such systems and methodologies, and of using 
                other systems and methodologies that are available and 
                suitable, for quantifying the emissions involved in 
                light of the purposes of this title, including the goal 
                of collecting consistent entity-wide data;
                    ``(I) include methods for minimizing double 
                reporting and avoiding irreconcilable double reporting 
                of greenhouse gas emissions;
                    ``(J) establish measurement protocols for carbon 
                capture and sequestration systems, taking into 
                consideration the regulations promulgated under section 
                813;
                    ``(K) require that reporting entities provide the 
                data required under this paragraph in reports submitted 
                electronically to the Administrator, in such form and 
                containing such information as may be required by the 
                Administrator;
                    ``(L) include requirements for keeping records 
                supporting or related to, and protocols for auditing, 
                submitted data;
                    ``(M) establish consistent policies for calculating 
                carbon content and greenhouse gas emissions for each 
                type of fossil fuel with respect to which reporting is 
                required;
                    ``(N) subsequent to implementation of policies 
                developed under subparagraph (M), provide for immediate 
                dissemination, to States, Indian tribes, and on the 
                Internet, of all data reported under this section as 
                soon as practicable after electronic audit by the 
                Administrator and any resulting correction of data, 
                except that data shall not be disseminated under this 
                subparagraph if--
                            ``(i) its nondissemination is vital to the 
                        national security of the United States, as 
                        determined by the President; or
                            ``(ii) it is confidential business 
                        information that cannot be derived from 
                        information that is otherwise publicly 
                        available and that would cause significant 
                        calculable competitive harm if published, 
                        except that--
                                    ``(I) data relating to greenhouse 
                                gas emissions, including any upstream 
                                or verification data from reporting 
                                entities, shall not be considered to be 
                                confidential business information; and
                                    ``(II) data that is confidential 
                                business information shall be provided 
                                to a State or Indian tribe within whose 
                                jurisdiction the reporting entity is 
                                located, if the Administrator 
                                determines that such State or Indian 
                                tribe has in effect protections for 
                                confidential business information that 
                                are at least as protective as 
                                protections applicable to the Federal 
                                Government;
                    ``(O) prescribe methods by which the Administrator 
                shall, in cases in which satisfactory data are not 
                submitted to the Administrator for any period of time, 
                estimate emission, production, importation, 
                manufacture, or delivery levels--
                            ``(i) for covered entities with respect to 
                        greenhouse gas emissions, production, 
                        importation, manufacture, or delivery regulated 
                        under this title to ensure that emissions, 
                        production, importation, manufacture, or 
                        deliveries are not underreported, and to create 
                        a strong incentive for meeting data monitoring 
                        and reporting requirements--
                                    ``(I) with a conservative estimate 
                                of the highest emission, production, 
                                importation, manufacture, or delivery 
                                levels that may have occurred during 
                                the period for which data are missing; 
                                or
                                    ``(II) to the extent the 
                                Administrator considers appropriate, 
                                with an estimate of such levels 
                                assuming the unit is emitting, 
                                producing, importing, manufacturing, or 
                                delivering at a maximum potential level 
                                during the period, in order to ensure 
                                that such levels are not underreported 
                                and to create a strong incentive for 
                                meeting data monitoring and reporting 
                                requirements; and
                            ``(ii) for covered entities with respect to 
                        greenhouse gas emissions to which section 722 
                        does not apply and for other reporting 
                        entities, with a reasonable estimate of the 
                        emission, production, importation, manufacture, 
                        or delivery levels that may have occurred 
                        during the period for which data are missing;
                    ``(P) require the designation of a designated 
                representative for each reporting entity;
                    ``(Q) require an appropriate certification, by the 
                designated representative for the reporting entity, of 
                accurate and complete accounting of greenhouse gas 
                emissions, as determined by the Administrator; and
                    ``(R) include requirements for other data necessary 
                for accurate and complete accounting of greenhouse gas 
                emissions, as determined by the Administrator, 
                including data for quality assurance of monitoring 
                systems, monitors and other measurement devices, and 
                other data needed to verify reported emissions, 
                production, importation, manufacture, or delivery.
            ``(2) Timing.--
                    ``(A) Calendar years 2007 through 2010.--For a base 
                period of calendar years 2007 through 2010, each 
                reporting entity shall submit annual data required 
                under this section to the Administrator not later than 
                March 31, 2011. The Administrator may waive or modify 
                reporting requirements for calendar years 2007 through 
                2010 for categories of reporting entities to the extent 
                that the Administrator determines that the reporting 
                entities did not keep data or records necessary to meet 
                reporting requirements. The Administrator may, in 
                addition to or in lieu of such requirements, collect 
                information on energy consumption and production.
                    ``(B) Subsequent calendar years.--For calendar year 
                2011 and each subsequent calendar year, each reporting 
                entity shall submit quarterly data required under this 
                section to the Administrator not later than 60 days 
                after the end of the applicable quarter, except when 
                the data is already being reported to the Administrator 
                on an earlier timeframe for another program.
            ``(3) Waiver of reporting requirements.--The Administrator 
        may waive reporting requirements under this section for 
        specific entities to the extent that the Administrator 
        determines that sufficient and equally or more reliable 
        verified and timely data are available to the Administrator and 
        the public on the Internet under other mandatory statutory 
        requirements.
            ``(4) Alternative threshold.--The Administrator may, by 
        rule, establish applicability thresholds for reporting under 
        this section using alternative metrics and levels, provided 
        that such metrics and levels are easier to administer and cover 
        the same size and type of sources as the threshold defined in 
        this section.
    ``(c) Interrelationship With Other Systems.--In developing the 
regulations issued under subsection (b), the Administrator shall take 
into account the work done by the Climate Registry and other mandatory 
State or multistate programs. Such regulations shall include an 
explanation of any major differences in approach between the system 
established under the regulations and such registries and programs.

                        ``PART C--PROGRAM RULES

``SEC. 721. EMISSION ALLOWANCES.

    ``(a) In General.--The Administrator shall establish a separate 
quantity of emission allowances for each calendar year starting in 
2012, in the amounts prescribed under subsection (e).
    ``(b) Identification Numbers.--The Administrator shall assign to 
each emission allowance established under subsection (a) a unique 
identification number that includes the vintage year for that emission 
allowance.
    ``(c) Legal Status of Emission Allowances.--
            ``(1) In general.--An allowance established by the 
        Administrator under this title does not constitute a property 
        right, nor does any credit or other instrument established or 
        issued under the American Clean Energy and Security Act of 
        2009, and the amendments made thereby, for the purpose of 
        demonstrating compliance with this title.
            ``(2) Termination or limitation.--Nothing in this Act or 
        any other provision of law shall be construed to limit or alter 
        the authority of the United States, including the Administrator 
        acting pursuant to statutory authority, to terminate or limit 
        allowances or offset credits.
            ``(3) Other provisions unaffected.--Except as otherwise 
        specified in this Act, nothing in this Act relating to 
        allowances or offset credits established or issued under this 
        title shall affect the application of any other provision of 
        law to a covered entity, or the responsibility for a covered 
        entity to comply with any such provision of law.
    ``(d) Savings Provision.--Nothing in this part shall be construed 
as requiring a change of any kind in any State law regulating electric 
utility rates and charges, or as affecting any State law regarding such 
State regulation, or as limiting State regulation (including any 
prudency review) under such a State law. Nothing in this part shall be 
construed as modifying the Federal Power Act or as affecting the 
authority of the Federal Energy Regulatory Commission under that Act. 
Nothing in this part shall be construed to interfere with or impair any 
program for competitive bidding for power supply in a State in which 
such program is established.
    ``(e) Allowances for Each Calendar Year.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        number of emission allowances established by the Administrator 
        under subsection (a) for each calendar year shall be as 
        provided in the following table:

----------------------------------------------------------------------------------------------------------------
                    ``Calendar year                                 Emission allowances (in millions)
----------------------------------------------------------------------------------------------------------------
2012                                                     4,627
----------------------------------------------------------------------------------------------------------------
2013                                                     4,544
----------------------------------------------------------------------------------------------------------------
2014                                                     5,099
----------------------------------------------------------------------------------------------------------------
2015                                                     5,003
----------------------------------------------------------------------------------------------------------------
2016                                                     5,482
----------------------------------------------------------------------------------------------------------------
2017                                                     5,375
----------------------------------------------------------------------------------------------------------------
2018                                                     5,269
----------------------------------------------------------------------------------------------------------------
2019                                                     5,162
----------------------------------------------------------------------------------------------------------------
2020                                                     5,056
----------------------------------------------------------------------------------------------------------------
2021                                                     4,903
----------------------------------------------------------------------------------------------------------------
2022                                                     4,751
----------------------------------------------------------------------------------------------------------------
2023                                                     4,599
----------------------------------------------------------------------------------------------------------------
2024                                                     4,446
----------------------------------------------------------------------------------------------------------------
2025                                                     4,294
----------------------------------------------------------------------------------------------------------------
2026                                                     4,142
----------------------------------------------------------------------------------------------------------------
2027                                                     3,990
----------------------------------------------------------------------------------------------------------------
2028                                                     3,837
----------------------------------------------------------------------------------------------------------------
2029                                                     3,685
----------------------------------------------------------------------------------------------------------------
2030                                                     3,533
----------------------------------------------------------------------------------------------------------------
2031                                                     3,408
----------------------------------------------------------------------------------------------------------------
2032                                                     3,283
----------------------------------------------------------------------------------------------------------------
2033                                                     3,158
----------------------------------------------------------------------------------------------------------------
2034                                                     3,033
----------------------------------------------------------------------------------------------------------------
2035                                                     2,908
----------------------------------------------------------------------------------------------------------------
2036                                                     2,784
----------------------------------------------------------------------------------------------------------------
2037                                                     2,659
----------------------------------------------------------------------------------------------------------------
2038                                                     2,534
----------------------------------------------------------------------------------------------------------------
2039                                                     2,409
----------------------------------------------------------------------------------------------------------------
2040                                                     2,284
----------------------------------------------------------------------------------------------------------------
2041                                                     2,159
----------------------------------------------------------------------------------------------------------------
2042                                                     2,034
----------------------------------------------------------------------------------------------------------------
2043                                                     1,910
----------------------------------------------------------------------------------------------------------------
2044                                                     1,785
----------------------------------------------------------------------------------------------------------------
2045                                                     1,660
----------------------------------------------------------------------------------------------------------------
2046                                                     1,535
----------------------------------------------------------------------------------------------------------------
2047                                                     1,410
----------------------------------------------------------------------------------------------------------------
2048                                                     1,285
----------------------------------------------------------------------------------------------------------------
2049                                                     1,160
----------------------------------------------------------------------------------------------------------------
2050 and each year thereafter                            1,035
----------------------------------------------------------------------------------------------------------------

            ``(2) Revision.--
                    ``(A) In general.--The Administrator may adjust, in 
                accordance with subparagraph (B), the number of 
                emission allowances established pursuant to paragraph 
                (1) if, after notice and an opportunity for public 
                comment, the Administrator determines that--
                            ``(i) United States greenhouse gas 
                        emissions in 2005 were other than 7,206 million 
                        metric tons carbon dioxide equivalent;
                            ``(ii) if the requirements of this title 
                        for 2012 had been in effect in 2005, section 
                        722 would have required emission allowances to 
                        be held for other than 66.2 percent of United 
                        States greenhouse gas emissions in 2005;
                            ``(iii) if the requirements of this title 
                        for 2014 had been in effect in 2005, section 
                        722 would have required emission allowances to 
                        be held for other than 75.7 percent of United 
                        States greenhouse gas emissions in 2005; or
                            ``(iv) if the requirements of this title 
                        for 2016 had been in effect in 2005, section 
                        722 would have required emission allowances to 
                        be held for other than 84.5 percent United 
                        States greenhouse gas emissions in 2005.
                    ``(B) Adjustment formula.--
                            ``(i) In general.--If the Administrator 
                        adjusts under this paragraph the number of 
                        emission allowances established pursuant to 
                        paragraph (1), the number of emission 
                        allowances the Administrator establishes for 
                        any given calendar year shall equal the product 
                        of--
                                    ``(I) United States greenhouse gas 
                                emissions in 2005, expressed in tons of 
                                carbon dioxide equivalent;
                                    ``(II) the percent of United States 
                                greenhouse gas emissions in 2005, 
                                expressed in tons of carbon dioxide 
                                equivalent, that would have been 
                                subject to section 722 if the 
                                requirements of this title for the 
                                given calendar year had been in effect 
                                in 2005; and
                                    ``(III) the percentage set forth 
                                for that calendar year in section 
                                703(a), or determined under clause (ii) 
                                of this subparagraph.
                            ``(ii) Targets.--In applying the portion of 
                        the formula in clause (i)(III) of this 
                        subparagraph, for calendar years for which a 
                        percentage is not listed in section 703(a), the 
                        Administrator shall use a uniform annual 
                        decline in the amount of emissions between the 
                        years that are specified.
                            ``(iii) Carbon dioxide equivalent value.--
                        If the Administrator adjusts under this 
                        paragraph the number of emission allowances 
                        established pursuant to paragraph (1), the 
                        Administrator shall use the carbon dioxide 
                        equivalent values established pursuant to 
                        section 712.
                            ``(iv) Limitation on adjustment timing.--
                        Once a calendar year has started, the 
                        Administrator may not adjust the number of 
                        emission allowances to be established for that 
                        calendar year.
                    ``(C) Limitation on adjustment authority.--The 
                Administrator may adjust under this paragraph the 
                number of emission allowances to be established 
                pursuant to paragraph (1) only once.
    ``(f) Compensatory Allowance.--
            ``(1) In general.--The regulations promulgated under 
        subsection (h) shall provide for the establishment and 
        distribution of compensatory allowances for--
                    ``(A) the destruction, in 2012 or later, of 
                fluorinated gases that are greenhouse gases if--
                            ``(i) allowances or offset credits were 
                        retired for their production or importation; 
                        and
                            ``(ii) such gases are not required to be 
                        destroyed under any other provision of law;
                    ``(B) the nonemissive use, in 2012 or later, of 
                petroleum-based or coal-based liquid or gaseous fuel, 
                petroleum coke, natural gas liquid, or natural gas as a 
                feedstock, if allowances or offset credits were retired 
                for the greenhouse gases that would have been emitted 
                from their combustion; and
                    ``(C) the conversionary use, in 2012 or later, of 
                fluorinated gases in a manufacturing process, including 
                semiconductor research or manufacturing, if allowances 
                or offset credits were retired for the production or 
                importation of such gas.
            ``(2) Establishment and distribution.--
                    ``(A) In general.--Not later than 90 days after the 
                end of each calendar year, the Administrator shall 
                establish and distribute to the entity taking the 
                actions described in subparagraph (A), (B), or (C) of 
                paragraph (1) a quantity of compensatory allowances 
                equivalent to the number of tons of carbon dioxide 
                equivalent of avoided emissions achieved through such 
                actions. In establishing the quantity of compensatory 
                allowances, the Administrator shall take into account 
                the carbon dioxide equivalent value of any greenhouse 
                gas resulting from such action.
                    ``(B) Source of allowances.--Compensatory 
                allowances established under this subsection shall not 
                be emission allowances established under subsection 
                (a).
                    ``(C) Identification numbers.--The Administrator 
                shall assign to each compensatory allowance established 
                under subparagraph (A) a unique identification number.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) the term `destruction' means the conversion 
                of a greenhouse gas by thermal, chemical, or other 
                means to another gas or set of gases with little or no 
                carbon dioxide equivalent value;
                    ``(B) the term `nonemissive use' means the use of 
                fossil fuel as a feedstock in an industrial or 
                manufacturing process to the extent that greenhouse 
                gases are not emitted from such process, and to the 
                extent that the products of such process are not 
                intended for use as, or to be contained in, a fuel; and
                    ``(C) the term `conversionary use' means the 
                conversion during research or manufacturing of a 
                fluorinated gas into another greenhouse gas or set of 
                gases with a lower carbon dioxide equivalent value.
            ``(4) Feedstock emissions study.--
                    ``(A) The Administrator may conduct a study to 
                determine the extent to which petroleum-based or coal-
                based liquid or gaseous fuel, petroleum coke, natural 
                gas liquid, or natural gas are used as feedstocks in 
                manufacturing processes to produce products and the 
                greenhouse gas emissions resulting from such uses.
                    ``(B) If as a result of such a study, the 
                Administrator determines that the use of such products 
                by noncovered sources results in substantial emissions 
                of greenhouse gases and that such emissions have not 
                been adequately addressed under other requirements of 
                this Act, the Administrator may, after notice and 
                comment rulemaking, promulgate a regulation reducing 
                compensatory allowances commensurately if doing so will 
                not result in shifting such emissions to noncovered 
                sources.
    ``(g) Fluorinated Gases Assessment.--No later than March 31, 2014, 
the Administrator shall complete an assessment of the regulation of 
non-HFC fluorinated gases under this title to determine whether the 
most appropriate point of regulation is at the gas manufacturer or 
importer level, or at the source of emissions downstream. If the 
Administrator determines, based on consideration of environmental 
effectiveness, cost effectiveness, administrative feasibility, extent 
of coverage of emissions, competitiveness and other relevant 
considerations consistent with the purposes of this title, that 
emissions of non-HFC fluorinated gases can best be regulated by 
designating downstream emission sources as covered entities with 
compliance obligations under section 722, the Administrator shall, 
after notice and comment rulemaking, change the definition of covered 
entity and the compliance obligations under section 722 with respect to 
non-HFC fluorinated gases accordingly, consistent with the purposes of 
this title, and establish such other requirements as are necessary to 
ensure compliance for such entities with the requirements of this 
title.
    ``(h) Regulations.--Not later than 24 months after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to carry out the provisions of this title.

``SEC. 722. PROHIBITION OF EXCESS EMISSIONS.

    ``(a) Prohibition.--Except as provided in subsection (c), effective 
January 1, 2012, each covered entity is prohibited from emitting 
greenhouse gases and having attributable greenhouse gas emissions, in 
combination, in excess of its allowable emissions level. A covered 
entity's allowable emissions level for each calendar year is the number 
of emission allowances (or credits or other allowances as provided in 
subsection (d)) it holds as of 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection (j)) of the following 
calendar year.
    ``(b) Methods of Demonstrating Compliance.--Except as otherwise 
provided in this section, the owner or operator of a covered entity 
shall not be considered to be in compliance with the prohibition in 
subsection (a) unless, as of 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection (j)) of each calendar 
year starting in 2013, the owner or operator holds a quantity of 
emission allowances (or credits or other allowances as provided in 
subsection (d)) at least as great as the quantity calculated as 
follows:
            ``(1) Electricity sources.--For a covered entity described 
        in section 700(13)(A), 1 emission allowance for each ton of 
        carbon dioxide equivalent of greenhouse gas that such covered 
        entity emitted in the previous calendar year, excluding 
        emissions resulting from the combustion of--
                    ``(A) petroleum-based or coal-based liquid fuel;
                    ``(B) natural gas liquid;
                    ``(C) renewable biomass or gas derived from 
                renewable biomass; or
                    ``(D) petroleum coke or gas derived from petroleum 
                coke.
            ``(2) Fuel producers and importers.--For a covered entity 
        described in section 700(13)(B), 1 emission allowance for each 
        ton of carbon dioxide equivalent of greenhouse gas that would 
        be emitted from the combustion of any petroleum-based or coal-
        based liquid fuel, petroleum coke, or natural gas liquid, 
        produced or imported by such covered entity during the previous 
        calendar year for sale or distribution in interstate commerce, 
        assuming no capture and sequestration of any greenhouse gas 
        emissions.
            ``(3) Industrial gas producers and importers.--For a 
        covered entity described in section 700(13)(C), 1 emission 
        allowance for each ton of carbon dioxide equivalent of fossil 
        fuel-based carbon dioxide, nitrous oxide, or any other 
        fluorinated gas that is a greenhouse gas (except for nitrogen 
        trifluoride), or any combination thereof, produced or imported 
        by such covered entity during the previous calendar year for 
        sale or distribution in interstate commerce.
            ``(4) Nitrogen trifluoride sources.--For a covered entity 
        described in section 700(13)(D), 1 emission allowance for each 
        ton of carbon dioxide equivalent of nitrogen trifluoride that 
        such covered entity emitted in the previous calendar year.
            ``(5) Geological sequestration sites.--For a covered entity 
        described in section 700(13)(E), 1 emission allowance for each 
        ton of carbon dioxide equivalent of greenhouse gas that such 
        covered entity emitted in the previous calendar year.
            ``(6) Industrial stationary sources.--For a covered entity 
        described in section 700(13)(F), (G), or (H), 1 emission 
        allowance for each ton of carbon dioxide equivalent of 
        greenhouse gas that such covered entity emitted in the previous 
        calendar year, excluding emissions resulting from--
                    ``(A) the combustion of petroleum-based or coal-
                based liquid fuel;
                    ``(B) the combustion of natural gas liquid;
                    ``(C) the combustion of renewable biomass or gas 
                derived from renewable biomass;
                    ``(D) the combustion of petroleum coke or gas 
                derived from petroleum coke; or
                    ``(E) the use of any fluorinated gas that is a 
                greenhouse gas purchased for use at that covered 
                entity, except for nitrogen trifluoride.
            ``(7) Industrial fossil fuel-fired combustion devices.--For 
        a covered entity described in section 700(13)(I), 1 emission 
        allowance for each ton of carbon dioxide equivalent of 
        greenhouse gas that the devices emitted in the previous 
        calendar year, excluding emissions resulting from the 
        combustion of--
                    ``(A) petroleum-based or coal-based liquid fuel;
                    ``(B) natural gas liquid;
                    ``(C) renewable biomass or gas derived from 
                renewable biomass; or
                    ``(D) petroleum coke or gas derived from petroleum 
                coke.
            ``(8) Natural gas local distribution companies.--For a 
        covered entity described in section 700(13)(J), 1 emission 
        allowance for each ton of carbon dioxide equivalent of 
        greenhouse gas that would be emitted from the combustion of the 
        natural gas, and any other gas meeting the specifications for 
        commingling with natural gas for purposes of delivery, that 
        such entity delivered during the previous calendar year to 
        customers that are not covered entities, assuming no capture 
        and sequestration of that greenhouse gas.
            ``(9) Algae-based fuels.--Where carbon dioxide (or another 
        greenhouse gas) generated by a covered entity is used as an 
        input in the production of algae-based fuels, the Administrator 
        shall ensure that emission allowances are required to be held 
        either for the carbon dioxide generated by a covered entity 
        that is used to grow the algae or for the portion of the carbon 
        dioxide emitted from combustion of the fuel produced from such 
        algae that is attributable to carbon dioxide generated by a 
        covered entity, but not for both.
            ``(10) Fugitive emissions.--The greenhouse gas emissions to 
        which paragraphs (1), (4), (6), and (7) apply shall not include 
        fugitive emissions of greenhouse gas, except to the extent the 
        Administrator determines that data on the carbon dioxide 
        equivalent value of greenhouse gas in the fugitive emissions 
        can be provided with sufficient precision, reliability, 
        accessibility, and timeliness to ensure the integrity of 
        emission allowances, the allowance tracking system, and the cap 
        on emissions.
            ``(11) Export exemption.--This section shall not apply to 
        any petroleum-based or coal-based liquid fuel, petroleum coke, 
        natural gas liquid, fossil fuel-based carbon dioxide, nitrous 
        oxide, or fluorinated gas that is exported for sale or use.
            ``(12) Natural gas liquids.--For natural gas liquids, the 
        covered entity subject to the requirement stated in paragraph 
        (2) shall be the owner of the natural gas liquids at the point 
        the natural gas liquids are separated into merchantable 
        products.
            ``(13) Application of multiple paragraphs.--For a covered 
        entity to which more than 1 of paragraphs (1) through (8) 
        apply, all applicable paragraphs shall apply, except that not 
        more than 1 emission allowance shall be required for the same 
        emission.
            ``(14) Application to fractions of tons.--In applying 
        paragraphs (1) through (8), any amount less than 1 ton of 
        carbon dioxide equivalent of emissions or attributable 
        greenhouse gas emissions shall be treated as 1 ton of such 
        carbon dioxide equivalent.
    ``(c) Phase-in of Prohibition.--
            ``(1) Industrial stationary sources.--The prohibition under 
        subsection (a) shall first apply to a covered entity described 
        in section 700(13)(D), (F), (G), (H), or (I), with respect to 
        emissions occurring during calendar year 2014.
            ``(2) Natural gas local distribution companies.--The 
        prohibition under subsection (a) shall first apply to a covered 
        entity described in section 700(13)(J) with respect to 
        deliveries occurring during calendar year 2016.
    ``(d) Additional Methods.--In addition to using the method of 
compliance described in subsection (b), a covered entity may do the 
following:
            ``(1) Offset credits.--
                    ``(A) In general.--Covered entities collectively 
                may, in accordance with this paragraph, use offset 
                credits to demonstrate compliance for up to a maximum 
                of 2 billion tons of greenhouse gas emissions annually. 
                The ability to demonstrate compliance with offset 
                credits shall be divided pro rata among covered 
                entities by allowing each covered entity to satisfy a 
                percentage of the number of allowances required to be 
                held under subsection (b) to demonstrate compliance by 
                holding 1 domestic offset credit or 1.25 international 
                offset credits in lieu of an emission allowance, except 
                as provided in subparagraph (D).
                    ``(B) Applicable percentage.--The percentage 
                referred to in subparagraph (A) for a given calendar 
                year shall be determined by dividing 2 billion by the 
                sum of 2 billion plus the number of emission allowances 
                established under section 721(a) for the previous year, 
                and multiplying that number by 100. Not more than one 
                half of the applicable percentage under this paragraph 
                may be used by holding domestic offset credits, and not 
                more than one half of the applicable percentage under 
                this paragraph may be used by holding international 
                offset credits, except as provided in subparagraph (C).
                    ``(C) Modified percentages.--If the Administrator 
                determines that domestic offset credits available for 
                use in demonstrating compliance in any calendar year at 
                domestic offset prices generally equal to or less than 
                emission allowance prices, are likely to offset less 
                than 0.9 billion tons of greenhouse gas emissions 
                (measured in tons of carbon dioxide equivalents), for 
                purposes of compliance demonstration in that year the 
                Administrator shall--
                            ``(i) increase the percentage of emissions 
                        that can be offset through the use of 
                        international offset credits to reflect the 
                        amount that 1.0 billion exceeds the number of 
                        domestic offset credits the Administrator 
                        determines is available, at prices generally 
                        equal to or less than emission allowance 
                        prices, for that year, up to a maximum of 0.5 
                        billion tons of greenhouse gas emissions; and
                            ``(ii) decrease the percentage of emissions 
                        that can be offset through the use of domestic 
                        offset credits by the same amount.
                    ``(D) International offset credits.--
                Notwithstanding subparagraph (A), to demonstrate 
                compliance prior to calendar year 2018, a covered 
                entity may use 1 international offset credit in lieu of 
                an emission allowance up to the amount permitted under 
                this paragraph.
                    ``(E) President's recommendation.--The President 
                may make a recommendation to Congress as to whether the 
                number 2 billion specified in subparagraphs (A) and (B) 
                should be increased or decreased.
            ``(2) International emission allowances.--To demonstrate 
        compliance, a covered entity may hold an international emission 
        allowance in lieu of an emission allowance, except as modified 
        under section 728(d).
            ``(3) Compensatory allowances.--To demonstrate compliance, 
        a covered entity may hold a compensatory allowance obtained 
        under section 721(f) in lieu of an emission allowance.
    ``(e) Retirement of Allowances and Credits.--As soon as practicable 
after a deadline established for covered entities to demonstrate 
compliance with this title, the Administrator shall retire the quantity 
of allowances or credits required to be held under this title.
    ``(f) Alternative Metrics.--For categories of covered entities 
described in subparagraph (B), (C), (D), (G), (H), or (I) of section 
700(13), the Administrator may, by rule, establish an applicability 
threshold for inclusion under those subparagraphs using an alternative 
metric and level, provided that such metric and level are easier to 
administer and cover the same size and type of sources as the threshold 
defined in such subparagraphs.
    ``(g) Threshold Review.--For each category of covered entities 
described in subparagraph (B), (C), (D), (G), (H), or (I) of section 
700(13), the Administrator shall, in 2020 and once every 8 years 
thereafter, review the carbon dioxide equivalent emission threshold 
that is used to define covered entities in such category. After 
consideration of--
            ``(1) emissions from covered entities in such category, and 
        from other entities of the same type that emit less than the 
        threshold amount for the category (including emission sources 
        that commence operation after the date of enactment of this 
        title that are not covered entities); and
            ``(2) whether greater greenhouse gas emission reductions 
        can be cost-effectively achieved by lowering the applicable 
        threshold,
the Administrator may by rule lower such threshold to not less than 
10,000 tons of carbon dioxide equivalent emissions. In determining the 
cost effectiveness of potential reductions from lowering the threshold 
for covered entities, the Administrator shall consider alternative 
regulatory greenhouse gas programs, including setting standards under 
other titles of this Act.
    ``(h) Designated Representatives.--The regulations promulgated 
under section 721(h) shall require that each covered entity, and each 
entity holding allowances or offset credits or receiving allowances or 
offset credits from the Administrator under this title, submit to the 
Administrator a certificate of representation designating a designated 
representative.
    ``(i) Education and Outreach.--
            ``(1) In general.--The Administrator shall establish and 
        carry out a program of education and outreach to assist covered 
        entities, especially entities having little experience with 
        environmental regulatory requirements similar or comparable to 
        those under this title, in preparing to meet the compliance 
        obligations of this title. Such program shall include education 
        with respect to using markets to effectively achieve such 
        compliance.
            ``(2) Failure to receive information.--A failure to receive 
        information or assistance under this subsection may not be used 
        as a defense against an allegation of any violation of this 
        title.
    ``(j) Adjustment of Deadline.--The Administrator may, by rule, 
establish a deadline for demonstrating compliance, for a calendar year, 
later than the date provided in subsection (a), as necessary to ensure 
the availability of emissions data, but in no event shall the deadline 
be later than June 1.
    ``(k) Notice Requirement for Covered Entities Receiving Natural Gas 
From Natural Gas Local Distribution Companies.--The owner or operator 
of a covered entity that takes delivery of natural gas from a natural 
gas local distribution company shall, not later than September 1 of 
each calendar year, notify such natural gas local distribution company 
in writing that such entity will qualify as a covered entity under this 
title for that calendar year.
    ``(l) Compliance Obligation.--For purposes of this title, the year 
of a compliance obligation is the year in which compliance is 
determined, not the year in which the greenhouse gas emissions occur or 
the covered entity has attributable greenhouse gas emissions.

``SEC. 723. PENALTY FOR NONCOMPLIANCE.

    ``(a) Enforcement.--A violation of any prohibition of, requirement 
of, or regulation promulgated pursuant to this title shall be a 
violation of this Act. It shall be a violation of this Act for a 
covered entity to emit greenhouse gases and have attributable 
greenhouse gas emissions, in combination, in excess of its allowable 
emissions level as provided in section 722(a). Each ton of carbon 
dioxide equivalent for which a covered entity fails to demonstrate 
compliance under section 722 shall be a separate violation.
    ``(b) Excess Emissions Penalty.--
            ``(1) In general.--The owner or operator of any covered 
        entity that fails for any year to comply, on the deadline 
        described in section 722(a) or (j), shall be liable for payment 
        to the Administrator of an excess emissions penalty in the 
        amount described in paragraph (2).
            ``(2) Amount.--The amount of an excess emissions penalty 
        required to be paid under paragraph (1) shall be equal to the 
        product obtained by multiplying--
                    ``(A) the tons of carbon dioxide equivalent of 
                greenhouse gas emissions or attributable greenhouse gas 
                emissions for which the owner or operator of a covered 
                entity failed to demonstrate compliance under section 
                722 on the deadline; by
                    ``(B) twice the auction clearing price for the 
                earliest vintage year emission allowances in the last 
                auction carried out pursuant to section 791 before such 
                deadline.
            ``(3) Timing.--An excess emissions penalty required under 
        this subsection shall be immediately due and payable to the 
        Administrator, without demand, in accordance with regulations 
        promulgated by the Administrator, which shall be issued not 
        later than 2 years after the date of enactment of this title.
            ``(4) No effect on liability.--An excess emissions penalty 
        due and payable by the owners or operators of a covered entity 
        under this subsection shall not diminish the liability of the 
        owners or operators for any fine, penalty, or assessment 
        against the owners or operators for the same violation under 
        any other provision of this Act or any other law.
    ``(c) Excess Emissions Allowances.--The owner or operator of a 
covered entity that fails for any year to comply on the deadline 
described in section 722(a) or (j) shall be liable to offset the 
covered entity's excess combination of greenhouse gases emitted and 
attributable greenhouse gas emissions by an equal quantity of emission 
allowances during the following calendar year, or such longer period as 
the Administrator may prescribe. During the year in which the covered 
entity failed to comply, or any year thereafter, the Administrator may 
deduct the emission allowances required under this subsection to offset 
the covered entity's excess greenhouse gas emissions or attributable 
greenhouse gas emissions.

``SEC. 724. TRADING.

    ``(a) Permitted Transactions.--Except as otherwise provided in this 
title, the lawful holder of an emission allowance, compensatory 
allowance, or offset credit may, without restriction, sell, exchange, 
transfer, hold for compliance in accordance with section 722, or 
request that the Administrator retire the emission allowance, 
compensatory allowance, or offset credit.
    ``(b) No Restriction on Transactions.--The privilege of purchasing, 
holding, selling, exchanging, transferring, and requesting retirement 
of emission allowances, compensatory allowances, or offset credits 
shall not be restricted to the owners and operators of covered 
entities, except as otherwise provided in this title.
    ``(c) Effectiveness of Allowance Transfers.--No transfer of an 
allowance or offset credit shall be effective for purposes of this 
title until a certification of the transfer, signed by the designated 
representative of the transferor, is received and recorded by the 
Administrator in accordance with regulations promulgated under section 
721(h).
    ``(d) Allowance Tracking System.--The regulations promulgated under 
section 721(h) shall include a system for issuing, recording, holding, 
and tracking allowances and offset credits that shall specify all 
necessary procedures and requirements for an orderly and competitive 
functioning of the allowance and offset credit markets. Such 
regulations shall provide for appropriate publication of the 
information in the system on the Internet.

``SEC. 725. BANKING AND BORROWING.

    ``(a) Banking.--An emission allowance may be used to comply with 
section 722 or section 723 for emissions in--
            ``(1) the vintage year for the allowance; or
            ``(2) any calendar year subsequent to the vintage year for 
        the allowance.
    ``(b) Expiration.--
            ``(1) Regulations.--The Administrator may establish by 
        regulation criteria and procedures for determining whether, and 
        for implementing a determination that, the expiration of an 
        allowance or offset credit established or issued by the 
        Administrator under this title, or expiration of the ability to 
        use an international emission allowance to comply with section 
        722, is necessary to ensure the authenticity and integrity of 
        allowances or offset credits or the allowance tracking system.
            ``(2) General rule.--An allowance or offset credit 
        established or issued by the Administrator under this title 
        shall not expire unless--
                    ``(A) it is retired by the Administrator pursuant 
                to this title; or
                    ``(B) it is determined to expire or to have expired 
                by a specific date by the Administrator in accordance 
                with regulations promulgated under paragraph (1).
            ``(3) International emission allowances.--The ability to 
        use an international emission allowance to comply with section 
        722 shall not expire unless--
                    ``(A) the allowance is retired by the Administrator 
                pursuant to this title; or
                    ``(B) the ability to use such allowance to meet 
                such compliance obligation requirements is determined 
                to expire or to have expired by a specific date by the 
                Administrator in accordance with regulations 
                promulgated under paragraph (1).
    ``(c) Borrowing Future Vintage Year Allowances.--
            ``(1) Borrowing without interest.--In addition to the uses 
        described in subsection (a), an emission allowance may be used 
        to demonstrate compliance under section 722 or comply with 
        section 723 for emissions, production, importation, 
        manufacture, or deliveries in the calendar year immediately 
        preceding the vintage year for the allowance.
            ``(2) Borrowing with interest.--
                    ``(A) In general.--A covered entity may demonstrate 
                compliance under section 722 in a specific calendar 
                year for up to 15 percent of its emissions by holding 
                emission allowances with a vintage year 1 to 5 years 
                later than that calendar year.
                    ``(B) Limitations.--An emission allowance borrowed 
                pursuant to this paragraph shall be an emission 
                allowance that is established by the Administrator for 
                a specific future calendar year under section 721(a) 
                and that is held by the borrower.
                    ``(C) Prepayment of interest.--For each emission 
                allowance that an owner or operator of a covered entity 
                borrows pursuant to this paragraph, such owner or 
                operator shall, at the time it borrows the allowance, 
                hold for retirement by the Administrator, and the 
                Administrator shall retire, a quantity of emission 
                allowances that is equal to the product obtained by 
                multiplying--
                            ``(i) 0.08; by
                            ``(ii) the number of years between the 
                        calendar year in which the allowance is being 
                        used to satisfy a compliance obligation and the 
                        vintage year of the allowance.

``SEC. 726. STRATEGIC RESERVE.

    ``(a) Strategic Reserve Auctions.--
            ``(1) In general.--Once each quarter of each calendar year 
        for which allowances are established under section 721(a), the 
        Administrator shall auction strategic reserve allowances.
            ``(2) Restriction to covered entities.--In each auction 
        conducted under paragraph (1), only covered entities that the 
        Administrator expects will be required to comply with section 
        722 in the following calendar year shall be eligible to make 
        purchases.
    ``(b) Pool of Emission Allowances for Strategic Reserve Auctions.--
            ``(1) Filling the strategic reserve initially.--
                    ``(A) In general.--The Administrator shall, not 
                later than 2 years after the date of enactment of this 
                title, establish a strategic reserve account, and shall 
                place in that account an amount of emission allowances 
                established under section 721(a) for each calendar year 
                from 2012 through 2050 in the amounts specified in 
                subparagraph (B) of this paragraph.
                    ``(B) Amount.--The amount referred to in 
                subparagraph (A) shall be--
                            ``(i) for each of calendar years 2012 
                        through 2019, 1 percent of the quantity of 
                        emission allowances established for that year 
                        pursuant to section 721(e)(1);
                            ``(ii) for each of calendar years 2020 
                        through 2029, 2 percent of the quantity of 
                        emission allowances established for that year 
                        pursuant to section 721(e)(1); and
                            ``(iii) for each of calendar years 2030 
                        through 2050, 3 percent of the quantity of 
                        emission allowances established for that year 
                        pursuant to section 721(e)(1).
                    ``(C) Effect on other provisions.--Any provision in 
                this title (except for subparagraph (B) of this 
                paragraph) that refers to a quantity or percentage of 
                the emission allowances established for a calendar year 
                under section 721(a) shall be considered to refer to 
                the amount of emission allowances as determined 
                pursuant to section 721(e), less any emission 
                allowances established for that year that are placed in 
                the strategic reserve account under this paragraph.
            ``(2) Supplementing the strategic reserve.--The 
        Administrator shall also--
                    ``(A) at the end of each calendar year, transfer to 
                the strategic reserve account each emission allowance 
                that was offered for sale but not sold at any auction 
                conducted under section 791; and
                    ``(B) deposit emission allowances established under 
                subsection (g) from auction proceeds into the strategic 
                reserve, to the extent necessary to maintain the 
                reserve at its original size.
    ``(c) Minimum Strategic Reserve Auction Price.--
            ``(1) In general.--At each strategic reserve auction, the 
        Administrator shall offer emission allowances for sale 
        beginning at a minimum price per emission allowance, which 
        shall be known as the `minimum strategic reserve auction 
        price'.
            ``(2) Initial minimum strategic reserve auction prices.--
        The minimum strategic reserve auction price shall be $28 (in 
        constant 2009 dollars) for the strategic reserve auctions held 
        in 2012. For the strategic reserve auctions held in 2013 and 
        2014, the minimum strategic reserve auction price shall be the 
        strategic reserve auction price for the previous year increased 
        by 5 percent plus the rate of inflation (as measured by the 
        Consumer Price Index for All Urban Consumers).
            ``(3) Minimum strategic reserve auction price in subsequent 
        years.--For each strategic reserve auction held in 2015 and 
        each year thereafter, the minimum strategic reserve auction 
        price shall be 60 percent above a rolling 36-month average of 
        the daily closing price for that year's emission allowance 
        vintage as reported on registered carbon trading facilities, 
        calculated using constant dollars.
    ``(d) Quantity of Emission Allowances Released From the Strategic 
Reserve.--
            ``(1) Initial limits.--For each of calendar years 2012 
        through 2016, the annual limit on the number of emission 
        allowances from the strategic reserve account that may be 
        auctioned is an amount equal to 5 percent of the emission 
        allowances established for that calendar year under section 
        721(a). This limit does not apply to international offset 
        credits sold on consignment pursuant to subsection (h).
            ``(2) Limits in subsequent years.--For calendar year 2017 
        and each year thereafter, the annual limit on the number of 
        emission allowances from the strategic reserve account that may 
        be auctioned is an amount equal to 10 percent of the emission 
        allowances established for that calendar year under section 
        721(a). This limit does not apply to international offset 
        credits sold on consignment pursuant to subsection (h).
            ``(3) Allocation of limitation.--One-fourth of each year's 
        annual strategic reserve auction limit under this subsection 
        shall be made available for auction in each quarter. Any 
        allowances from the strategic reserve account that are made 
        available for sale in a quarterly auction and not sold shall be 
        rolled over and added to the quantity available for sale in the 
        following quarter, except that allowances not sold at auction 
        in the fourth quarter of a year shall not be rolled over to the 
        following calendar year's auctions, but shall be returned to 
        the strategic reserve account.
    ``(e) Purchase Limit.--
            ``(1) In general.--Except as provided in paragraph (2) or 
        (3), the annual number of emission allowances that a covered 
        entity may purchase at the strategic reserve auctions in each 
        calendar year shall not exceed 20 percent of the covered 
        entity's combined greenhouse gas emissions and attributable 
        greenhouse gas emissions during the most recent year for which 
        allowances or offset credits were retired under section 722.
            ``(2) 2012 limit.--For calendar year 2012, the maximum 
        aggregate number of emission allowances that a covered entity 
        may purchase from that year's strategic reserve auctions shall 
        be 20 percent of the covered entity's combined greenhouse gas 
        emissions and attributable greenhouse gas emissions that the 
        covered entity reported to the registry established under 
        section 713 for 2011 and that would be subject to section 
        722(a) if occurring in later calendar years.
            ``(3) New entrants.--The Administrator shall, by 
        regulation, establish a separate purchase limit applicable to 
        entities that expect to become a covered entity in the year of 
        the auction, permitting them to purchase emission allowances at 
        the strategic reserve auctions in their first calendar year of 
        operation in an amount of at least 20 percent of their expected 
        combined greenhouse gas emissions and attributable greenhouse 
        gas emissions for that year.
    ``(f) Delegation or Contract.--Pursuant to regulations under this 
section, the Administrator may, by delegation or contract, provide for 
the conduct of strategic reserve auctions under the Administrator's 
supervision by other departments or agencies of the Federal Government 
or by nongovernmental agencies, groups, or organizations.
    ``(g) Use of Auction Proceeds.--
            ``(1) Deposit in strategic reserve fund.--The proceeds from 
        strategic reserve auctions shall be placed in the Strategic 
        Reserve Fund established under section 793(1), and shall be 
        available without further appropriation or fiscal year 
        limitation for the purposes described in this subsection.
            ``(2) International offset credits for reduced 
        deforestation.--The Administrator shall use the proceeds from 
        each strategic reserve auction to purchase international offset 
        credits issued for reduced deforestation activities pursuant to 
        section 743(e). The Administrator shall retire those 
        international offset credits and establish a number of emission 
        allowances equal to 80 percent of the number of international 
        offset credits so retired. Emission allowances established 
        under this paragraph shall be in addition to those established 
        under section 721(a).
            ``(3) Emission allowances.--The Administrator shall deposit 
        emission allowances established under paragraph (2) in the 
        strategic reserve, except that, with respect to any such 
        emission allowances in excess of the amount necessary to fill 
        the strategic reserve to its original size, the Administrator 
        shall--
                    ``(A) except as provided in subparagraph (B), 
                assign a vintage year to the emission allowance, which 
                shall be no earlier than the year in which the 
                allowance is established under paragraph (2), and shall 
                treat such allowances as ones that are not designated 
                for distribution or auction for purposes of section 
                782(q) and (r); and
                    ``(B) to the extent any such allowances cannot be 
                assigned a vintage year because of the limitation in 
                paragraph (4), retire the allowances.
            ``(4) Limitation.--In no case may the Administrator assign 
        under paragraph (3)(A) more emission allowances to a vintage 
        year than the number of emission allowances from that vintage 
        year that were placed in the strategic reserve account under 
        subsection (b)(1).
    ``(h) Availability of International Offset Credits for Auction.--
            ``(1) In general.--The regulations promulgated under 
        section 721(h) shall allow any entity holding international 
        offset credits from reduced deforestation issued under section 
        743(e) to request that the Administrator include such offset 
        credits in an upcoming strategic reserve auction. The 
        regulations shall provide that--
                    ``(A) such international offset credits will be 
                used to fill bid orders only after the supply of 
                strategic reserve allowances available for sale at that 
                auction has been depleted;
                    ``(B) international offset credits may be sold at a 
                strategic reserve auction under this subsection only if 
                the Administrator determines that it is highly likely 
                that covered entities will, to cover emissions 
                occurring in the year the auction is held, use offset 
                credits to demonstrate compliance under section 722 for 
                emissions equal to or greater than 80 percent of 2 
                billion tons of carbon dioxide equivalent;
                    ``(C) upon sale of such international offset 
                credits, the Administrator shall retire those 
                international offset credits, and establish and provide 
                to the purchasers a number of emission allowances equal 
                to 80 percent of the number of international offset 
                credits so retired, which allowances shall be in 
                addition to those established under section 721(a); and
                    ``(D) for international offset credits sold 
                pursuant to this subsection, the proceeds for the 
                entity that offered the international offset credits 
                for sale shall be the lesser of--
                            ``(i) the average daily closing price for 
                        international offset credits sold on registered 
                        exchanges (or if such price is unavailable, the 
                        average price as determined by the 
                        Administrator) during the six months prior to 
                        the strategic reserve auction at which they 
                        were auctioned, with the remaining funds 
                        collected upon the sale of the international 
                        offset credits deposited in the Treasury; and
                            ``(ii) the amount received for the 
                        international offset credits at the auction.
            ``(2) Proceeds.--For international offset credits sold 
        pursuant to this subsection, notwithstanding section 3302 of 
        title 31, United States Code, or any other provision of law, 
        within 90 days of receipt, the United States shall transfer the 
        proceeds from the auction, as defined in paragraph (1)(D), to 
        the entity that offered the international offset credits for 
        sale. No funds transferred from a purchaser to a seller of 
        international offset credits under this paragraph shall be held 
        by any officer or employee of the United States or treated for 
        any purpose as public monies.
            ``(3) Pricing.--When the Administrator acts under this 
        subsection as the agent of an entity in possession of 
        international offset credits, the Administrator is not 
        obligated to obtain the highest price possible for the 
        international offset credits, and instead shall auction such 
        international offset credits in the same manner and pursuant to 
        the same rules (except as modified in paragraph (1)) as set 
        forth for auctioning strategic reserve allowances. Entities 
        requesting that such international offset credits be offered 
        for sale at a strategic reserve auction may not set a minimum 
        reserve price for their international offset credits that is 
        different than the minimum strategic reserve auction price set 
        pursuant to subsection (c).
    ``(i) Initial Regulations.--Not later than 24 months after the date 
of enactment of this title, the Administrator shall promulgate 
regulations, in consultation with other appropriate agencies, governing 
the auction of allowances under this section. Such regulations shall 
include the following requirements:
            ``(1) Frequency; first auction.--Auctions shall be held 
        four times per year at regular intervals, with the first 
        auction to be held no later than March 31, 2012.
            ``(2) Auction format.--Auctions shall follow a single-
        round, sealed-bid, uniform price format.
            ``(3) Participation; financial assurance.--Auctions shall 
        be open to any covered entity eligible to purchase emission 
        allowances at the auction under subsection (a)(2), except that 
        the Administrator may establish financial assurance 
        requirements to ensure that auction participants can and will 
        perform on their bids.
            ``(4) Disclosure of beneficial ownership.--Each bidder in 
        an auction shall be required to disclose the person or entity 
        sponsoring or benefitting from the bidder's participation in 
        the auction if such person or entity is, in whole or in part, 
        other than the bidder.
            ``(5) Purchase limits.--No person may, directly or in 
        concert with another participant, purchase more than 20 percent 
        of the allowances offered for sale at any quarterly auction.
            ``(6) Publication of information.--After the auction, the 
        Administrator shall, in a timely fashion, publish the 
        identities of winning bidders, the quantity of allowances 
        obtained by each winning bidder, and the auction clearing 
        price.
            ``(7) Other requirements.--The Administrator may include in 
        the regulations such other requirements or provisions as the 
        Administrator, in consultation with other agencies as 
        appropriate, considers appropriate to promote effective, 
        efficient, transparent, and fair administration of auctions 
        under this section.
    ``(j) Revision of Regulations.--The Administrator may, at any time, 
in consultation with other agencies as appropriate, revise the initial 
regulations promulgated under subsection (i). Such revised regulations 
need not meet the requirements identified in subsection (i) if the 
Administrator determines that an alternative auction design would be 
more effective, taking into account factors including costs of 
administration, transparency, fairness, and risks of collusion or 
manipulation. In determining whether and how to revise the initial 
regulations under this subsection, the Administrator shall not consider 
maximization of revenues to the Federal Government.

``SEC. 727. PERMITS.

    ``(a) Permit Program.--For stationary sources subject to title V of 
this Act that are covered entities, the provisions of this title shall 
be implemented by permits issued to such covered entities (and 
enforced) in accordance with the provisions of title V, as modified by 
this title. Any such permit issued by the Administrator, or by a State 
or Indian tribe with an approved permit program, shall require the 
owner or operator of a covered entity to hold allowances or offset 
credits at least equal to the total annual amount of carbon dioxide 
equivalents for its combined emissions and attributable greenhouse gas 
emissions to which section 722 applies. No such permit shall be issued 
that is inconsistent with the requirements of this title, and title V 
as applicable. Nothing in this section regarding compliance plans or in 
title V shall be construed as affecting allowances or offset credits. 
Submission of a statement by the owner or operator, or the designated 
representative of the owners and operators, of a covered entity that 
the owners and operators will hold allowances or offset credits for the 
entity's combined emissions and attributable greenhouse gas emissions 
to which section 722 applies shall be deemed to meet the proposed and 
approved planning requirements of title V. Recordation by the 
Administrator of transfers of allowances and offset credits shall amend 
automatically all applicable proposed or approved permit applications, 
compliance plans, and permits.
    ``(b) Multiple Owners.--No permit shall be issued under this 
section and no allowances or offset credits shall be disbursed under 
this title to a covered entity or any other person until the designated 
representative of the owners or operators has filed a certificate of 
representation with regard to matters under this title, including the 
holding and distribution of emission allowances and the proceeds of 
transactions involving emission allowances. Where there are multiple 
holders of a legal or equitable title to, or a leasehold interest in, 
such a covered entity or other entity or where a utility or industrial 
customer purchases power under a long-term power purchase contract from 
an independent power production facility that is a covered entity, the 
certificate shall state--
            ``(1) that emission allowances and the proceeds of 
        transactions involving emission allowances will be deemed to be 
        held or distributed in proportion to each holder's legal, 
        equitable, leasehold, or contractual reservation or 
        entitlement; or
            ``(2) if such multiple holders have expressly provided for 
        a different distribution of emission allowances by contract, 
        that emission allowances and the proceeds of transactions 
        involving emission allowances will be deemed to be held or 
        distributed in accordance with the contract.
A passive lessor, or a person who has an equitable interest through 
such lessor, whose rental payments are not based, either directly or 
indirectly, upon the revenues or income from the covered entity or 
other entity shall not be deemed to be a holder of a legal, equitable, 
leasehold, or contractual interest for the purpose of holding or 
distributing emission allowances as provided in this subsection, during 
either the term of such leasehold or thereafter, unless expressly 
provided for in the leasehold agreement. Except as otherwise provided 
in this subsection, where all legal or equitable title to or interest 
in a covered entity, or other entity, is held by a single person, the 
certificate shall state that all emission allowances received by the 
entity are deemed to be held for that person.
    ``(c) Prohibition.--It shall be unlawful for any person to operate 
any stationary source subject to the requirements of this section 
except in compliance with the terms and requirements of a permit issued 
by the Administrator or a State or Indian tribe with an approved permit 
program in accordance with this section. For purposes of this 
subsection, compliance, as provided in section 504(f), with a permit 
issued under title V which complies with this title for covered 
entities shall be deemed compliance with this subsection as well as 
section 502(a).
    ``(d) Reliability.--Nothing in this section or title V shall be 
construed as requiring termination of operations of a stationary source 
that is a covered entity for failure to have an approved permit, or 
compliance plan, that is consistent with the requirements in the second 
and fifth sentences of subsection (a) concerning the holding of 
allowances or offset credits, except that any such covered entity may 
be subject to the applicable enforcement provision of section 113.
    ``(e) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to implement this section. To provide for permits required under this 
section, each State in which one or more stationary sources that are 
covered entities are located shall submit, in accordance with this 
section and title V, revised permit programs for approval.

``SEC. 728. INTERNATIONAL EMISSION ALLOWANCES.

    ``(a) Qualifying Programs.--The Administrator, in consultation with 
the Secretary of State, may by rule designate an international climate 
change program as a qualifying international program if--
            ``(1) the program is run by a national or supranational 
        foreign government, and imposes a mandatory absolute tonnage 
        limit on greenhouse gas emissions from 1 or more foreign 
        countries, or from 1 or more economic sectors in such a country 
        or countries; and
            ``(2) the program is at least as stringent as the program 
        established by this title, including provisions to ensure at 
        least comparable monitoring, compliance, enforcement, quality 
        of offsets, and restrictions on the use of offsets.
    ``(b) Disqualified Allowances.--An international emission allowance 
may not be held under section 722(d)(2) if it is in the nature of an 
offset instrument or allowance awarded based on the achievement of 
greenhouse gas emission reductions or avoidance, or greenhouse gas 
sequestration, that are not subject to the mandatory absolute tonnage 
limits referred to in subsection (a)(1).
    ``(c) Retirement.--
            ``(1) Entity certification.--The owner or operator of an 
        entity that holds an international emission allowance under 
        section 722(d)(2) shall certify to the Administrator that such 
        international emission allowance has not previously been used 
        to comply with any foreign, international, or domestic 
        greenhouse gas regulatory program.
            ``(2) Retirement.--
                    ``(A) Foreign and international regulatory 
                entities.--The Administrator, in consultation with the 
                Secretary of State, shall seek, by whatever means 
                appropriate, including agreements and technical 
                cooperation on allowance tracking, to ensure that any 
                relevant foreign, international, and domestic 
                regulatory entities--
                            ``(i) are notified of the use, for purposes 
                        of compliance with this title, of any 
                        international emission allowance; and
                            ``(ii) provide for the disqualification of 
                        such international emission allowance for any 
                        subsequent use under the relevant foreign, 
                        international, or domestic greenhouse gas 
                        regulatory program, regardless of whether such 
                        use is a sale, exchange, or submission to 
                        satisfy a compliance obligation.
                    ``(B) Disqualification from further use.--The 
                Administrator shall ensure that, once an international 
                emission allowance has been disqualified or otherwise 
                used for purposes of compliance with this title, such 
                allowance shall be disqualified from any further use 
                under this title.
    ``(d) Use Limitations.--The Administrator may, by rule, apply a 
limit to the percentage of the combined greenhouse gas emissions and 
attributable greenhouse gas emissions of a covered entity with respect 
to which compliance may be demonstrated by holding international 
emission allowances under section 722(d)(2), consistent with the 
purposes of the Safe Climate Act.

                           ``PART D--OFFSETS

``SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.

    ``(a) Establishment.--Not later than 30 days after the date of 
enactment of this title, the Administrator shall establish an 
independent Offsets Integrity Advisory Board. The Advisory Board shall 
make recommendations to the Administrator for use in promulgating and 
revising regulations under this part and part E, and for ensuring the 
overall environmental integrity of the programs established pursuant to 
those regulations.
    ``(b) Membership.--The Advisory Board shall be comprised of at 
least nine members. Each member shall be qualified by education, 
training, and experience to evaluate scientific and technical 
information on matters referred to the Board under this section. The 
Administrator shall appoint Advisory Board members, including a chair 
and vice-chair of the Advisory Board. Terms shall be 3 years in length, 
except for initial terms, which may be up to 5 years in length to allow 
staggering. Members may be reappointed only once for an additional 3-
year term, and such second term may follow directly after a first term.
    ``(c) Activities.--The Advisory Board established pursuant to 
subsection (a) shall--
            ``(1) provide recommendations, not later than 90 days after 
        the Advisory Board's establishment and periodically thereafter, 
        to the Administrator regarding offset project types that should 
        be considered for eligibility under section 733, taking into 
        consideration relevant scientific and other issues, including--
                    ``(A) the availability of a representative data set 
                for use in developing the activity baseline;
                    ``(B) the potential for accurate quantification of 
                greenhouse gas reduction, avoidance, or sequestration 
                for an offset project type;
                    ``(C) the potential level of scientific and 
                measurement uncertainty associated with an offset 
                project type; and
                    ``(D) any beneficial or adverse environmental, 
                public health, welfare, social, economic, or energy 
                effects associated with an offset project type;
            ``(2) make available to the Administrator its advice and 
        comments on offset methodologies that should be considered 
        under regulations promulgated with respect to section 734, 
        including methodologies to address the issues of additionality, 
        activity baselines, quantification methods, leakage, 
        uncertainty, permanence, and environmental integrity;
            ``(3) make available to the Administrator, and other 
        relevant Federal agencies, its advice and comments regarding 
        scientific, technical, and methodological issues specific to 
        the issuance of international offset credits under section 743;
            ``(4) make available to the Administrator, and other 
        relevant Federal agencies, its advice and comments regarding 
        scientific, technical, and methodological issues associated 
        with the implementation of part E;
            ``(5) make available to the Administrator its advice and 
        comments on areas in which further knowledge is required to 
        appraise the adequacy of existing, revised, or proposed 
        methodologies for use under this part and part E, and describe 
        the research efforts necessary to provide the required 
        information; and
            ``(6) make available to the Administrator its advice and 
        comments on other ways to improve or safeguard the 
        environmental integrity of programs established under this part 
        and part E.
    ``(d) Scientific Review of Offset and Deforestation Reduction 
Programs.--Not later than January 1, 2017, and at five-year intervals 
thereafter, the Advisory Board shall submit to the Administrator and 
make available to the public an analysis of relevant scientific and 
technical information related to this part and part E. The Advisory 
Board shall review approved and potential methodologies, scientific 
studies, offset project monitoring, offset project verification 
reports, and audits related to this part and part E, and evaluate the 
net emissions effects of implemented offset projects. The Advisory 
Board shall recommend changes to offset methodologies, protocols, or 
project types, or to the overall offset program under this part, to 
ensure that offset credits issued by the Administrator do not 
compromise the integrity of the annual emission reductions established 
under section 703, and to avoid or minimize adverse effects to human 
health or the environment.

``SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM.

    ``(a) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator, in consultation with 
appropriate Federal agencies and taking into consideration the 
recommendations of the Advisory Board, shall promulgate regulations 
establishing a program for the issuance of offset credits in accordance 
with the requirements of this part. The Administrator shall 
periodically revise these regulations as necessary to meet the 
requirements of this part.
    ``(b) Requirements.--The regulations described in subsection (a) 
shall--
            ``(1) authorize the issuance of offset credits with respect 
        to qualifying offset projects that result in reductions or 
        avoidance of greenhouse gas emissions, or sequestration of 
        greenhouse gases;
            ``(2) ensure that such offset credits represent verifiable 
        and additional greenhouse gas emission reductions or avoidance, 
        or increases in sequestration;
            ``(3) ensure that offset credits issued for sequestration 
        offset projects are only issued for greenhouse gas reductions 
        that are permanent;
            ``(4) provide for the implementation of the requirements of 
        this part; and
            ``(5) include as reductions in greenhouse gases reductions 
        achieved through the destruction of methane and its conversion 
        to carbon dioxide, and reductions achieved through destruction 
        of chlorofluorocarbons or other ozone depleting substances, if 
        permitted by the Administrator under section 619(b)(9) and 
        subject to the conditions specified in section 619(b)(9), based 
        on the carbon dioxide equivalent value of the substance 
        destroyed.
    ``(c) Coordination to Minimize Negative Effects.--In promulgating 
and implementing regulations under this part, the Administrator shall 
act (including by rejecting projects, if necessary) to avoid or 
minimize, to the maximum extent practicable, adverse effects on human 
health or the environment resulting from the implementation of offset 
projects under this part.
    ``(d) Offset Registry.--The Administrator shall establish within 
the allowance tracking system established under section 724(d) an 
Offset Registry for qualifying offset projects and offset credits 
issued with respect thereto under this part.
    ``(e) Legal Status of Offset Credit.--An offset credit does not 
constitute a property right.
    ``(f) Fees.--The Administrator shall assess fees payable by offset 
project developers in an amount necessary to cover the administrative 
costs to the Environmental Protection Agency of carrying out the 
activities under this part. Amounts collected for such fees shall be 
available to the Administrator for carrying out the activities under 
this part to the extent provided in advance in appropriations Acts.

``SEC. 733. ELIGIBLE PROJECT TYPES.

    ``(a) List of Eligible Project Types.--
            ``(1) In general.--As part of the regulations promulgated 
        under section 732(a), the Administrator shall establish, and 
        may periodically revise, a list of types of projects eligible 
        to generate offset credits, including international offset 
        credits, under this part.
            ``(2) Advisory board recommendations.--In determining the 
        eligibility of project types, the Administrator shall take into 
        consideration the recommendations of the Advisory Board. If a 
        list established under this section differs from the 
        recommendations of the Advisory Board, the regulations 
        promulgated under section 732(a) shall include a justification 
        for the discrepancy.
            ``(3) Initial determination.--The Administrator shall 
        establish the initial eligibility list under paragraph (1) not 
        later than one year after the date of enactment of this title. 
        The Administrator shall add additional project types to the 
        list not later than 2 years after the date of enactment of this 
        title. In determining the initial list, the Administrator shall 
        give priority to consideration of offset project types that are 
        recommended by the Advisory Board and for which there are well 
        developed methodologies that the Administrator determines would 
        meet the criteria of section 734, with such modifications as 
        the Administrator deems appropriate. In establishing 
        methodologies pursuant to section 734, the Administrator shall 
        give priority to methodologies for offset project types 
        included on the initial eligibility list.
    ``(b) Modification of List.--The Administrator--
            ``(1) may at any time, by rule, add a project type to the 
        list established under subsection (a) if the Administrator, in 
        consultation with appropriate Federal agencies and taking into 
        consideration the recommendations of the Advisory Board, 
        determines that the project type can generate additional 
        reductions or avoidance of greenhouse gas emissions, or 
        sequestration of greenhouse gases, subject to the requirements 
        of this part;
            ``(2) may at any time, by rule, determine that a project 
        type on the list does not meet the requirements of this part, 
        and remove the project type from the list established under 
        subsection (a), in consultation with appropriate Federal 
        agencies and taking into consideration any recommendations of 
        the Advisory Board; and
            ``(3) shall consider adding to or removing from the list 
        established under subsection (a), at a minimum, project types 
        proposed to the Administrator--
                    ``(A) by petition pursuant to subsection (c); or
                    ``(B) by the Advisory Board.
    ``(c) Petition Process.--Any person may petition the Administrator 
to modify the list established under subsection (a) by adding or 
removing a project type pursuant to subsection (b). Any such petition 
shall include a showing by the petitioner that there is adequate data 
to establish that the project type does or does not meet the 
requirements of this part. Not later than 12 months after receipt of 
such a petition, the Administrator shall either grant or deny the 
petition and publish a written explanation of the reasons for the 
Administrator's decision. The Administrator may not deny a petition 
under this subsection on the basis of inadequate Environmental 
Protection Agency resources or time for review.

``SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS.

    ``(a) Methodologies.--As part of the regulations promulgated under 
section 732(a), the Administrator shall establish, for each type of 
offset project listed as eligible under section 733, the following:
            ``(1) Additionality.--A standardized methodology for 
        determining the additionality of greenhouse gas emission 
        reductions or avoidance, or greenhouse gas sequestration, 
        achieved by an offset project of that type. Such methodology 
        shall ensure, at a minimum, that any greenhouse gas emission 
        reduction or avoidance, or any greenhouse gas sequestration, is 
        considered additional only to the extent that it results from 
        activities that--
                    ``(A) are not required by or undertaken to comply 
                with any law, including any regulation or consent 
                order;
                    ``(B) were not commenced prior to January 1, 2009, 
                except in the case of--
                            ``(i) offset project activities that 
                        commenced after January 1, 2001, and were 
                        registered as of the date of enactment of this 
                        title under an offset program with respect to 
                        which the Administrator has made an affirmative 
                        determination under section 740(a)(2); or
                            ``(ii) activities that are readily 
                        reversible, with respect to which the 
                        Administrator may set an alternative earlier 
                        date under this subparagraph that is not 
                        earlier than January 1, 2001, where the 
                        Administrator determines that setting such an 
                        alternative date may produce an environmental 
                        benefit by removing an incentive to cease and 
                        then reinitiate activities that began prior to 
                        January 1, 2009; and
                    ``(C) exceed the activity baseline established 
                under paragraph (2).
            ``(2) Activity baselines.--A standardized methodology for 
        establishing activity baselines for offset projects of that 
        type. The Administrator shall set activity baselines to reflect 
        a conservative estimate of business-as-usual performance or 
        practices for the relevant type of activity such that the 
        baseline provides an adequate margin of safety to ensure the 
        environmental integrity of offsets calculated in reference to 
        such baseline.
            ``(3) Quantification methods.--A standardized methodology 
        for determining the extent to which greenhouse gas emission 
        reductions or avoidance, or greenhouse gas sequestration, 
        achieved by an offset project of that type exceed a relevant 
        activity baseline, including protocols for monitoring and 
        accounting for uncertainty.
            ``(4) Leakage.--A standardized methodology for accounting 
        for and mitigating potential leakage, if any, from an offset 
        project of that type, taking uncertainty into account.
    ``(b) Accounting for Reversals.--
            ``(1) In general.--For each type of sequestration project 
        listed under section 733, the Administrator shall establish 
        requirements to account for and address reversals, including--
                    ``(A) a requirement to report any reversal with 
                respect to an offset project for which offset credits 
                have been issued under this part;
                    ``(B) provisions to require emission allowances to 
                be held in amounts to fully compensate for greenhouse 
                gas emissions attributable to reversals, and to assign 
                responsibility for holding such emission allowances; 
                and
                    ``(C) any other provisions the Administrator 
                determines necessary to account for and address 
                reversals.
            ``(2) Mechanisms.--The Administrator shall prescribe 
        mechanisms to ensure that any sequestration with respect to 
        which an offset credit is issued under this part results in a 
        permanent net increase in sequestration, and that full account 
        is taken of any actual or potential reversal of such 
        sequestration, with an adequate margin of safety. The 
        Administrator shall prescribe at least one of the following 
        mechanisms to meet the requirements of this paragraph:
                    ``(A) An offsets reserve, pursuant to paragraph 
                (3).
                    ``(B) Insurance that provides for purchase and 
                provision to the Administrator for retirement of an 
                amount of offset credits or emission allowances equal 
                in number to the tons of carbon dioxide equivalents of 
                greenhouse gas emissions released due to reversal.
                    ``(C) Another mechanism that the Administrator 
                determines satisfies the requirements of this part.
            ``(3) Offsets reserve.--
                    ``(A) In general.--An offsets reserve referred to 
                in paragraph (2)(A) is a program under which, before 
                issuance of offset credits under this part, the 
                Administrator shall subtract and reserve from the 
                quantity to be issued a quantity of offset credits 
                based on the risk of reversal. The Administrator 
                shall--
                            ``(i) hold these reserved offset credits in 
                        the offsets reserve; and
                            ``(ii) register the holding of the reserved 
                        offset credits in the Offset Registry 
                        established under section 732(d).
                    ``(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 Administrator shall retire 
                        offset credits or emission allowances from the 
                        offsets reserve to fully account for the tons 
                        of carbon dioxide equivalent that are no longer 
                        sequestered.
                            ``(ii) Intentional reversals.--If the 
                        Administrator determines that a reversal was 
                        intentional, the offset project developer 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 the 
                        number of reserve offset credits that were 
                        canceled due to the reversal pursuant to clause 
                        (i).
                            ``(iii) Unintentional reversals.--If the 
                        Administrator determines that a reversal was 
                        unintentional, the offset project developer 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 half 
                        the number of offset credits that were reserved 
                        for that offset project, or half the number of 
                        reserve offset credits that were canceled due 
                        to the reversal pursuant to clause (i), 
                        whichever is less.
                    ``(C) Use of reserved offset credits.--Offset 
                credits placed into the offsets reserve under this 
                paragraph may not be used to comply with section 722.
    ``(c) Crediting Periods.--
            ``(1) In general.--For each offset project type, the 
        Administrator shall specify a crediting period, and establish 
        provisions for petitions for new crediting periods, in 
        accordance with this subsection.
            ``(2) Duration.--The crediting period shall be no less than 
        5 and no greater than 10 years for any project type other than 
        those involving sequestration.
            ``(3) Eligibility.--An offset project shall be eligible to 
        generate offset credits under this part only during the 
        project's crediting period. During such crediting period, the 
        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 
        735, except as provided in paragraph (4) of this subsection.
            ``(4) Petition for new crediting period.--An offset project 
        developer 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 when such petition is submitted. A petition may not be 
        submitted under this paragraph more than 18 months before the 
        end of the pending crediting period. The Administrator may 
        limit the number of new crediting periods available for 
        projects of particular project types.
    ``(d) Environmental Integrity.--In establishing the requirements 
under this section, the Administrator shall apply conservative 
assumptions or methods to maximize the certainty that the environmental 
integrity of the cap established under section 703 is not compromised.
    ``(e) Pre-existing Methodologies.--In promulgating requirements 
under this section, the Administrator shall give due consideration to 
methodologies for offset projects existing as of the date of enactment 
of this title.
    ``(f) Added Project Types.--The Administrator shall establish 
methodologies described in subsection (a), and, as applicable, 
requirements and mechanisms for reversals as described in subsection 
(b), for any project type that is added to the list pursuant to section 
733.

``SEC. 735. APPROVAL OF OFFSET PROJECTS.

    ``(a) Approval Petition.--An offset project developer shall submit 
an offset project approval petition providing such information as the 
Administrator requires to determine whether the offset project is 
eligible for issuance of offset credits under rules promulgated 
pursuant to this part.
    ``(b) Timing.--An approval petition shall be submitted to the 
Administrator under subsection (a) no later than the time at which an 
offset project's first verification report is submitted under section 
736.
    ``(c) Approval Petition Requirements.--As part of the regulations 
promulgated under section 732, the Administrator shall include 
provisions for, and shall specify, the required components of an offset 
project approval petition required under subsection (a), which shall 
include--
            ``(1) designation of an offset project developer; and
            ``(2) any other information that the Administrator 
        considers to be necessary to achieve the purposes of this part.
    ``(d) Approval and Notification.--Not later than 90 days after 
receiving a complete approval petition under subsection (a), the 
Administrator shall make the approval petition publicly available, 
approve or deny the petition in writing and if the petition is denied, 
provide the reasons for denial, and make the Administrator's written 
decision publicly available. After an offset project is approved, the 
offset project developer shall not be required to resubmit an approval 
petition during the offset project's crediting period, except as 
provided in section 734(c)(4).
    ``(e) Appeal.--The Administrator shall establish procedures for 
appeal and review of determinations made under subsection (d).
    ``(f) Voluntary Preapproval Review.--The Administrator may 
establish a voluntary preapproval review procedure, to allow an offset 
project developer to request the Administrator to conduct a preliminary 
eligibility review for an offset project. Findings of such reviews 
shall not be binding upon the Administrator. The voluntary preapproval 
review procedure--
            ``(1) shall require the offset project developer to submit 
        such basic project information as the Administrator requires to 
        provide a meaningful review; and
            ``(2) shall require a response from the Administrator not 
        later than 6 weeks after receiving a request for review under 
        this subsection.

``SEC. 736. VERIFICATION OF OFFSET PROJECTS.

    ``(a) In General.--As part of the regulations promulgated under 
section 732(a), the Administrator shall establish requirements, 
including protocols, for verification of the quantity of greenhouse gas 
emission reductions or avoidance, or sequestration of greenhouse gases, 
resulting from an offset project. The regulations shall require that an 
offset project developer shall submit a report, prepared by a third-
party verifier accredited under subsection (d), providing such 
information as the Administrator requires to determine the quantity of 
greenhouse gas emission reductions or avoidance, or sequestration of 
greenhouse gases, resulting from the offset project.
    ``(b) Schedule.--The Administrator shall prescribe a schedule for 
the submission of verification reports under subsection (a).
    ``(c) Verification Report Requirements.--The Administrator shall 
specify the required components of a verification report required under 
subsection (a), which shall include--
            ``(1) the name and contact information for a designated 
        representative for the offset project developer;
            ``(2) the quantity of greenhouse gases reduced, avoided, or 
        sequestered;
            ``(3) the methodologies applicable to the project pursuant 
        to section 734;
            ``(4) a certification that the project meets the applicable 
        requirements;
            ``(5) a certification establishing that the conflict of 
        interest requirements in the regulations promulgated under 
        subsection (d)(1) have been complied with; and
            ``(6) any other information that the Administrator 
        considers to be necessary to achieve the purposes of this part.
    ``(d) Verifier Accreditation.--
            ``(1) In general.--As part of the regulations promulgated 
        under section 732(a), the Administrator shall establish a 
        process and requirements for periodic accreditation of third-
        party verifiers to ensure that such verifiers are 
        professionally qualified and have no conflicts of interest.
            ``(2) Standards.--
                    ``(A) American national standards institute 
                accreditation.--The Administrator may accredit, or 
                accept for purposes of accreditation under this 
                subsection, verifiers accredited under the American 
                National Standards Institute (ANSI) accreditation 
                program in accordance with ISO 14065. The Administrator 
                shall accredit, or accept for accreditation, verifiers 
                under this subparagraph only if the Administrator finds 
                that the American National Standards Institute 
                accreditation program provides sufficient assurance 
                that the requirements of this part will be met.
                    ``(B) EPA accreditation.--As part of the 
                regulations promulgated under section 732(a), the 
                Administrator may establish accreditation standards for 
                verifiers under this subsection, and may establish 
                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 by the Administrator.

``SEC. 737. ISSUANCE OF OFFSET CREDITS.

    ``(a) Determination and Notification.--Not later than 90 days after 
receiving a complete verification report under section 736, the 
Administrator shall--
            ``(1) make the report publicly available;
            ``(2) make a determination of the quantity of greenhouse 
        gas emissions that have been reduced or avoided, or greenhouse 
        gases that have been sequestered, by the offset project; and
            ``(3) notify the offset project developer in writing of 
        such determination and make such determination publicly 
        available.
    ``(b) Issuance Of Offset Credits.--The Administrator shall issue 
one offset credit to an offset project developer for each ton of carbon 
dioxide equivalent that the Administrator has determined has been 
reduced, avoided, or sequestered during the period covered by a 
verification report submitted in accordance with section 736, only if--
            ``(1) the Administrator has approved the offset project 
        pursuant to section 735; and
            ``(2) the relevant emissions reduction, avoidance, or 
        sequestration has--
                    ``(A) already occurred, during the offset project's 
                crediting period; and
                    ``(B) occurred after January 1, 2009.
    ``(c) Appeal.--The Administrator shall establish procedures for 
appeal and review of determinations made under subsection (a).
    ``(d) Timing.--Offset credits meeting the criteria established in 
subsection (b) shall be issued not later than 2 weeks following the 
verification determination made by the Administrator under subsection 
(a).
    ``(e) Registration.--The Administrator shall assign a unique serial 
number to and register each offset credit to be issued in the Offset 
Registry established under section 732(d).

``SEC. 738. AUDITS.

    ``(a) In General.--The Administrator shall, on an ongoing basis, 
conduct random audits of offset projects, offset credits, and practices 
of third-party verifiers. In each year, the Administrator shall conduct 
audits, at minimum, for a representative sample of project types and 
geographic areas.
    ``(b) Delegation.--The Administrator may delegate to a State or 
tribal government the responsibility for conducting audits under this 
section if the Administrator finds that the program proposed by the 
State or tribal government provides assurances equivalent to those 
provided by the auditing program of the Administrator, and that the 
integrity of the offset program under this part will be maintained. 
Nothing in this subsection shall prevent the Administrator from 
conducting any audit the Administrator considers necessary and 
appropriate.

``SEC. 739. PROGRAM REVIEW AND REVISION.

    ``At least once every 5 years, the Administrator shall review and, 
based on new or updated information and taking into consideration the 
recommendations of the Advisory Board, update and revise--
            ``(1) the list of eligible project types established under 
        section 733;
            ``(2) the methodologies established, including specific 
        activity baselines, under section 734(a);
            ``(3) the reversal requirements and mechanisms established 
        or prescribed under section 734(b);
            ``(4) measures to improve the accountability of the offsets 
        program; and
            ``(5) any other requirements established under this part to 
        ensure the environmental integrity and effective operation of 
        this part.

``SEC. 740. EARLY OFFSET SUPPLY.

    ``(a) Projects Registered Under Other Government-recognized 
Programs.--Except as provided in subsection (b) or (c), the 
Administrator shall issue one offset credit for each ton of carbon 
dioxide equivalent emissions reduced, avoided, or sequestered--
            ``(1) under an offset project that was started after 
        January 1, 2001;
            ``(2) for which a credit was issued under any regulatory or 
        voluntary greenhouse gas emission offset program that the 
        Administrator determines--
                    ``(A) was established under State or tribal law or 
                regulation prior to January 1, 2009, or has been 
                approved by the Administrator pursuant to subsection 
                (e);
                    ``(B) has developed offset project type standards, 
                methodologies, and protocols through a public 
                consultation process or a peer review process;
                    ``(C) has made available to the public standards, 
                methodologies, and protocols that require that credited 
                emission reductions, avoidance, or sequestration are 
                permanent, additional, verifiable, and enforceable;
                    ``(D) requires that all emission reductions, 
                avoidance, or sequestration be verified by a State or 
                tribal regulatory agency or an accredited third-party 
                independent verification body;
                    ``(E) requires that all credits issued are 
                registered in a publicly accessible registry, with 
                individual serial numbers assigned for each ton of 
                carbon dioxide equivalent emission reductions, 
                avoidance, or sequestration; and
                    ``(F) ensures that no credits are issued for an 
                activity if the entity administering the program, or a 
                program administrator or representative, has funded, 
                solicited, or served as a fund administrator for the 
                development of the activity; and
            ``(3) for which the credit described in paragraph (2) is 
        transferred to the Administrator.
    ``(b) Ineligible Credits.--Subsection (a) 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 or 
regulation.
    ``(c) Limitation.--Notwithstanding subsection (a)(1), offset 
credits shall be issued under this section--
            ``(1) only for reductions or avoidance of greenhouse gas 
        emissions, sequestration of greenhouse gases, or destruction of 
        chlorofluorocarbons (subject to the conditions specified in 
        section 619(b)(9) and based on the carbon dioxide equivalent 
        value of the substance destroyed), that occur after January 1, 
        2009; and
            ``(2) only until the date that is 3 years after the date of 
        enactment of this title, or the date that regulations 
        promulgated under section 732(a) take effect, whichever occurs 
        sooner.
    ``(d) Retirement of Credits.--The Administrator shall seek to 
ensure that offset credits described in subsection (a)(2) are retired 
for purposes of use under a program described in subsection (b).
    ``(e) Other Programs.--(1) Offset programs that either--
            ``(A) were not established under State or tribal law or 
        regulation; or
            ``(B) were not established prior to January 1, 2009,
but that otherwise meet all of the criteria of subsection (a)(2) may 
apply to the Administrator to be approved under this subsection as an 
eligible program for early offset credits under this section.
    ``(2) The Administrator shall approve any such program that the 
Administrator determines has criteria and methodologies of at least 
equal stringency to the criteria and methodologies of the programs 
established under State or tribal law or regulation that the 
Administrator determines meet the criteria of subsection (a)(2). The 
Administrator may approve types of offsets under any such program that 
are subject to criteria and methodologies of at least equal stringency 
to the criteria and methodologies for such types of offsets applied 
under the programs established under State or tribal law or regulation 
that the Administrator determines meet the criteria of subsection 
(a)(2). The Administrator shall make a determination on any application 
received under this section by no later than 180 days from the date of 
receipt of the application.

``SEC. 741. ENVIRONMENTAL CONSIDERATIONS.

    ``If the Administrator lists forestry or other relevant land 
management-related offset projects as eligible offset project types 
under section 733, the Administrator, in consultation with appropriate 
Federal agencies, shall promulgate regulations for the selection and 
use of species in such offset projects--
            ``(1) to ensure that native species are given primary 
        consideration in such projects;
            ``(2) to enhance biological diversity in such projects;
            ``(3) to prohibit the use of federally designated or State-
        designated noxious weeds;
            ``(4) to prohibit the use of a species listed by a regional 
        or State invasive plant authority within the applicable region 
        or State; and
            ``(5) in the case of forestry offset projects, in 
        accordance with widely accepted, environmentally sustainable 
        forestry practices.

``SEC. 742. TRADING.

    ``Section 724 shall apply to the trading of offset credits.

``SEC. 743. INTERNATIONAL OFFSET CREDITS.

    ``(a) In General.--The Administrator, in consultation with the 
Secretary of State and the Administrator of the United States Agency 
for International Development, may issue, in accordance with this 
section, international offset credits based on activities that reduce 
or avoid greenhouse gas emissions, or increase sequestration of 
greenhouse gases, in a developing country. Such credits may be issued 
for projects eligible under section 733 or as provided in subsection 
(c), (d), or (e) of this section.
    ``(b) Issuance.--
            ``(1) Regulations.--Not later than 2 years after the date 
        of enactment of this title, the Administrator, in consultation 
        with the Secretary of State, the Administrator of the United 
        States Agency for International Development, and any other 
        appropriate Federal agency, and taking into consideration the 
        recommendations of the Advisory Board, shall promulgate 
        regulations for implementing this section. Except as otherwise 
        provided in this section, the issuance of international offset 
        credits under this section shall be subject to the requirements 
        of this part.
            ``(2) Requirements for international offset credits.--The 
        Administrator may issue international offset credits only if--
                    ``(A) the United States is a party to a bilateral 
                or multilateral agreement or arrangement that includes 
                the country in which the project or measure achieving 
                the relevant greenhouse gas emission reduction or 
                avoidance, or greenhouse gas sequestration, has 
                occurred;
                    ``(B) such country is a developing country; and
                    ``(C) such agreement or arrangement--
                            ``(i) ensures that the requirements of this 
                        part apply to the issuance of international 
                        offset credits under this section; and
                            ``(ii) provides for the appropriate 
                        distribution of international offset credits 
                        issued.
    ``(c) Sector-based Credits.--
            ``(1) In general.--In order to minimize the potential for 
        leakage and to encourage countries to take nationally 
        appropriate mitigation actions to reduce or avoid greenhouse 
        gas emissions, or sequester greenhouse gases, the 
        Administrator, in consultation with the Secretary of State and 
        the Administrator of the United States Agency for International 
        Development, shall--
                    ``(A) identify sectors of specific countries with 
                respect to which the issuance of international offset 
                credits on a sectoral basis is appropriate; and
                    ``(B) issue international offset credits for such 
                sectors only on a sectoral basis.
            ``(2) Identification of sectors.--
                    ``(A) General rule.--For purposes of paragraph 
                (1)(A), a sectoral basis shall be appropriate for 
                activities--
                            ``(i) in countries that have comparatively 
                        high greenhouse gas emissions, or comparatively 
                        greater levels of economic development; and
                            ``(ii) that, if located in the United 
                        States, would be within a sector subject to the 
                        compliance obligation under section 722.
                    ``(B) Factors.--In determining the sectors and 
                countries for which international offset credits should 
                be awarded only on a sectoral basis, the Administrator, 
                in consultation with the Secretary of State and the 
                Administrator of the United States Agency for 
                International Development, shall consider the following 
                factors:
                            ``(i) The country's gross domestic product.
                            ``(ii) The country's total greenhouse gas 
                        emissions.
                            ``(iii) Whether the comparable sector of 
                        the United States economy is covered by the 
                        compliance obligation under section 722.
                            ``(iv) The heterogeneity or homogeneity of 
                        sources within the relevant sector.
                            ``(v) Whether the relevant sector provides 
                        products or services that are sold in 
                        internationally competitive markets.
                            ``(vi) The risk of leakage if international 
                        offset credits were issued on a project-level 
                        basis, instead of on a sectoral basis, for 
                        activities within the relevant sector.
                            ``(vii) The capability of accurately 
                        measuring, monitoring, reporting, and verifying 
                        the performance of sources across the relevant 
                        sector.
                            ``(viii) Such other factors as the 
                        Administrator, in consultation with the 
                        Secretary of State and the Administrator of the 
                        United States Agency for International 
                        Development, determines are appropriate to--
                                    ``(I) ensure the integrity of the 
                                United States greenhouse gas emissions 
                                cap established under section 703; and
                                    ``(II) encourage countries to take 
                                nationally appropriate mitigation 
                                actions to reduce or avoid greenhouse 
                                gas emissions, or sequester greenhouse 
                                gases.
            ``(3) Sectoral basis.--
                    ``(A) Definition.--In this subsection, the term 
                `sectoral basis' means the issuance of international 
                offset credits only for the quantity of sector-wide 
                reductions or avoidance of greenhouse gas emissions, or 
                sector-wide increases in sequestration of greenhouse 
                gases, achieved across the relevant sector of the 
                economy relative to a domestically enforceable baseline 
                level of absolute emissions established in an agreement 
                or arrangement described in subsection (b)(2)(A) for 
                the sector.
                    ``(B) Baseline.--The baseline for a sector shall be 
                established on an absolute basis and at levels of 
                greenhouse gas emissions consistent with the thresholds 
                identified in section 705(e)(2) and lower than would 
                occur under a business-as-usual scenario taking into 
                account relevant domestic or international policies or 
                incentives to reduce greenhouse gas emissions, among 
                other factors, and additionality and performance shall 
                be determined on the basis of such baseline.
    ``(d) Credits Issued by an International Body.--
            ``(1) In general.--The Administrator, in consultation with 
        the Secretary of State, may issue international offset credits 
        in exchange for instruments in the nature of offset credits 
        that are issued by an international body established pursuant 
        to the United Nations Framework Convention on Climate Change, 
        to a protocol to such Convention, or to a treaty that succeeds 
        such Convention. The Administrator may issue international 
        offset credits under this subsection only if, in addition to 
        the requirements of subsection (b), the Administrator has 
        determined that the international body that issued the 
        instruments has implemented substantive and procedural 
        requirements for the relevant project type that provide equal 
        or greater assurance of the integrity of such instruments as is 
        provided by the requirements of this part. Starting January 1, 
        2016, the Administrator shall issue no offset credit pursuant 
        to this subsection if the activity generating the greenhouse 
        gas emissions reductions or avoidance, or greenhouse gas 
        sequestration, occurs in a country and sector identified by the 
        Administrator under subsection (c).
            ``(2) Retirement.--The Administrator, in consultation with 
        the Secretary of State, shall seek, by whatever means 
        appropriate, including agreements, arrangements, or technical 
        cooperation with the international issuing body described in 
        paragraph (1), to ensure that such body--
                    ``(A) is notified of the Administrator's issuance, 
                under this subsection, of an international offset 
                credit in exchange for an instrument issued by such 
                international body; and
                    ``(B) provides, to the extent feasible, for the 
                disqualification of the instrument issued by such 
                international body for subsequent use under any 
                relevant foreign or international greenhouse gas 
                regulatory program, regardless of whether such use is a 
                sale, exchange, or submission to satisfy a compliance 
                obligation.
    ``(e) Offsets From Reduced Deforestation.--
            ``(1) Requirements.--The Administrator, in accordance with 
        the regulations promulgated under subsection (b)(1) and an 
        agreement or arrangement described in subsection (b)(2)(A), 
        shall issue international offset credits for greenhouse gas 
        emission reductions achieved through activities to reduce 
        deforestation only if, in addition to the requirements of 
        subsection (b)--
                    ``(A) the activity occurs in--
                            ``(i) a country listed by the Administrator 
                        pursuant to paragraph (2);
                            ``(ii) a state or province listed by the 
                        Administrator pursuant to paragraph (5); or
                            ``(iii) a country listed by the 
                        Administrator pursuant to paragraph (6);
                    ``(B) except as provided in paragraph (5) or (6), 
                the quantity of the international offset credits is 
                determined by comparing the national emissions from 
                deforestation relative to a national deforestation 
                baseline for that country established, in accordance 
                with an agreement or arrangement described in 
                subsection (b)(2)(A), pursuant to paragraph (4);
                    ``(C) the reduction in emissions from deforestation 
                has occurred before the issuance of the international 
                offset credit and, taking into consideration relevant 
                international standards, has been demonstrated using 
                ground-based inventories, remote sensing technology, 
                and other methodologies to ensure that all relevant 
                carbon stocks are accounted;
                    ``(D) the Administrator has made appropriate 
                adjustments, such as discounting for any additional 
                uncertainty, to account for circumstances specific to 
                the country, including its technical capacity described 
                in paragraph (2)(A);
                    ``(E) the activity is designed, carried out, and 
                managed--
                            ``(i) in accordance with widely accepted, 
                        environmentally sustainable forest management 
                        practices;
                            ``(ii) to promote or restore native forest 
                        species and ecosystems where practicable, and 
                        to avoid the introduction of invasive nonnative 
                        species;
                            ``(iii) in a manner that gives due regard 
                        to the rights and interests of local 
                        communities, indigenous peoples, forest-
                        dependent communities, and vulnerable social 
                        groups;
                            ``(iv) with consultations with, and full 
                        participation of, local communities, indigenous 
                        peoples, and forest-dependent communities, in 
                        affected areas, as partners and primary 
                        stakeholders, prior to and during the design, 
                        planning, implementation, and monitoring and 
                        evaluation of activities; and
                            ``(v) with equitable sharing of profits and 
                        benefits derived from offset credits with local 
                        communities, indigenous peoples, and forest-
                        dependent communities; and
                    ``(F) the reduction otherwise satisfies and is 
                consistent with any relevant requirements established 
                by an agreement reached under the auspices of the 
                United Nations Framework Convention on Climate Change.
            ``(2) Eligible countries.--The Administrator, in 
        consultation with the Secretary of State and the Administrator 
        of the United States Agency for International Development, and 
        in accordance with an agreement or arrangement described in 
        subsection (b)(2)(A), shall establish, and periodically review 
        and update, a list of the developing countries that have the 
        capacity to participate in deforestation reduction activities 
        at a national level, including--
                    ``(A) the technical capacity to monitor, measure, 
                report, and verify forest carbon fluxes for all 
                significant sources of greenhouse gas emissions from 
                deforestation with an acceptable level of uncertainty, 
                as determined taking into account relevant 
                internationally accepted methodologies, such as those 
                established by the Intergovernmental Panel on Climate 
                Change;
                    ``(B) the institutional capacity to reduce 
                emissions from deforestation, including strong forest 
                governance and mechanisms to equitably distribute 
                deforestation resources for local actions; and
                    ``(C) a land use or forest sector strategic plan 
                that--
                            ``(i) assesses national and local drivers 
                        of deforestation and forest degradation and 
                        identifies reforms to national policies needed 
                        to address them;
                            ``(ii) estimates the country's emissions 
                        from deforestation and forest degradation;
                            ``(iii) identifies improvements in data 
                        collection, monitoring, and institutional 
                        capacity necessary to implement a national 
                        deforestation reduction program; and
                            ``(iv) establishes a timeline for 
                        implementing the program and transitioning to 
                        low-emissions development with respect to 
                        emissions from forest and land use activities.
            ``(3) Protection of interests.--With respect to an 
        agreement or arrangement described in subsection (b)(2)(A) that 
        addresses international offset credits under this subsection, 
        the Administrator, in consultation with the Secretary of State 
        and the Administrator of the United States Agency for 
        International Development, shall seek to ensure the 
        establishment and enforcement by such country of legal regimes, 
        processes, standards, and safeguards that--
                    ``(A) give due regard to the rights and interests 
                of local communities, indigenous peoples, forest-
                dependent communities, and vulnerable social groups;
                    ``(B) promote consultations with, and full 
                participation of, forest-dependent communities and 
                indigenous peoples in affected areas, as partners and 
                primary stakeholders, prior to and during the design, 
                planning, implementation, and monitoring and evaluation 
                of activities; and
                    ``(C) encourage equitable sharing of profits and 
                benefits derived from international offset credits with 
                local communities, indigenous peoples, and forest-
                dependent communities.
            ``(4) National deforestation baseline.--A national 
        deforestation baseline established under this subsection 
        shall--
                    ``(A) be national in scope;
                    ``(B) be consistent with nationally appropriate 
                mitigation commitments or actions with respect to 
                deforestation, taking into consideration the average 
                annual historical deforestation rates of the country 
                during a period of at least 5 years, the applicable 
                drivers of deforestation, and other factors to ensure 
                additionality;
                    ``(C) establish a trajectory that would result in 
                zero net deforestation by not later than 20 years after 
                the national deforestation baseline has been 
                established;
                    ``(D) be adjusted over time to take account of 
                changing national circumstances;
                    ``(E) be designed to account for all significant 
                sources of greenhouse gas emissions from deforestation 
                in the country; and
                    ``(F) be consistent with the national deforestation 
                baseline, if any, established for such country under 
                section 754(d)(1) and (2).
            ``(5) State-level or province-level activities.--
                    ``(A) Eligible states or provinces.--The 
                Administrator, in consultation with the Secretary of 
                State and the Administrator of the United States Agency 
                for International Development, shall establish within 2 
                years after the date of enactment of this title, and 
                periodically review and update, a list of states or 
                provinces in developing countries where--
                            ``(i) the developing country is not 
                        included on the list of countries established 
                        pursuant to paragraph (6)(A);
                            ``(ii) the state or province by itself is a 
                        major emitter of greenhouse gases from tropical 
                        deforestation on a scale commensurate to the 
                        emissions of other countries; and
                            ``(iii) the state or province meets the 
                        eligibility criteria in paragraphs (2) and (3) 
                        for the geographic area under its jurisdiction.
                    ``(B) Activities.--The Administrator may issue 
                international offset credits for greenhouse gas 
                emission reductions achieved through activities to 
                reduce deforestation at a state or provincial level 
                that meet the requirements of this section. Such 
                credits shall be determined by comparing the emissions 
                from deforestation within that state or province 
                relative to the state or province deforestation 
                baseline for that state or province established, in 
                accordance with an agreement or arrangement described 
                in subsection (b)(2)(A), pursuant to subparagraph (C) 
                of this paragraph.
                    ``(C) State or province deforestation baseline.--A 
                state or province deforestation baseline shall--
                            ``(i) be consistent with any existing 
                        nationally appropriate mitigation commitments 
                        or actions for the country in which the 
                        activity is occurring, taking into 
                        consideration the average annual historical 
                        deforestation rates of the state or province 
                        during a period of at least 5 years, relevant 
                        drivers of deforestation, and other factors to 
                        ensure additionality;
                            ``(ii) establish a trajectory that would 
                        result in zero net deforestation by not later 
                        than 20 years after the state or province 
                        deforestation baseline has been established; 
                        and
                            ``(iii) be designed to account for all 
                        significant sources of greenhouse gas emissions 
                        from deforestation in the state or province and 
                        adjusted to fully account for emissions leakage 
                        outside the state or province.
                    ``(D) Phase out.--Beginning 5 years after the first 
                calendar year for which a covered entity must 
                demonstrate compliance with section 722(a), the 
                Administrator shall issue no further international 
                offset credits for eligible state-level or province-
                level activities to reduce deforestation pursuant to 
                this paragraph.
            ``(6) Projects and programs to reduce deforestation.--
                    ``(A) Eligible countries.--The Administrator, in 
                consultation with the Secretary of State and the 
                Administrator of the United States Agency for 
                International Development, shall establish within 2 
                years after the date of enactment of this title, and 
                periodically review and update, a list of developing 
                countries each of which--
                            ``(i) the Administrator determines, based 
                        on recent, credible, and reliable emissions 
                        data, accounts for less than 1 percent of 
                        global greenhouse gas emissions and less than 3 
                        percent of global forest-sector and land use 
                        change greenhouse gas emissions; and
                            ``(ii) has, or in the determination of the 
                        Administrator is making a good faith effort to 
                        develop, a land use or forest sector strategic 
                        plan that meets the criteria described in 
                        paragraph (2)(C).
                    ``(B) Activities.--The Administrator may issue 
                international offset credits for greenhouse gas 
                emission reductions achieved through project or program 
                level activities to reduce deforestation in countries 
                listed under subparagraph (A) that meet the 
                requirements of this section. The quantity of 
                international offset credits shall be determined by 
                comparing the project-level or program-level emissions 
                from deforestation to a deforestation baseline for such 
                project or program established pursuant to subparagraph 
                (C).
                    ``(C) Project-level or program-level baseline.--A 
                project-level or program-level deforestation baseline 
                shall--
                            ``(i) be consistent with any existing 
                        nationally appropriate mitigation commitments 
                        or actions for the country in which the project 
                        or program is occurring, taking into 
                        consideration the average annual historical 
                        deforestation rates relevant to the specific 
                        project or program during a period of at least 
                        5 years, applicable drivers of deforestation, 
                        and other factors to ensure additionality;
                            ``(ii) be designed to account for all 
                        significant sources of greenhouse gas emissions 
                        from deforestation in the project or program 
                        boundary; and
                            ``(iii) be adjusted to fully account for 
                        emissions leakage outside the project or 
                        program boundary.
                    ``(D) Phase out.--(i) Beginning 5 years after the 
                first calendar year for which a covered entity must 
                demonstrate compliance with section 722(a), the 
                Administrator shall issue no further international 
                offset credits for project-level or program-level 
                activities pursuant to this paragraph, except as 
                provided in clause (ii).
                    ``(ii) The Administrator may extend the phase out 
                deadline for the issuance of international offset 
                credits under this paragraph by up to 8 years with 
                respect to eligible activities taking place in a least 
                developed country, which for purposes of this paragraph 
                is defined as a foreign country that the United Nations 
                has identified as among the least developed of 
                developing countries at the time that the Administrator 
                determines to provide an extension, if the 
                Administrator, in consultation with the Secretary of 
                State and the Administrator of the United States Agency 
                for International Development, determines the country--
                            ``(I) lacks sufficient capacity to adopt 
                        and implement effective programs to achieve 
                        reductions in deforestation measured against 
                        national baselines;
                            ``(II) is receiving support under part E to 
                        develop such capacity; and
                            ``(III) has developed and is working to 
                        implement a credible national strategy or plan 
                        to reduce deforestation.
            ``(7) Deforestation.--In implementing this subsection, the 
        Administrator, taking into consideration the recommendations of 
        the Advisory Board, may include forest degradation, or soil 
        carbon losses associated with forested wetlands or peatlands, 
        within the meaning of deforestation.
            ``(8) Consultation.--In implementing this subsection, the 
        Administrator shall consult with the Secretary of Agriculture 
        on relevant matters within such Secretary's area of expertise.
    ``(f) Modification of Requirements.--In promulgating regulations 
under subsection (b)(1) with respect to the issuance of international 
offset credits under subsection (c), (d), or (e), the Administrator, in 
consultation with the Secretary of State and the Administrator of the 
United States Agency for International Development, may modify or omit 
a requirement of this part (excluding the requirements of this section) 
if the Administrator determines that the application of that 
requirement to such subsection is not feasible. In modifying or 
omitting such a requirement on the basis of infeasibility, the 
Administrator, in consultation with the Secretary of State and the 
Administrator of the United States Agency for International 
Development, shall ensure, with an adequate margin of safety, the 
integrity of international offset credits issued under this section and 
of the greenhouse gas emissions cap established pursuant to section 
703.
    ``(g) Avoiding Double Counting.--The Administrator, in consultation 
with the Secretary of State, shall seek, by whatever means appropriate, 
including agreements, arrangements, or technical cooperation, to ensure 
that activities on the basis of which international offset credits are 
issued under this section are not used for compliance with an 
obligation to reduce or avoid greenhouse gas emissions, or increase 
greenhouse gas sequestration, under a foreign or international 
regulatory system. In addition, no international offset credits shall 
be issued for emission reductions from activities with respect to which 
emission allowances were allocated under section 781 for distribution 
under part E.
    ``(h) Limitation.--The Administrator shall not issue international 
offset credits generated by projects based on the destruction of 
hydrofluorocarbons.

 ``PART E--SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED DEFORESTATION

``SEC. 751. DEFINITIONS.

    ``In this part:
            ``(1) Leakage prevention activities.--The term `leakage 
        prevention activities' means activities in developing countries 
        that are directed at preserving existing forest carbon stocks, 
        including forested wetlands and peatlands, that might, absent 
        such activities, be lost through leakage.
            ``(2) National deforestation reduction activities.--The 
        term `national deforestation reduction activities' means 
        activities in developing countries that reduce a quantity of 
        greenhouse gas emissions from deforestation that is calculated 
        by measuring actual emissions against a national deforestation 
        baseline established pursuant to section 754(d)(1) and (2).
            ``(3) Subnational deforestation reduction activities.--The 
        term `subnational deforestation reduction activities' means 
        activities in developing countries that reduce a quantity of 
        greenhouse gas emissions from deforestation that are calculated 
        by measuring actual emissions using an appropriate baseline 
        established by the Administrator that is less than national in 
        scope.
            ``(4) Supplemental emissions reductions.--The term 
        `supplemental emissions reductions' means greenhouse gas 
        emissions reductions achieved from reduced or avoided 
        deforestation under this part.
            ``(5) USAID.--The term `USAID' means the United States 
        Agency for International Development.

``SEC. 752. FINDINGS.

    ``Congress finds that--
            ``(1) as part of a global effort to mitigate climate 
        change, it is in the national interest of the United States to 
        assist developing countries to reduce and ultimately halt 
        emissions from deforestation;
            ``(2) deforestation is one of the largest sources of 
        greenhouse gas emissions in developing countries, amounting to 
        roughly 20 percent of overall emissions globally;
            ``(3) recent scientific analysis shows that it will be 
        substantially more difficult to limit the increase in global 
        temperatures to less than 2 degrees centigrade above 
        preindustrial levels without reducing and ultimately halting 
        net emissions from deforestation;
            ``(4) reducing emissions from deforestation is highly cost-
        effective, compared to many other sources of emissions 
        reductions;
            ``(5) in addition to contributing significantly to 
        worldwide efforts to address global warming, assistance under 
        this part will generate significant environmental and social 
        cobenefits, including protection of biodiversity, ecosystem 
        services, and forest-related livelihoods; and
            ``(6) under the Bali Action Plan, developed country parties 
        to the United Nations Framework Convention on Climate Change, 
        including the United States, committed to `enhanced action on 
        the provision of financial resources and investment to support 
        action on mitigation and adaptation and technology 
        cooperation,' including, inter alia, consideration of `improved 
        access to adequate, predictable, and sustainable financial 
        resources and financial and technical support, and the 
        provision of new and additional resources, including official 
        and concessional funding for developing country parties' .

``SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS THROUGH REDUCED 
              DEFORESTATION.

    ``(a) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator, in consultation with the 
Administrator of USAID and any other appropriate agencies, shall 
promulgate regulations establishing a program to use emission 
allowances set aside for this purpose under section 781 to reduce 
greenhouse gas emissions from deforestation in developing countries in 
accordance with the requirements of this part.
    ``(b) Objectives.--The objectives of the program established under 
this section shall be to--
            ``(1) achieve supplemental emissions reductions of at least 
        720,000,000 tons of carbon dioxide equivalent in 2020, a 
        cumulative amount of at least 6,000,000,000 tons of carbon 
        dioxide equivalent by December 31, 2025, and additional 
        supplemental emissions reductions in subsequent years;
            ``(2) build capacity to reduce deforestation in developing 
        countries experiencing deforestation, including preparing 
        developing countries to participate in international markets 
        for international offset credits for reduced emissions from 
        deforestation; and
            ``(3) preserve existing forest carbon stocks in countries 
        where such forest carbon may be vulnerable to international 
        leakage, particularly in developing countries with largely 
        intact native forests.

``SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFORESTATION REDUCTION 
              PROGRAM.

    ``(a) Eligible Countries.--The Administrator may support activities 
under this part only with respect to a developing country that--
            ``(1) the Administrator, in consultation with the 
        Administrator of USAID, determines is experiencing 
        deforestation or forest degradation or has standing forest 
        carbon stocks that may be at risk of deforestation or 
        degradation; and
            ``(2) has entered into a bilateral or multilateral 
        agreement or arrangement with the United States establishing 
        the conditions of its participation in the program established 
        under this part, which shall include an agreement to meet the 
        standards established under subsection (d) for the activities 
        to which those standards apply.
    ``(b) Activities.--
            ``(1) Authorized activities.--Subject to the requirements 
        of this part, the Administrator, in consultation with the 
        Administrator of USAID, may support activities to achieve the 
        objectives identified in section 753(b), including--
                    ``(A) national deforestation reduction activities;
                    ``(B) subnational deforestation reduction 
                activities, including pilot activities that reduce 
                greenhouse gas emissions but are subject to significant 
                uncertainty;
                    ``(C) activities to measure, monitor, and verify 
                deforestation, avoided deforestation, and deforestation 
                rates;
                    ``(D) leakage prevention activities;
                    ``(E) development of measurement, monitoring, and 
                verification capacities to enable a country to quantify 
                supplemental emissions reductions and to generate for 
                sale offset credits from reduced or avoided 
                deforestation;
                    ``(F) development of governance structures to 
                reduce deforestation and illegal logging;
                    ``(G) enforcement of requirements for reduced 
                deforestation or forest conservation;
                    ``(H) efforts to combat illegal logging and 
                increase enforcement cooperation;
                    ``(I) providing incentives for policy reforms to 
                achieve the objectives identified in section 753(b); 
                and
                    ``(J) monitoring and evaluation of the results of 
                the activities conducted under this section.
            ``(2) Activities selected by usaid.--
                    ``(A) The Administrator of USAID, in consultation 
                with the Administrator, may select for support and 
                implementation pursuant to subsection (c) any of the 
                activities described in paragraph (1), consistent with 
                this part and the regulations promulgated under 
                subsection (d), and subject to the requirement to 
                achieve the objectives listed in section 753(b)(1).
                    ``(B) With respect to the activities listed in 
                subparagraphs (D) through (J) of paragraph (1), the 
                Administrator of USAID, in consultation with the 
                Administrator, shall have primary but not exclusive 
                responsibility for selecting the activities to be 
                supported and implemented.
            ``(3) Interagency coordination.--The Administrator and the 
        Administrator of USAID shall jointly develop and biennially 
        update a strategic plan for meeting the objectives listed in 
        section 753(b) and shall execute a memorandum of understanding 
        delineating the agencies' respective roles in implementing this 
        part.
    ``(c) Mechanisms.--
            ``(1) In general.--The Administrator may support activities 
        to achieve the objectives identified in section 753(b) by--
                    ``(A) developing and implementing programs and 
                projects that achieve such objectives; and
                    ``(B) distributing emission allowances to a country 
                that is eligible under subsection (a), to a private or 
                public group (including international organizations), 
                or to an international fund established by an 
                international agreement to which the United States is a 
                party, to carry out activities to achieve such 
                objectives.
            ``(2) USAID activities.--With respect to activities 
        selected and implemented by the Administrator of USAID pursuant 
        to subsection (b)(2), the Administrator shall distribute 
        emission allowances as provided in paragraph (1) of this 
        subsection based upon the direction of the Administrator of 
        USAID, subject to the availability of allowances for such 
        activities.
            ``(3) Implementation through international organizations.--
        If support is distributed through an international 
        organization, the agency responsible for selecting activities 
        in accordance with subsection (b)(1) or (2), in consultation 
        with the Secretary of State, shall ensure the establishment and 
        implementation of adequate mechanisms to apply and enforce the 
        eligibility requirements and other requirements of this 
        section.
            ``(4) Role of the secretary of state.--The Administrator 
        may not distribute emission allowances under this part to the 
        government of another country or to an international 
        organization or international fund unless the Secretary of 
        State has concurred with such distribution.
    ``(d) Standards.--The Administrator, in consultation with the 
Administrator of USAID, shall promulgate regulations establishing 
standards to ensure that supplemental emissions reductions achieved 
through supported activities are additional, measurable, verifiable, 
permanent, and monitored, and account for leakage and uncertainty. In 
addition, such standards shall--
            ``(1) require the establishment of a national deforestation 
        baseline for each country with national deforestation reduction 
        activities that is used to account for reductions achieved from 
        such activities;
            ``(2) provide that a national deforestation baseline 
        established under paragraph (1) shall--
                    ``(A) be national in scope;
                    ``(B) be consistent with nationally appropriate 
                mitigation commitments or actions with respect to 
                deforestation, taking into consideration the average 
                annual historical deforestation rates of the country 
                during a period of at least 5 years, the applicable 
                drivers of deforestation, and other factors to ensure 
                additionality;
                    ``(C) establish a trajectory that would result in 
                zero net deforestation by not later than 20 years from 
                the date the baseline is established;
                    ``(D) be adjusted over time to take account of 
                changing national circumstances;
                    ``(E) be designed to account for all significant 
                sources of greenhouse gas emissions from deforestation 
                in the country; and
                    ``(F) be consistent with the national deforestation 
                baseline, if any, established for such country under 
                section 743(e)(4);
            ``(3) with respect to support provided pursuant to 
        subsection (b)(1)(A) or (B), require supplemental emissions 
        reductions to be achieved and verified prior to compensation 
        through the distribution of emission allowances under this 
        part;
            ``(4) with respect to accounting for subnational 
        deforestation reduction activities that lack the standardized 
        or precise measurement and monitoring techniques needed for a 
        full accounting of changes in emissions or baselines, or are 
        subject to other sources of uncertainty, apply a conservative 
        discount factor to reflect the uncertainty regarding the levels 
        of reductions achieved;
            ``(5) ensure that activities under this part shall be 
        designed, carried out, and managed--
                    ``(A) in accordance with widely accepted, 
                environmentally sustainable forest management 
                practices;
                    ``(B) to promote or restore native forest species 
                and ecosystems where practicable, and to avoid the 
                introduction of invasive nonnative species;
                    ``(C) in a manner that gives due regard to the 
                rights and interests of local communities, indigenous 
                peoples, forest-dependent communities, and vulnerable 
                social groups;
                    ``(D) with consultations with, and full 
                participation of, local communities, indigenous 
                peoples, and forest-dependent communities in affected 
                areas, as partners and primary stakeholders, prior to 
                and during the design, planning, implementation, and 
                monitoring and evaluation of activities; and
                    ``(E) with equitable sharing of profits and 
                benefits derived from the activities with local 
                communities, indigenous peoples, and forest-dependent 
                communities; and
            ``(6) with respect to support for all activities under this 
        part, seek to ensure the establishment and enforcement, by the 
        country in which the activities occur, of legal regimes, 
        standards, processes, and safeguards that--
                    ``(A) give due regard to the rights and interests 
                of local communities, indigenous peoples, forest-
                dependent communities, and vulnerable social groups;
                    ``(B) promote consultations with local communities 
                and indigenous peoples and forest-dependent communities 
                in affected areas, as partners and primary 
                stakeholders, prior to and during the design, planning, 
                implementation, monitoring, and evaluation of 
                activities under this part; and
                    ``(C) encourage equitable sharing of profits and 
                benefits from incentives for emissions reductions or 
                leakage prevention with local communities, indigenous 
                peoples, and forest-dependent communities.
    ``(e) Scope.--(1) The Administrator shall include within the scope 
of activities under this part reduced emissions from forest 
degradation.
    ``(2) The Administrator, in consultation with the Administrator of 
USAID, may decide, taking into account any advice from the Advisory 
Board, to expand, where appropriate, the scope of activities under this 
part to include reduced soil carbon-derived emissions associated with 
deforestation and degradation of forested wetlands and peatlands.
    ``(f) Accounting.--The Administrator shall establish a publicly 
accessible registry of the supplemental emissions reductions achieved 
through support provided under this part each year, after appropriately 
discounting for uncertainty and other relevant factors as required by 
the standards established under subsection (d).
    ``(g) Transition to National Reductions.--Beginning 5 years after 
the date that a country entered into the agreement or arrangement 
required under subsection (a)(2), the Administrator shall provide no 
further compensation through emission allowances to that country under 
this part for any subnational deforestation reduction activities, 
except that the Administrator may extend this period by an additional 5 
years if the Administrator, in consultation with the Administrator of 
USAID, determines that--
            ``(1) the country is making substantial progress towards 
        adopting and implementing a program to achieve reductions in 
        deforestation measured against a national baseline;
            ``(2) the greenhouse gas emissions reductions achieved are 
        not resulting in significant leakage; and
            ``(3) the greenhouse gas emissions reductions achieved are 
        being appropriately discounted to account for any leakage that 
        is occurring.
The limitation under this subsection shall not apply to support for 
activities to further the objectives listed in section 753(b)(2) or 
(3).
    ``(h) Coordination With U.S. Foreign Assistance.--Subject to the 
direction of the President, the Administrator and the Administrator of 
USAID shall, to the extent practicable and consistent with the 
objectives of this program, seek to align activities under this section 
with broader development, poverty alleviation, or natural resource 
management objectives and initiatives in the recipient country.
    ``(i) Support as Supplement.--The provision of support for 
activities under this part shall be used to supplement, and not to 
supplant, any other Federal, State, or local support available to carry 
out such qualifying activities under this part.
    ``(j) Not Eligible for Offset Credit.--Activities that receive 
support under this part shall not be issued offset credits for the 
greenhouse gas emissions reductions or avoidance, or greenhouse gas 
sequestration, produced by such activities.

``SEC. 755. REPORTS AND REVIEWS.

    ``(a) Reports.--Not later than January 1, 2014, and annually 
thereafter, the Administrator and the Administrator of USAID shall 
submit to the Committee on Energy and Commerce and the Committee on 
Foreign Affairs of the House of Representatives, and the Committee on 
Environment and Public Works and the Committee on Foreign Relations of 
the Senate, and make available to the public, a report on the support 
provided under this part during the prior fiscal year. The report shall 
include--
            ``(1) a statement of the quantity of supplemental emissions 
        reductions for which compensation in the form of emission 
        allowances was provided under this part during the prior fiscal 
        year, as registered by the Administrator under section 754(f); 
        and
            ``(2) a description of the national and subnational 
        deforestation reduction activities, capacity-building 
        activities, and leakage prevention activities supported under 
        this part, including a statement of the quantity of emission 
        allowances distributed to each recipient for each activity 
        during the prior fiscal year, and a description of what was 
        accomplished through each of the activities.
    ``(b) Reviews.--Not later than 4 years after the date of enactment 
of this title and every 5 years thereafter, the Administrator and the 
Administrator of USAID, taking into consideration any evaluation by or 
recommendations from the Advisory Board established under section 731, 
shall conduct a review of the activities undertaken pursuant to this 
part and make any appropriate changes in the program established under 
this part, consistent with the requirements of this part, based on the 
findings of the review. The review shall include the effects of the 
activities on--
            ``(1) total documented carbon stocks of each country that 
        directly or indirectly received support under this part 
        compared with such country's national deforestation baseline 
        established under section 754(d)(1) and (2);
            ``(2) the number of countries with the capacity to generate 
        for sale instruments in the nature of offset credits from 
        forest-related activities, and the amount of such activities;
            ``(3) forest governance in each country that directly or 
        indirectly received support under this part;
            ``(4) indigenous peoples and forest-dependent communities 
        residing in areas affected by such activities;
            ``(5) biodiversity and ecosystem services within forested 
        areas associated with the activities;
            ``(6) subnational and international leakage; and
            ``(7) any program or mechanism established under the United 
        Nations Framework Convention on Climate Change related to 
        greenhouse gas emissions from deforestation.

``SEC. 756. LEGAL EFFECT OF PART.

            ``(1) In general.--Nothing in this part supersedes, limits, 
        or otherwise affects any restriction imposed by Federal law 
        (including regulations) on any interaction between an entity 
        located in the United States and an entity located in a foreign 
        country.
            ``(2) Role of the secretary of state.--Nothing in this part 
        shall be construed as affecting the role of the Secretary of 
        State or the responsibilities of the Secretary under section 
        622(c) of the Foreign Assistance Act of 1961.''.

SEC. 312. DEFINITIONS.

    Title VII of the Clean Air Act, as added by section 311 of this 
Act, is amended by inserting before part A the following new section:

``SEC. 700. DEFINITIONS.

    ``In this title:
            ``(1) Additional.--The term `additional', when used with 
        respect to reductions or avoidance of greenhouse gas emissions, 
        or to sequestration of greenhouse gases, means reductions, 
        avoidance, or sequestration that result in a lower level of net 
        greenhouse gas emissions or atmospheric concentrations than 
        would occur in the absence of an offset project.
            ``(2) Additionality.--The term `additionality' means the 
        extent to which reductions or avoidance of greenhouse gas 
        emissions, or sequestration of greenhouse gases, are 
        additional.
            ``(3) Advisory board.--The term `Advisory Board' means the 
        Offsets Integrity Advisory Board established under section 731.
            ``(4) Affiliated.--The term `affiliated'--
                    ``(A) when used in relation to an entity means 
                owned or controlled by, or under common ownership or 
                control with, another entity, as determined by the 
                Administrator; and
                    ``(B) when used in relation to a natural gas local 
                distribution company, means owned or controlled by, or 
                under common ownership or control with, another natural 
                gas local distribution company, as determined by the 
                Administrator.
            ``(5) Allowance.--The term `allowance' means a limited 
        authorization to emit, or have attributable greenhouse gas 
        emissions in an amount of, 1 ton of carbon dioxide equivalent 
        of a greenhouse gas in accordance with this title. Such term 
        includes an emission allowance, a compensatory allowance, and 
        an international emission allowance, but does not include an 
        international reserve allowance established under section 766.
            ``(6) Attributable greenhouse gas emissions.--The term 
        `attributable greenhouse gas emissions', for a given calendar 
        year, means--
                    ``(A) for a covered entity that is a fuel producer 
                or importer described in paragraph (13)(B), greenhouse 
                gases that would be emitted from the combustion of any 
                petroleum-based or coal-based liquid fuel, petroleum 
                coke, or natural gas liquid, produced or imported by 
                that covered entity during that calendar year for sale 
                or distribution in interstate commerce, assuming no 
                capture and sequestration of any greenhouse gas 
                emissions;
                    ``(B) for a covered entity that is an industrial 
                gas producer or importer described in paragraph 
                (13)(C), the tons of carbon dioxide equivalent of any 
                gas described in clauses (i) through (vi) of paragraph 
                (13)(C)--
                            ``(i) produced or imported by such covered 
                        entity during that calendar year for sale or 
                        distribution in interstate commerce; or
                            ``(ii) released as fugitive emissions in 
                        the production of fluorinated gas; and
                    ``(C) for a natural gas local distribution company 
                described in paragraph (13)(J), greenhouse gases that 
                would be emitted from the combustion of the natural 
                gas, and any other gas meeting the specifications for 
                commingling with natural gas for purposes of delivery, 
                that such entity delivered during that calendar year to 
                customers that are not covered entities, assuming no 
                capture and sequestration of that greenhouse gas.
            ``(7) Biological sequestration; biologically sequestered.--
        The terms `biological sequestration' and `biologically 
        sequestered' mean the removal of greenhouse gases from the 
        atmosphere by terrestrial biological means, such as by growing 
        plants, and the storage of those greenhouse gases in plants or 
        soils.
            ``(8) Capped emissions.--The term `capped emissions' means 
        greenhouse gas emissions to which section 722 applies, 
        including emissions from the combustion of natural gas, 
        petroleum-based or coal-based liquid fuel, petroleum coke, or 
        natural gas liquid to which section 722(b)(2) or (8) applies.
            ``(9) Capped source.--The term `capped source' means a 
        source that directly emits capped emissions.
            ``(10) Carbon dioxide equivalent.--The term `carbon dioxide 
        equivalent' means the unit of measure, expressed in metric 
        tons, of greenhouse gases as provided under section 711 or 712.
            ``(11) Carbon stock.--The term `carbon stock' means the 
        quantity of carbon contained in a biological reservoir or 
        system which has the capacity to accumulate or release carbon.
            ``(12) Compensatory allowance.--The term `compensatory 
        allowance' means an allowance issued under section 721(f).
            ``(13) Covered entity.--The term `covered entity' means 
        each of the following:
                    ``(A) Any electricity source.
                    ``(B) Any stationary source that produces, and any 
                entity that (or any group of two or more affiliated 
                entities that, in the aggregate) imports, for sale or 
                distribution in interstate commerce in 2008 or any 
                subsequent year, petroleum-based or coal-based liquid 
                fuel, petroleum coke, or natural gas liquid, the 
                combustion of which would emit 25,000 or more tons of 
                carbon dioxide equivalent, as determined by the 
                Administrator.
                    ``(C) Any stationary source that produces, and any 
                entity that (or any group of two or more affiliated 
                entities that, in the aggregate) imports, for sale or 
                distribution in interstate commerce, in bulk, or in 
                products designated by the Administrator, in 2008 or 
                any subsequent year 25,000 or more tons of carbon 
                dioxide equivalent of--
                            ``(i) fossil fuel-based carbon dioxide;
                            ``(ii) nitrous oxide;
                            ``(iii) perfluorocarbons;
                            ``(iv) sulfur hexafluoride;
                            ``(v) any other fluorinated gas, except for 
                        nitrogen trifluoride, that is a greenhouse gas, 
                        as designated by the Administrator under 
                        section 711; or
                            ``(vi) any combination of greenhouse gases 
                        described in clauses (i) through (v).
                    ``(D) Any stationary source that has emitted 25,000 
                or more tons of carbon dioxide equivalent of nitrogen 
                trifluoride in 2008 or any subsequent year.
                    ``(E) Any geologic sequestration site.
                    ``(F) Any stationary source in the following 
                industrial sectors:
                            ``(i) Adipic acid production.
                            ``(ii) Primary aluminum production.
                            ``(iii) Ammonia manufacturing.
                            ``(iv) Cement production, excluding 
                        grinding-only operations.
                            ``(v) Hydrochlorofluorocarbon production.
                            ``(vi) Lime manufacturing.
                            ``(vii) Nitric acid production.
                            ``(viii) Petroleum refining.
                            ``(ix) Phosphoric acid production.
                            ``(x) Silicon carbide production.
                            ``(xi) Soda ash production.
                            ``(xii) Titanium dioxide production.
                            ``(xiii) Coal-based liquid or gaseous fuel 
                        production.
                    ``(G) Any stationary source in the chemical or 
                petrochemical sector that, in 2008 or any subsequent 
                year--
                            ``(i) produces acrylonitrile, carbon black, 
                        ethylene, ethylene dichloride, ethylene oxide, 
                        or methanol; or
                            ``(ii) produces a chemical or petrochemical 
                        product if producing that product results in 
                        annual combustion plus process emissions of 
                        25,000 or more tons of carbon dioxide 
                        equivalent.
                    ``(H) Any stationary source that--
                            ``(i) is in one of the following industrial 
                        sectors: ethanol production; ferroalloy 
                        production; fluorinated gas production; food 
                        processing; glass production; hydrogen 
                        production; iron and steel production; lead 
                        production; pulp and paper manufacturing; and 
                        zinc production; and
                            ``(ii) has emitted 25,000 or more tons of 
                        carbon dioxide equivalent in 2008 or any 
                        subsequent year.
                    ``(I) Any fossil fuel-fired combustion device (such 
                as a boiler) or grouping of such devices that--
                            ``(i) is all or part of an industrial 
                        source not specified in subparagraph (D), (F), 
                        (G), or (H); and
                            ``(ii) has emitted 25,000 or more tons of 
                        carbon dioxide equivalent in 2008 or any 
                        subsequent year.
                    ``(J) Any natural gas local distribution company 
                that (or any group of 2 or more affiliated natural gas 
                local distribution companies that, in the aggregate), 
                in 2008 or any subsequent year, delivers 460,000,000 
                cubic feet or more of natural gas, and any other gas 
                meeting the specifications for commingling with natural 
                gas for purposes of delivery, to customers that are not 
                covered entities.
            ``(14) Crediting period.--The term `crediting period' means 
        the period with respect to which an offset project is eligible 
        to earn offset credits under part D, as determined under 
        section 734(c).
            ``(15) Designated representative.--The term `designated 
        representative' means, with respect to a covered entity, a 
        reporting entity (as defined in section 713), an offset project 
        developer, or any other entity receiving or holding allowances 
        or offset credits under this title, an individual authorized, 
        through a certificate of representation submitted to the 
        Administrator by the owners and operators or similar entity 
        official, to represent the owners and operators or similar 
        entity official in all matters pertaining to this title 
        (including the holding, transfer, or disposition of allowances 
        or offset credits), and to make all submissions to the 
        Administrator under this title.
            ``(16) Developing country.--The term `developing country' 
        means a country eligible to receive official development 
        assistance according to the income guidelines of the 
        Development Assistance Committee of the Organization for 
        Economic Cooperation and Development.
            ``(17) Domestic offset credit.--The term `domestic offset 
        credit' means an offset credit issued under part D, other than 
        an international offset credit.
            ``(18) Electricity source.--The term `electricity source' 
        means a stationary source that includes one or more utility 
        units.
            ``(19) Emission.--The term `emission' means the release of 
        a greenhouse gas into the ambient air. Such term does not 
        include gases that are captured and geologically sequestered, 
        except to the extent that they are later released into the 
        atmosphere, in which case compliance must be demonstrated 
        pursuant to section 722(b)(5).
            ``(20) Emission allowance.--The term `emission allowance' 
        means an allowance established under section 721(a) or section 
        726(g)(2) or (h)(1)(C).
            ``(21) Fair market value.--The term `fair market value' 
        means the average daily closing price on registered exchanges 
        or, if such a price is unavailable, the average price as 
        determined by the Administrator, during a specified time 
        period, of an emission allowance.
            ``(22) Federal land.--The term `Federal land' means land 
        that is owned by the United States, other than land held in 
        trust for an Indian or Indian tribe.
            ``(23) Fossil fuel.--The term `fossil fuel' means natural 
        gas, petroleum, or coal, or any form of solid, liquid, or 
        gaseous fuel derived from such material, including consumer 
        products that are derived from such materials and are 
        combusted.
            ``(24) Fossil fuel-fired.--The term `fossil fuel-fired' 
        means powered by combustion of fossil fuel, alone or in 
        combination with any other fuel, regardless of the percentage 
        of fossil fuel consumed.
            ``(25) Fugitive emissions.--The term `fugitive emissions' 
        means emissions from leaks, valves, joints, or other small 
        openings in pipes, ducts, or other equipment, or from vents.
            ``(26) Geologic sequestration; geologically sequestered.--
        The terms `geologic sequestration' and `geologically 
        sequestered' mean the sequestration of greenhouse gases in 
        subsurface geologic formations for purposes of permanent 
        storage.
            ``(27) Geologic sequestration site.--The term `geologic 
        sequestration site' means a site where carbon dioxide is 
        geologically sequestered.
            ``(28) Greenhouse gas.--The term `greenhouse gas' means any 
        gas described in section 711(a) or designated under section 
        711, except to the extent that it is regulated under title VI.
            ``(29) High conservation priority land.--The term `high 
        conservation priority land' means land that is not Federal land 
        and is--
                    ``(A) globally or State ranked as critically 
                imperiled or imperiled under a State Natural Heritage 
                Program; or
                    ``(B) old-growth or late-successional forest, as 
                identified by the office of the State Forester or 
                relevant State agency with regulatory jurisdiction over 
                forestry activities.
            ``(30) Hold.--The term `hold' means, with respect to an 
        allowance or offset credit, to have in the appropriate account 
        in the allowance tracking system established under section 
        724(d), or submit to the Administrator for recording in such 
        account.
            ``(31) Industrial source.--The term `industrial source' 
        means any stationary source that--
                    ``(A) is not an electricity source; and
                    ``(B) is in--
                            ``(i) the manufacturing sector (as defined 
                        in North American Industrial Classification 
                        System codes 31, 32, and 33); or
                            ``(ii) the natural gas processing or 
                        natural gas pipeline transportation sector (as 
                        defined in North American Industrial 
                        Classification System codes 211112 and 486210).
            ``(32) International emission allowance.--The term 
        `international emission allowance' means a tradable 
        authorization to emit 1 ton of carbon dioxide equivalent of 
        greenhouse gas that is issued by a national or supranational 
        foreign government pursuant to a qualifying international 
        program designated by the Administrator pursuant to section 
        728(a).
            ``(33) International offset credit.--The term 
        `international offset credit' means an offset credit issued by 
        the Administrator under section 743.
            ``(34) Leakage.--Except as provided in part F, the term 
        `leakage' means a significant increase in greenhouse gas 
        emissions, or significant decrease in sequestration, which is 
        caused by an offset project or activities under part E and 
        occurs outside the boundaries of the offset project or the 
        relevant program or project under part E.
            ``(35) Mineral sequestration.--The term `mineral 
        sequestration' means sequestration of carbon dioxide from the 
        atmosphere by capturing carbon dioxide into a permanent 
        mineral, such as the aqueous precipitation of carbonate 
        minerals that results in the storage of carbon dioxide in a 
        mineral form.
            ``(36) Natural gas liquid.--The term `natural gas liquid' 
        means ethane, butane, isobutane, natural gasoline, and propane.
            ``(37) Natural gas local distribution company.--The term 
        `natural gas local distribution company' has the meaning given 
        the term `local distribution company' in section 2(17) of the 
        Natural Gas Policy Act of 1978 (15 U.S.C. 3301(17)).
            ``(38) Offset credit.--The term `offset credit' means a 
        credit issued under part D.
            ``(39) Offset project.--The term `offset project' means a 
        project or activity that reduces or avoids greenhouse gas 
        emissions, or sequesters greenhouse gases, and for which offset 
        credits are or may be issued under part D.
            ``(40) Offset project developer.--The term `offset project 
        developer' means the individual or entity designated as the 
        offset project developer in an offset project approval petition 
        under section 735(c)(1).
            ``(41) Petroleum.--The term `petroleum' includes crude oil, 
        tar sands, oil shale, and heavy oils.
            ``(42) Renewable biomass.--The term `renewable biomass' 
        means any of the following:
                    ``(A) Plant material, including waste material, 
                harvested or collected from actively managed 
                agricultural land that was in cultivation, cleared, or 
                fallow and nonforested on January 1, 2009.
                    ``(B) Plant material, including waste material, 
                harvested or collected from pastureland that was 
                nonforested on January 1, 2009.
                    ``(C) Nonhazardous vegetative matter derived from 
                waste, including separated yard waste, landscape right-
                of-way trimmings, construction and demolition debris or 
                food waste (but not municipal solid waste, recyclable 
                waste paper, painted, treated or pressurized wood, or 
                wood contaminated with plastic or metals).
                    ``(D) Animal waste or animal byproducts, including 
                products of animal waste digesters.
                    ``(E) Algae.
                    ``(F) Trees, brush, slash, residues, or any other 
                vegetative matter removed from within 600 feet of any 
                building, campground, or route designated for 
                evacuation by a public official with responsibility for 
                emergency preparedness, or from within 300 feet of a 
                paved road, electric transmission line, utility tower, 
                or water supply line.
                    ``(G) Residues from or byproducts of milled logs.
                    ``(H) Any of the following removed from forested 
                land that is not Federal land and is not high 
                conservation priority land:
                            ``(i) Trees, brush, slash, residues, 
                        interplanted energy crops, or any other 
                        vegetative matter removed from an actively 
                        managed tree plantation established--
                                    ``(I) prior to January 1, 2009; or
                                    ``(II) on land that, as of January 
                                1, 2009, was cultivated or fallow and 
                                non-forested.
                            ``(ii) Trees, logging residue, thinnings, 
                        cull trees, pulpwood, and brush removed from 
                        naturally-regenerated forests or other non-
                        plantation forests, including for the purposes 
                        of hazardous fuel reduction or preventative 
                        treatment for reducing or containing insect or 
                        disease infestation.
                            ``(iii) Logging residue, thinnings, cull 
                        trees, pulpwood, brush and species that are 
                        non-native and noxious, from stands that were 
                        planted and managed after January 1, 2009, to 
                        restore or maintain native forest types.
                            ``(iv) Dead or severely damaged trees 
                        removed within 5 years of fire, blowdown, or 
                        other natural disaster, and badly infested 
                        trees.
                    ``(I) Materials, pre-commercial thinnings, or 
                removed invasive species from National Forest System 
                land and public lands (as defined in section 103 of the 
                Federal Land Policy and Management Act of 1976 (43 
                U.S.C. 1702)), including those that are byproducts of 
                preventive treatments (such as trees, wood, brush, 
                thinnings, chips, and slash), that are removed as part 
                of a federally recognized timber sale, or that are 
                removed to reduce hazardous fuels, to reduce or contain 
                disease or insect infestation, or to restore ecosystem 
                health, and that are--
                            ``(i) not from components of the National 
                        Wilderness Preservation System, Wilderness 
                        Study Areas, Inventoried Roadless Areas, old 
                        growth or mature forest stands, components of 
                        the National Landscape Conservation System, 
                        National Monuments, National Conservation 
                        Areas, Designated Primitive Areas; or Wild and 
                        Scenic Rivers corridors;
                            ``(ii) harvested in environmentally 
                        sustainable quantities, as determined by the 
                        appropriate Federal land manager; and
                            ``(iii) harvested in accordance with 
                        Federal and State law, and applicable land 
                        management plans.
            ``(43) Retire.--The term `retire', with respect to an 
        allowance or offset credit established or issued under this 
        title, means to disqualify such allowance or offset credit for 
        any subsequent use under this title, regardless of whether the 
        use is a sale, exchange, or submission of the allowance or 
        offset credit to satisfy a compliance obligation.
            ``(44) Reversal.--The term `reversal' means an intentional 
        or unintentional loss of sequestered greenhouse gases to the 
        atmosphere.
            ``(45) Sequestered and sequestration.--The terms 
        `sequestered' and `sequestration' mean the separation, 
        isolation, or removal of greenhouse gases from the atmosphere, 
        as determined by the Administrator. The terms include 
        biological, geologic, and mineral sequestration, but do not 
        include ocean fertilization techniques.
            ``(46) Stationary source.--The term `stationary source' 
        means any integrated operation comprising any plant, building, 
        structure, or stationary equipment, including support buildings 
        and equipment, that is located within one or more contiguous or 
        adjacent properties, is under common control of the same person 
        or persons, and emits or may emit a greenhouse gas.
            ``(47) Strategic reserve allowance.--The term `strategic 
        reserve allowance' means an emission allowance reserved for, 
        transferred to, or deposited in the strategic reserve under 
        section 726.
            ``(48) Ton.--The term `ton' means metric ton.
            ``(49) Uncapped emissions.--The term `uncapped emissions' 
        means emissions of greenhouse gases emitted after December 31, 
        2011, that are not capped emissions.
            ``(50) United states greenhouse gas emissions.--The term 
        `United States greenhouse gas emissions' means the total 
        quantity of annual greenhouse gas emissions from the United 
        States, as calculated by the Administrator and reported to the 
        United Nations Framework Convention on Climate Change 
        Secretariat.
            ``(51) Utility unit.--The term `utility unit' means a 
        combustion device that, on January 1, 2009, or any date 
        thereafter, is fossil fuel-fired and serves a generator that 
        produces electricity for sale, unless such combustion device, 
        during the 12-month period starting the later of January 1, 
        2009, or the commencement of commercial operation and each 
        calendar year starting after such later date--
                    ``(A) is part of an integrated cycle system that 
                cogenerates steam and electricity during normal 
                operation and that supplies one-third or less of its 
                potential electric output capacity and 25 MW or less of 
                electrical output for sale; or
                    ``(B) combusts materials of which more than 95 
                percent is municipal solid waste on a heat input basis.
            ``(52) Vintage year.--The term `vintage year' means the 
        calendar year for which an emission allowance is established 
        under section 721(a) or which is assigned to an emission 
        allowance under section 726(g)(3)(A), except that the vintage 
        year for a strategic reserve allowance shall be the year in 
        which such allowance is purchased at auction.''.

                 Subtitle B--Disposition of Allowances

SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL WARMING POLLUTION 
              REDUCTION PROGRAM.

    Title VII of the Clean Air Act, as added by section 311 of this 
Act, is amended by adding at the end the following part:

                  ``PART H--DISPOSITION OF ALLOWANCES

``SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLEMENTAL REDUCTIONS.

    ``(a) In General.--The Administrator shall allocate for each 
vintage year the following percentage of the emission allowances 
established under section 721(a), for distribution in accordance with 
part E:
            ``(1) For vintage years 2012 through 2025, 5 percent.
            ``(2) For vintage years 2026 through 2030, 3 percent.
            ``(3) For vintage years 2031 through 2050, 2 percent.
    ``(b) Adjustment.--The Administrator shall modify the percentages 
set forth in subsection (a) as necessary to ensure the achievement of 
the annual supplemental emission reduction objective for 2020, and the 
cumulative reduction objective through 2025, set forth in section 
753(b)(1).
    ``(c) Carryover.--If the Administrator has not distributed all of 
the allowances allocated pursuant to this section for a given vintage 
year by the end of that year, all such undistributed emission 
allowances shall, in accordance with section 782(s), be exchanged for 
allowances from the following vintage year and treated as part of the 
allocation for supplemental reductions entities under this section for 
that later vintage year.

``SEC. 782. ALLOCATION OF EMISSION ALLOWANCES.

    ``(a) Electricity Consumers.--(1) The Administrator shall allocate 
emission allowances for the benefit of electricity consumers, to be 
distributed in accordance with section 783(b), (c), and (d) in the 
following amounts:
            ``(A) For vintage years 2012 and 2013: 43.75 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(B) For vintage years 2014 and 2015: 38.89 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(C) For vintage years 2016 through 2025: 35.00 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(D) For vintage year 2026: 28 percent of the emission 
        allowances established for that year under section 721(a).
            ``(E) For vintage year 2027: 21 percent of the emission 
        allowances established for that year under section 721(a).
            ``(F) For vintage year 2028: 14 percent of the emission 
        allowances established for that year under section 721(a).
            ``(G) For vintage year 2029: 7 percent of the emission 
        allowances established for that year under section 721(a).
    ``(2) The Administrator shall allocate emission allowances for 
energy efficiency, renewable electricity, and low income ratepayer 
assistance programs administered by small electricity local 
distribution companies, to be distributed in accordance with section 
783(e) in the following amounts:
            ``(A) For vintage years 2012 through 2025: 0.5 percent of 
        the emission allowances established each year under section 
        721(a).
            ``(B) For vintage year 2026: 0.4 percent of the emission 
        allowances established for that year under section 721(a).
            ``(C) For vintage year 2027: 0.3 percent of the emission 
        allowances established for that year under section 721(a).
            ``(D) For vintage year 2028: 0.2 percent of the emission 
        allowances established for that year under section 721(a).
            ``(E) For vintage year 2029: 0.1 percent of the emission 
        allowances established for that year under section 721(a).
    ``(b) Natural Gas Consumers.--The Administrator shall allocate 
emission allowances for the benefit of natural gas consumers to be 
distributed in accordance with section 784 in the following amounts:
            ``(1) For vintage years 2016 through 2025, 9 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(2) For vintage year 2026, 7.2 percent of the emission 
        allowances established for that year under section 721(a).
            ``(3) For vintage year 2027, 5.4 percent of the emission 
        allowances established for that year under section 721(a).
            ``(4) For vintage year 2028, 3.6 percent of the emission 
        allowances established for that year under section 721(a).
            ``(5) For vintage year 2029, 1.8 percent of the emission 
        allowances established for that year under section 721(a).
    ``(c) Home Heating Oil and Propane Consumers.--The Administrator 
shall allocate emission allowances for the benefit of home heating oil 
and propane consumers to be distributed in accordance with section 785 
in the following amounts:
            ``(1) For vintage years 2012 and 2013, 1.875 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2014 and 2015, 1.67 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2016 through 2025, 1.5 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(4) For vintage year 2026, 1.2 percent of the emission 
        allowances established for that year under section 721(a).
            ``(5) For vintage year 2027, 0.9 percent of the emission 
        allowances established for that year under section 721(a).
            ``(6) For vintage year 2028, 0.6 percent of the emission 
        allowances established for that year under section 721(a).
            ``(7) For vintage year 2029, 0.3 percent of the emission 
        allowances established for that year under section 721(a).
    ``(d) Low Income Consumers.--For each vintage year starting in 
2012, the Administrator shall auction, pursuant to section 791, 15 
percent of the emission allowances established for each year under 
section 721(a), with the proceeds used for the benefit of low income 
consumers to fund the program set forth in subtitle C of title IV of 
American Clean Energy and Security Act of 2009 and the amendments made 
thereby.
    ``(e) Trade-vulnerable Industries.--
            ``(1) In general.--The Administrator shall allocate 
        emission allowances to energy-intensive, trade-exposed 
        entities, to be distributed in accordance with section 765, in 
        the following amounts:
                    ``(A) For vintage years 2012 and 2013, up to 2.0 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage year 2014, up to 15 percent of 
                the emission allowances established for that year under 
                section 721(a).
                    ``(C) For vintage year 2015, up to the product of--
                            ``(i) the amount specified in paragraph 
                        (2); multiplied by
                            ``(ii) the quantity of emission allowances 
                        established for 2015 under section 721(a) 
                        divided by the quantity of emission allowances 
                        established for 2014 under section 721(a).
                    ``(D) For vintage year 2016, up to the product of--
                            ``(i) the amount specified in paragraph 
                        (3); multiplied by
                            ``(ii) the quantity of emission allowances 
                        established for 2015 under section 721(a) 
                        divided by the quantity of emission allowances 
                        established for 2014 under section 721(a).
                    ``(E) For vintage years 2017 through 2025, up to 
                the product of--
                            ``(i) the amount specified in paragraph 
                        (4); multiplied by
                            ``(ii) the quantity of emission allowances 
                        established for that year under section 721(a) 
                        divided by the quantity of emission allowances 
                        established for 2016 under section 721(a).
                    ``(F) For vintage years 2026 through 2050, up to 
                the product of the amount specified in paragraph (4)--
                            ``(i) multiplied by the quantity of 
                        emission allowances established for the 
                        applicable year during 2026 through 2050 under 
                        section 721(a) divided by the quantity of 
                        emission allowances established for 2016 under 
                        section 721(a); and
                            ``(ii) multiplied by a factor that shall 
                        equal 90 percent for 2026 and decline 10 
                        percent for each year thereafter until reaching 
                        zero, except that, if the President modifies a 
                        percentage for a year under subparagraph (A) of 
                        section 767(c)(3), the highest percentage the 
                        President applies for any sector under that 
                        subparagraph for that year (not exceeding 100 
                        percent) shall be used for that year instead of 
                        the factor otherwise specified in this clause.
            ``(2) Carryover.--After the Administrator distributes 
        emission allowances pursuant to section 765 for any given 
        vintage year, any emission allowances allocated to energy-
        intensive, trade-exposed entities pursuant to this subsection 
        that have not been so distributed shall, in accordance with 
        subsection (s), be exchanged for allowances from the following 
        vintage year and treated as part of the allocation to such 
        entities for that later vintage year.
    ``(f) Deployment of Carbon Capture and Sequestration Technology.--
            ``(1) Annual allocation.--The Administrator shall allocate 
        emission allowances for the deployment of carbon capture and 
        sequestration technology to be distributed in accordance with 
        section 786 in the following amounts:
                    ``(A) For vintage years 2014 through 2017, 1.75 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2018 and 2019, 4.75 percent 
                of the emission allowances established for each year 
                under section 721(a).
                    ``(C) For vintage years 2020 through 2050, 5 
                percent of the emission allowances established for each 
                year under section 721(a).
            ``(2) Carryover.--If the Administrator has not distributed 
        all of the allowances allocated pursuant to this subsection for 
        a given vintage year by the end of that year, all such 
        undistributed emission allowances shall, in accordance with 
        subsection (s), be exchanged for allowances from the following 
        vintage year and treated as part of the allocation for the 
        deployment of carbon capture and sequestration technology under 
        this subsection for that later vintage year.
    ``(g) Investment in Energy Efficiency and Renewable Energy.--The 
Administrator shall allocate emission allowances to invest in energy 
efficiency and renewable energy as follows:
            ``(1) To be distributed in accordance with section 132 of 
        the American Clean Energy and Security Act of 2009 in the 
        following amounts:
                    ``(A) For vintage years 2012 through 2015, 9.5 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2016 through 2017, 6.5 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(C) For vintage years 2018 through 2021, 5.5 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(D) For vintage years 2022 through 2025, 1.0 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(E) For vintage years 2026 through 2050, 4.5 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(F) At the same time allowances are distributed 
                under subparagraph (D) for each of the vintage years 
                2022 through 2025, 3.55 percent of emission allowances 
                established under section 721(a) for the vintage year 
                four years after that vintage year shall also be 
                distributed (which shall be in addition to the emission 
                allowances distributed under subparagraph (E)).
            ``(2) To be distributed in accordance with section 304 of 
        the Energy Conservation and Production Act, as amended by 
        section 201 of the American Clean Energy and Security Act of 
        2009, for each vintage year from 2012 through 2050, 0.5 percent 
        of emission allowances established for that year under section 
        721(a).
    ``(h) Energy Research and Development.--
            ``(1) Energy innovation hubs.--For vintage years 2012 
        through 2050, the Administrator shall allocate 0.45 percent of 
        the emission allowances established under section 721(a) to be 
        distributed to Energy Innovation Hubs in accordance with 
        section 171 of the American Clean Energy and Security Act of 
        2009.
            ``(2) Advanced energy research.--For vintage years 2012 
        through 2050, the Administrator shall allocate 1.05 percent of 
        the emission allowances established under section 721(a) for 
        the Advanced Research Project Agency-Energy to be distributed 
        in accordance with section 172 of the American Clean Energy and 
        Security Act of 2009.
    ``(i) Investment in Clean Vehicle Technology.--The Administrator 
shall allocate emission allowances to invest in the development and 
deployment of clean vehicles, to be distributed in accordance with 
section 124 of the American Clean Energy and Security Act of 2009 in 
the following amounts:
            ``(1) For vintage years 2012 through 2017, 3 percent of the 
        emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2018 through 2025, 1 percent of the 
        emission allowances established for each year under section 
        721(a).
    ``(j) Domestic Fuel Production.--For vintage years 2014 through 
2026, the Administrator shall allocate and distribute according to 
section 787--
            ``(1) 2 percent of the emission allowances established for 
        each year under section 721(a) to domestic petroleum refineries 
        that are covered entities pursuant to section 700(13)(F)(viii), 
        including small business refiners; and
            ``(2) an additional 0.25 percent of the emissions 
        allowances established for each year under section 721(a) to 
        small business refiners that are covered entities pursuant to 
        section 700(13)(F)(viii).
    ``(k) Investment in Workers.--The Administrator shall auction 
pursuant to section 791 emission allowances for the benefit of workers 
pursuant to part 2 of subtitle B of the American Clean Energy and 
Security Act of 2009 in the following amounts, and shall deposit into 
the Climate Change Worker Adjustment Assistance Fund established 
pursuant to section 793, and report to the Secretary of Labor on, the 
proceeds from the sale of these allowances:
            ``(1) For vintage years 2012 through 2021, 0.5 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2022 through 2050, 1.0 percent of 
        the emission allowances established for each year under section 
        721(a).
All amounts deposited into the fund shall be available to the Secretary 
of Labor until expended to carry out part 2 of subtitle B of title IV 
of the American Clean Energy and Security Act of 2009. Of the amounts 
deposited, not more than $10,000,000 shall be available to the 
Secretary of Labor for Federal administration costs of such part 2 each 
fiscal year.
    ``(l) Domestic Adaptation.--The Administrator shall allocate 
emission allowances for domestic adaptation as follows:
            ``(1) To be distributed in accordance with section 453 of 
        the American Clean Energy and Security Act of 2009 in the 
        following amounts:
                    ``(A) For vintage years 2012 through 2021, 0.9 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2022 through 2026, 1.9 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(C) For vintage years 2027 through 2050, 3.9 
                percent of the emission allowances established for each 
                year under section 721(a).
            ``(2) For vintage year 2012 and thereafter, the 
        Administrator shall auction, pursuant to section 791, 0.1 
        percent of the emission allowances established for each year 
        under section 721(a), and shall deposit the proceeds in the 
        Climate Change Health Protection and Promotion Fund established 
        by section 467 of the American Clean Energy and Security Act of 
        2009.
    ``(m) Wildlife and Natural Resource Adaptation.--The Administrator 
shall allocate emission allowances for wildlife and natural resource 
adaptation as follows:
            ``(1) To be distributed to State agencies in accordance 
        with section 480(a) of the American Clean Energy and Security 
        Act of 2009 in the following amounts:
                    ``(A) For vintage years 2012 through 2021, 0.385 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2022 through 2026, 0.77 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(C) For vintage years 2027 through 2050, 1.54 
                percent of the emission allowances established for each 
                year under section 721(a).
            ``(2) To be auctioned pursuant to section 791, with the 
        proceeds to be deposited in the Natural Resources Climate 
        Change Adaptation Fund established pursuant to section 480(b), 
        in the following amounts:
                    ``(A) For vintage years 2012 through 2021, 0.615 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(B) For vintage years 2022 through 2026, 1.23 
                percent of the emission allowances established for each 
                year under section 721(a).
                    ``(C) For vintage years 2027 through 2050, 2.46 
                percent of the emission allowances established for each 
                year under section 721(a).
    ``(n) International Adaptation.--The Administrator shall allocate 
emission allowances for international adaptation to be distributed in 
accordance with part 2 of subtitle E of title IV of the American Clean 
Energy and Security Act of 2009 in the following amounts:
            ``(1) For vintage years 2012 through 2021, 1.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2022 through 2026, 2.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2027 through 2050, 4.0 percent of 
        the emission allowances established for each year under section 
        721(a).
    ``(o) International Clean Technology Deployment.--The Administrator 
shall allocate emission allowances for international clean technology 
deployment for distribution in accordance with subtitle D of title IV 
of the American Clean Energy and Security Act of 2009 in the following 
amounts:
            ``(1) For vintage years 2012 through 2021, 1.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(2) For vintage years 2022 through 2026, 2.0 percent of 
        the emission allowances established for each year under section 
        721(a).
            ``(3) For vintage years 2027 through 2050, 4.0 percent of 
        the emission allowances established for each year under section 
        721(a).
    ``(p) Release of Future Allowances.--The Administrator shall make 
future year allowances available by auctioning allowances, pursuant to 
section 791, in the following amounts:
            ``(1) In each of calendar years 2014 through 2019, a string 
        of 0.70 billion allowances with vintage years 12 to 17 years 
        after the year of the auction, with an equal number of 
        allowances from each vintage year in the string.
            ``(2) In each of calendar years 2020 through 2025, a string 
        of 0.50 billion allowances with vintage years 12 to 17 years 
        after the year of the auction, with an equal number of 
        allowances from each vintage year in the string.
            ``(3) In each of calendar years 2026 through 2030, a string 
        of 0.3 billion allowances with vintage years 12 to 17 years 
        after the year of the auction, with an equal number of 
        allowances from each vintage year in the string.
    ``(q) Deficit Reduction.--
            ``(1) For each of vintage years 2012 through 2025, any 
        allowances not allocated for distribution or auction pursuant 
        to section 781 or subsections (a) through (o) of this section, 
        or disbursed pursuant to section 790, shall be auctioned by the 
        Administrator pursuant to section 791 and the proceeds shall be 
        deposited into the Treasury.
            ``(2) Unless otherwise specified, any allowances allocated 
        pursuant to subsections (a) through (o) and not distributed by 
        March 31 of the calendar year following the allowance's vintage 
        year, shall be auctioned by the Administrator and the proceeds 
        shall be deposited into the Treasury.
            ``(3) For auctions conducted through calendar year 2020 
        pursuant to subsection (p), the auction proceeds shall be 
        deposited into the Treasury.
    ``(r) Climate Change Consumer Refund.--
            ``(1) For each of vintage years 2026 through 2050, the 
        Administrator shall auction the following allowances 
        established under section 721(a) and deposit the proceeds into 
        the Climate Change Consumer Refund Account:
                    ``(A) Any allowances not allocated for distribution 
                or auction pursuant to section 781 or subsections (a) 
                through (p) of this section, or disbursed pursuant to 
                section 790.
                    ``(B) Unless otherwise specified, any allowances 
                allocated pursuant to subsections (a) through (o) and 
                not distributed by March 31 of the calendar year 
                following the allowance's vintage year.
            ``(2) For auctions conducted pursuant to subsection (p) in 
        calendar years 2021 and thereafter, the Administrator shall 
        place the proceeds from the sales of the these allowances into 
        the Climate Change Consumer Refund Account.
            ``(3) Funds deposited into the Climate Change Consumer 
        Refund Account shall be used as specified in section 789 and 
        shall be available for expenditure, without further 
        appropriation or fiscal year limitation.
    ``(s) Treatment of Carryover Allowances.--
            ``(1) In general.--If there are undistributed allowances 
        from a vintage year for supplemental reductions pursuant to 
        section 781(c), energy-intensive, trade-exposed industries 
        pursuant to subsection (e)(2) of this section, or deployment of 
        carbon capture and sequestration technology pursuant to 
        subsection (f)(2) of this section, the Administrator shall--
                    ``(A) use the undistributed allowances to increase 
                for the same vintage year--
                            ``(i) the allocation of allowances to be 
                        auctioned for deficit reduction pursuant to 
                        subsection (q) or for consumer refunds pursuant 
                        to subsection (r);
                            ``(ii) the allocation of allowances to be 
                        auctioned for low income consumers pursuant to 
                        subsection (d); or
                            ``(iii) a combination of both; and
                    ``(B) except as provided in paragraph (2)--
                            ``(i) decrease by the same amount for the 
                        following vintage year the allocation for the 
                        purpose for which the allocation was increased 
                        pursuant to subparagraph (A); and
                            ``(ii) increase by the same amount for the 
                        following vintage year the allocation for the 
                        purpose for which the undistributed allowances 
                        were originally allocated.
            ``(2) Excess undistributed allowances.--(A) For each 
        vintage year for which this subsection applies, the 
        Administrator shall determine whether--
                    ``(i) the total quantity of undistributed 
                allowances for that vintage year that were allocated 
                pursuant to section 781(c), and subsections (e)(2) and 
                (f)(2) of this section, exceeds
                    ``(ii) the total quantity of allowances allocated 
                pursuant to subsection (d), (q) and (r) for the 
                following vintage year, decreased by the quantity of 
                allowances for that following vintage year set aside 
                for the reserve established by section 791(f).
            ``(B) If the Administrator determines under subparagraph 
        (A) that the quantity described in subparagraph (A)(i) exceeds 
        the quantity described in subparagraph (A)(ii), paragraph 
        (1)(B)(ii) of this subsection shall not apply. Instead, for 
        each purpose described in section 781(c), or subsections (e)(2) 
        or (f)(2) of this section for which undistributed allowances 
        for a given vintage year were allocated, the Administrator 
        shall increase the allocation for the following vintage year by 
        the amount that is the product of--
                    ``(i) the number of undistributed allowances for 
                that purpose, times
                    ``(ii) the quantity described in subparagraph 
                (A)(ii) divided by the quantity described in 
                subparagraph (A)(i).

``SEC. 783. ELECTRICITY CONSUMERS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Coal-fueled unit.--The term `coal-fueled unit' means 
        a utility unit that derives at least 85 percent of its heat 
        input from coal, petroleum coke, or any combination of these 2 
        fuels.
            ``(2) Electricity local distribution company.--The term 
        `electricity local distribution company' means an electric 
        utility--
                    ``(A) that has a legal, regulatory, or contractual 
                obligation to deliver electricity directly to retail 
                consumers in the United States, regardless of whether 
                that entity or another entity sells the electricity as 
                a commodity to those retail consumers; and
                    ``(B) the retail rates of which, except in the case 
                of an electric cooperative, are regulated or set by--
                            ``(i) a State regulatory authority;
                            ``(ii) a State or political subdivision 
                        thereof (or an agency or instrumentality of, or 
                        corporation wholly owned by, either of the 
                        foregoing); or
                            ``(iii) an Indian tribe pursuant to tribal 
                        law.
            ``(3) Electricity savings; renewable energy resource.--The 
        terms `electricity savings' and `renewable energy resource' 
        shall have the meaning given those terms in section 610 of the 
        Public Utility Regulatory Policies Act of 1978 (as added by 
        section 101 of the American Clean Energy and Security Act of 
        2009).
            ``(4) Independent power production facility.--The term 
        `independent power production facility' means a facility--
                    ``(A) that is used for the generation of electric 
                energy, at least 80 percent of which is sold at 
                wholesale; and
                    ``(B) the sales of the output of which are not 
                subject to retail rate regulation or setting of retail 
                rates by--
                            ``(i) a State regulatory authority;
                            ``(ii) a State or political subdivision 
                        thereof (or an agency or instrumentality of, or 
                        corporation wholly owned by, either of the 
                        foregoing);
                            ``(iii) an electric cooperative; or
                            ``(iv) an Indian tribe pursuant to tribal 
                        law.
            ``(5) Long-term contract generator.--The term `long-term 
        contract generator' means a qualifying small power production 
        facility, a qualifying cogeneration facility ), an independent 
        power production facility, or a facility for the production of 
        electric energy for sale to others that is owned and operated 
        by an electric cooperative that is--
                    ``(A) a covered entity; and
                    ``(B) as of the date of enactment of this title--
                            ``(i) a facility with 1 or more sales or 
                        tolling agreements executed before March 1, 
                        2007, that govern the facility's electricity 
                        sales and provide for sales at a price (whether 
                        a fixed price or a price formula) for 
                        electricity that does not allow for recovery of 
                        the costs of compliance with the limitation on 
                        greenhouse gas emissions under this title, 
                        provided that such agreements are not between 
                        entities that are affiliates of one another; or
                            ``(ii) a facility consisting of 1 or more 
                        cogeneration units that makes useful thermal 
                        energy available to an industrial or commercial 
                        process with 1 or more sales agreements 
                        executed before March 1, 2007, that govern the 
                        facility's useful thermal energy sales and 
                        provide for sales at a price (whether a fixed 
                        price or price formula) for useful thermal 
                        energy that does not allow for recovery of the 
                        costs of compliance with the limitation on 
                        greenhouse gas emissions under this title, 
                        provided that such agreements are not between 
                        entities that are affiliates of one another.
            ``(6) Merchant coal unit.--The term `merchant coal unit' 
        means a coal-fueled unit that--
                    ``(A) is or is part of a covered entity;
                    ``(B) is not owned by a Federal, State, or regional 
                agency or power authority; and
                    ``(C) generates electricity solely for sale to 
                others, provided that all or a portion of such sales 
                are made by a separate legal entity that--
                            ``(i) has a full or partial ownership or 
                        leasehold interest in the unit, as certified in 
                        accordance with such requirements as the 
                        Administrator shall prescribe; and
                            ``(ii) is not subject to retail rate 
                        regulation or setting of retail rates by--
                                    ``(I) a State regulatory authority;
                                    ``(II) a State or political 
                                subdivision thereof (or an agency or 
                                instrumentality of, or corporation 
                                wholly owned by, either of the 
                                foregoing);
                                    ``(III) an electric cooperative; or
                                    ``(IV) an Indian tribe pursuant to 
                                tribal law.
            ``(7) Merchant coal unit sales.--The term `merchant coal 
        unit sales' means sales to others of electricity generated by a 
        merchant coal unit that are made by the owner or leaseholder 
        described in paragraph (6)(C).
            ``(8) New coal-fueled unit.--The term `new coal-fueled 
        unit' means a coal-fueled unit that commenced operation on or 
        after January 1, 2009 and before September 30, 2012.
            ``(9) New merchant coal unit.--The term `new merchant coal 
        unit' means a merchant coal unit--
                    ``(A) that commenced operation on or after January 
                1, 2009 and before September 30, 2012; and
                    ``(B) the actual, on-site construction of which 
                commenced prior to January 1, 2009.
            ``(10) Qualifying small power production facility; 
        qualifying cogeneration facility.--The terms `qualifying small 
        power production facility' and `qualifying cogeneration 
        facility' have the meanings given those terms in section 
        3(17)(C) and 3(18)(B) of the Federal Power Act (16 U.S.C. 
        796(17)(C) and 796(18)(B)).
            ``(11) Small ldc.--The term `small LDC' means, for any 
        given year, an electricity local distribution company that 
        delivered less than 4,000,000 megawatt hours of electric energy 
        directly to retail consumers in the preceding year.
            ``(12) State regulatory authority.--The term `State 
        regulatory authority' has the meaning given that term in 
        section 3(17) of the Public Utility Regulatory Policies Act of 
        1978 (16 U.S.C. 2602(17)).
            ``(13) Useful thermal energy.--The term `useful thermal 
        energy'has the meaning given that term in section 371(7) of the 
        Energy Policy and Conservation Act (42 U.S.C. 6341(7)).
    ``(b) Electricity Local Distribution Companies.--
            ``(1) Distribution of allowances.--Not later than September 
        30 of 2011 and each calendar year thereafter through 2028, the 
        Administrator shall distribute to electricity local 
        distribution companies for the benefit of retail ratepayers the 
        quantity of emission allowances allocated for the following 
        vintage year pursuant to section 782(a)(1). Notwithstanding the 
        preceding sentence, the Administrator shall withhold from 
        distribution under this subsection a quantity of emission 
        allowances equal to the lesser of 14.3 percent of the quantity 
        of emission allowances allocated under section 782(a)(1) for 
        the relevant vintage year, or 105 percent of the emission 
        allowances for the relevant vintage year that the Administrator 
        anticipates will be distributed to merchant coal units and to 
        long-term contract generators, respectively, under subsections 
        (c) and (d). If not required by subsections (c) and (d) to 
        distribute all of these reserved allowances, the Administrator 
        shall distribute any remaining emission allowances to 
        electricity local distribution companies in accordance with 
        this subsection.
            ``(2) Distribution based on emissions.--
                    ``(A) In general.--For each vintage year, 50 
                percent of the emission allowances available for 
                distribution under paragraph (1), after reserving 
                allowances for distribution under subsections (c) and 
                (d), shall be distributed by the Administrator among 
                individual electricity local distribution companies 
                ratably based on the annual average carbon dioxide 
                emissions attributable to generation of electricity 
                delivered at retail by each such company during the 
                base period determined under subparagraph (B).
                    ``(B) Base period.--
                            ``(i) Vintage years 2012 and 2013.--For 
                        vintage years 2012 and 2013, an electricity 
                        local distribution company's base period shall 
                        be--
                                    ``(I) calendar years 2006 through 
                                2008; or
                                    ``(II) any 3 consecutive calendar 
                                years between 1999 and 2008, inclusive, 
                                that such company selects, provided 
                                that the company timely informs the 
                                Administrator of such selection.
                            ``(ii) Vintage years 2014 and thereafter.--
                        For vintage years 2014 and thereafter, the base 
                        period shall be--
                                    ``(I) the base period selected 
                                under clause (i); or
                                    ``(II) calendar year 2012, in the 
                                case of an electricity local 
                                distribution company that owns, co-
                                owns, or purchases through a power 
                                purchase agreement (whether directly or 
                                through a cooperative arrangement) a 
                                substantial portion of the electricity 
                                generated by a new coal-fueled unit, 
                                provided that such company timely 
                                informs the Administrator of its 
                                election to use 2012 as its base 
                                period.
                    ``(C) Determination of emissions.--
                            ``(i) Determination for 1999-2008.--As part 
                        of the regulations promulgated pursuant to 
                        subsection (f), the Administrator, after 
                        consultation with the Energy Information 
                        Administration, shall determine the average 
                        amount of carbon dioxide emissions attributable 
                        to generation of electricity delivered at 
                        retail by each electricity local distribution 
                        company for each of the years 1999 through 
                        2008, taking into account entities' electricity 
                        generation, electricity purchases, and 
                        electricity sales. In the case of any 
                        electricity local distribution company that 
                        owns, co-owns, or purchases through a power 
                        purchase agreement (whether directly or through 
                        a cooperative arrangement) a substantial 
                        portion of the electricity generated by, a 
                        coal-fueled unit that commenced operation after 
                        January 1, 2006 and before December 31, 2008, 
                        the Administrator shall adjust the emissions 
                        attributable to such company's retail 
                        deliveries in calendar years 2006 through 2008 
                        to reflect the emissions that would have 
                        occurred if the relevant unit were in operation 
                        during the entirety of such 3-year period.
                            ``(ii) Adjustments for new coal-fueled 
                        units.--
                                    ``(I) Vintage years 2012 and 
                                2013.--For purposes of emission 
                                allowance distributions for vintage 
                                years 2012 and 2013, in the case of any 
                                electricity local distribution company 
                                that owns, co-owns, or purchases 
                                through a power purchase agreement 
                                (whether directly or through a 
                                cooperative arrangement) a substantial 
                                portion of the electricity generated 
                                by, a new coal-fueled unit, the 
                                Administrator shall adjust the 
                                emissions attributable to such 
                                company's retail deliveries in the 
                                applicable base period to reflect the 
                                emissions that would have occurred if 
                                the new coal-fueled unit were in 
                                operation during such period.
                                    ``(II) Vintage year 2014 and 
                                thereafter.--Not later than necessary 
                                for use in making emission allowance 
                                distributions under this subsection for 
                                vintage year 2014, the Administrator 
                                shall, for any electricity local 
                                distribution company that owns, co-
                                owns, or purchases through a power 
                                purchase agreement (whether directly or 
                                through a cooperative arrangement) a 
                                substantial portion of the electricity 
                                generated by a new coal-fueled unit and 
                                has selected calendar year 2012 as its 
                                base period pursuant to subparagraph 
                                (B)(ii)(II), determine the amount of 
                                carbon dioxide emissions attributable 
                                to generation of electricity delivered 
                                at retail by such company in calendar 
                                year 2012. If the relevant new coal-
                                fueled unit was not yet operational by 
                                January 1, 2012, the Administrator 
                                shall adjust such determination to 
                                reflect the emissions that would have 
                                occurred if such unit were in operation 
                                for all of calendar year 2012.
                            ``(iii) Requirements.--Determinations under 
                        this paragraph shall be as precise as 
                        practicable, taking into account the nature of 
                        data currently available and the nature of 
                        markets and regulation in effect in various 
                        regions of the country. The following 
                        requirements shall apply to such 
                        determinations:
                                    ``(I) The Administrator shall 
                                determine the amount of fossil fuel-
                                based electricity delivered at retail 
                                by each electricity local distribution 
                                company, and shall use appropriate 
                                emission factors to calculate carbon 
                                dioxide emissions associated with the 
                                generation of such electricity.
                                    ``(II) Where it is not practical to 
                                determine the precise fuel mix for the 
                                electricity delivered at retail by an 
                                individual electricity local 
                                distribution company, the Administrator 
                                may use the best available data, 
                                including average data on a regional 
                                basis with reference to Regional 
                                Transmission Organizations or regional 
                                entities (as that term is defined in 
                                section 215(a)(7) of the Federal Power 
                                Act (16 U.S.C. 824o(a)(7)), to estimate 
                                fuel mix and emissions. Different 
                                methodologies may be applied in 
                                different regions if appropriate to 
                                obtain the most accurate estimate.
            ``(3) Distribution based on deliveries.--
                    ``(A) Initial formula.--Except as provided in 
                subparagraph (B), for each vintage year, the 
                Administrator shall distribute 50 percent of the 
                emission allowances available for distribution under 
                paragraph (1), after reserving allowances for 
                distribution under subsections (c) and (d), among 
                individual electricity local distribution companies 
                ratably based on each electricity local distribution 
                company's annual average retail electricity deliveries 
                for calendar years 2006 through 2008, unless the owner 
                or operator of the company selects 3 other consecutive 
                years between 1999 and 2008, inclusive, and timely 
                notifies the Administrator of its selection.
                    ``(B) Updating.--Prior to distributing 2015 vintage 
                year emission allowances under this paragraph and at 3-
                year intervals thereafter, the Administrator shall 
                update the distribution formula under this paragraph to 
                reflect changes in each electricity local distribution 
                company's service territory since the most recent 
                formula was established. For each successive 3-year 
                period, the Administrator shall distribute allowances 
                ratably among individual electricity local distribution 
                companies based on the product of--
                            ``(i) each electricity local distribution 
                        company's average annual deliveries per 
                        customer during calendar years 2006 through 
                        2008, or during the 3 alternative consecutive 
                        years selected by such company under 
                        subparagraph (A); and
                            ``(ii) the number of customers of such 
                        electricity local distribution company in the 
                        most recent year in which the formula is 
                        updated under this subparagraph.
            ``(4) Prohibition against excess distributions.--The 
        regulations promulgated under subsection (f) shall ensure that, 
        notwithstanding paragraphs (2) and (3), no electricity local 
        distribution company shall receive a greater quantity of 
        allowances under this subsection than is necessary to offset 
        any increased electricity costs to such company's retail 
        ratepayers, including increased costs attributable to purchased 
        power costs, due to enactment of this title. Any emission 
        allowances withheld from distribution to an electricity local 
        distribution company pursuant to this paragraph shall be 
        distributed among all remaining electricity local distribution 
        companies ratably based on emissions pursuant to paragraph (2).
            ``(5) Use of allowances.--
                    ``(A) Ratepayer benefit.--Emission allowances 
                distributed to an electricity local distribution 
                company under this subsection shall be used exclusively 
                for the benefit of retail ratepayers of such 
                electricity local distribution company and may not be 
                used to support electricity sales or deliveries to 
                entities or persons other than such ratepayers.
                    ``(B) Ratepayer classes.--In using emission 
                allowances distributed under this subsection for the 
                benefit of ratepayers, an electricity local 
                distribution company shall ensure that ratepayer 
                benefits are distributed--
                            ``(i) among ratepayer classes ratably based 
                        on electricity deliveries to each class; and
                            ``(ii) equitably among individual 
                        ratepayers within each ratepayer class, 
                        including entities that receive emission 
                        allowances pursuant to part F.
                    ``(C) Limitation.--In general, an electricity local 
                distribution company shall not use the value of 
                emission allowances distributed under this subsection 
                to provide to any ratepayer a rebate that is based 
                solely on the quantity of electricity delivered to such 
                ratepayer. To the extent an electricity local 
                distribution company uses the value of emission 
                allowances distributed under this subsection to provide 
                rebates, it shall, to the maximum extent practicable, 
                provide such rebates with regard to the fixed portion 
                of ratepayers' bills or as a fixed credit or rebate on 
                electricity bills.
                    ``(D) Industrial ratepayers.--Notwithstanding 
                subparagraph (C), if compliance with the requirements 
                of this title results (or would otherwise result) in an 
                increase in electricity costs for industrial retail 
                ratepayers of any given electricity local distribution 
                company (including entities that receive emission 
                allowances pursuant to part F), such electricity local 
                distribution company--
                            ``(i) shall pass through to industrial 
                        retail ratepayers their ratable share (based on 
                        deliveries to each ratepayer class) of the 
                        value of the emission allowances distributed to 
                        such company under this subsection, to reduce 
                        electricity cost impacts on such ratepayers; 
                        and
                            ``(ii) may do so based on the quantity of 
                        electricity delivered to individual industrial 
                        retail ratepayers.
                    ``(E) Guidelines.--As part of the regulations 
                promulgated under subsection (f), the Administrator 
                shall, after consultation with State regulatory 
                authorities, prescribe guidelines for the 
                implementation of the requirements of this paragraph. 
                Such guidelines shall include requirements to ensure 
                that industrial retail ratepayers (including entities 
                that receive emission allowances under part F) receive 
                their ratable share of the value of the allowances 
                distributed to each electricity local distribution 
                company pursuant to this subsection.
            ``(6) Regulatory proceedings.--
                    ``(A) Requirement.--No electricity local 
                distribution company shall be eligible to receive 
                emission allowances under this subsection or subsection 
                (e) unless the State regulatory authority with 
                authority over such company's retail rates, or the 
                entity with authority to regulate or set retail 
                electricity rates of an electricity local distribution 
                company not regulated by a State regulatory authority, 
                has--
                            ``(i) after public notice and an 
                        opportunity for comment, promulgated a 
                        regulation or completed a rate proceeding (or 
                        the equivalent, in the case of a ratemaking 
                        entity other than a State regulatory authority) 
                        that provides for the full implementation of 
                        the requirements of paragraph (5) of this 
                        subsection and the requirements of subsection 
                        (e); and
                            ``(ii) made available to the Administrator 
                        and the public a report describing, in adequate 
                        detail, the manner in which the requirements of 
                        paragraph (5) and the requirements of 
                        subsection (e) will be implemented.
                    ``(B) Updating.--The Administrator shall require, 
                as a condition of continued receipt of emission 
                allowances under this subsection by an electricity 
                local distribution company, that a new regulation be 
                promulgated or rate proceeding be completed , after 
                public notice and an opportunity for comment, and a new 
                report be made available to the Administrator and the 
                public, pursuant to subparagraph (A), not less 
                frequently than every 5 years.
            ``(7) Plans and reporting.--
                    ``(A) Regulations.--As part of the regulations 
                promulgated under subsection (f), the Administrator 
                shall prescribe requirements governing plans and 
                reports to be submitted in accordance with this 
                paragraph.
                    ``(B) Plans.--Not later than April 30 of 2011 and 
                every 5 years thereafter through 2026, each electricity 
                local distribution company shall submit to the 
                Administrator a plan, approved by the State regulatory 
                authority or other entity charged with regulating tor 
                setting the retail rates of such company, describing 
                such company's plans for the disposition of the value 
                of emission allowances to be received pursuant to this 
                subsection and subsection (e), in accordance with the 
                requirements of this subsection and subsection (e). 
                Such plan shall include a description of the manner in 
                which the company will provide to industrial retail 
                ratepayers (including entities that receive emission 
                allowances under part F) their ratable share of the 
                value of such allowances.
                    ``(C) Reports.--Not later than June 30 of 2013 and 
                each calendar year thereafter through 2031, each 
                electricity local distribution company shall submit a 
                report to the Administrator, and to the relevant State 
                regulatory authority or other entity charged with 
                regulating or setting the retail electricity rates of 
                such company, describing the disposition of the value 
                of any emission allowances received by such company in 
                the prior calendar year pursuant to this subsection and 
                subsection (e), including--
                            ``(i) a description of sales, transfer, 
                        exchange, or use by the company for compliance 
                        with obligations under this title, of any such 
                        emission allowances;
                            ``(ii) the monetary value received by the 
                        company, whether in money or in some other 
                        form, from the sale, transfer, or exchange of 
                        any such emission allowances;
                            ``(iii) the manner in which the company's 
                        disposition of any such emission allowances 
                        complies with the requirements of this 
                        subsection and of subsection (e), including 
                        each of the requirements of paragraph (5) of 
                        this subsection, including the requirement that 
                        industrial retail ratepayers (including 
                        entities that receive emission allowances under 
                        part F) receive their ratable share of the 
                        value of such allowances; and
                            ``(iv) such other information as the 
                        Administrator may require pursuant to 
                        subparagraph (A).
                    ``(D) Publication.--The Administrator shall make 
                available to the public all plans and reports submitted 
                under this subsection, including by publishing such 
                plans and reports on the Internet.
            ``(8) Audits.--Each year, the Administrator shall audit a 
        representative sample of electricity local distribution 
        companies to ensure that emission allowances distributed under 
        this subsection have been used exclusively for the benefit of 
        retail ratepayers and that such companies are complying with 
        the requirements of this subsection and of subsection (e), 
        including the requirement that industrial retail ratepayers 
        (including entities that receive emission allowances under part 
        F) receive their ratable share of the value of such allowances. 
        In selecting companies for audit, the Administrator shall take 
        into account any credible evidence of noncompliance with such 
        requirements. The Administrator shall make available to the 
        public a report describing the results of each such audit, 
        including by publishing such report on the Internet.
            ``(9) Enforcement.--A violation of any requirement of this 
        subsection or of subsection (e) shall be a violation of this 
        Act. Each emission allowance the value of which is used in 
        violation of the requirements of this subsection or of 
        subsection (e) shall be a separate violation.
    ``(c) Merchant Coal Units.--
            ``(1) Qualifying emissions.--The qualifying emissions for a 
        merchant coal unit for a given calendar year shall be the 
        product of the number of megawatt hours of merchant coal unit 
        sales generated by such unit in such calendar year and the 
        average carbon dioxide emissions per megawatt hour generated by 
        such unit during the base period under paragraph (2), provided 
        that the number of megawatt hours in a given calendar year for 
        purposes of such calculation shall be reduced in proportion to 
        the portion of such unit's carbon dioxide emissions that are 
        either--
                    ``(A) captured and sequestered in such calendar 
                year; or
                    ``(B) attributable to the combustion or 
                gasification of biomass, to the extent that the owner 
                or operator of the unit is not required to hold 
                emission allowances for such emissions.
            ``(2) Base period.--For purposes of this subsection, the 
        base period for a merchant coal unit shall be--
                    ``(A) calendar years 2006 through 2008; or
                    ``(B) in the case of a new merchant coal unit--
                            ``(i) the first full calendar year of 
                        operation of such unit, provided that such year 
                        shall not be any year after calendar year 2012; 
                        or
                            ``(ii) calendar year 2012, if such unit 
                        commences operation on or after January 1, 
                        2012.
            ``(3) Phase-down schedule.--The Administrator shall 
        identify an annual phase-down factor, applicable to 
        distributions to merchant coal units for each of vintage years 
        2012 through 2029, that corresponds to the overall decline in 
        the amount of emission allowances allocated to the electricity 
        sector in such years pursuant to section 782(a)(1). Such factor 
        shall--
                    ``(A) for vintage year 2012, be equal to 1.0;
                    ``(B) for each of vintage years 2013 through 2029, 
                correspond to the quotient of--
                            ``(i) the quantity of emission allowances 
                        allocated under section 782(a)(1) for such 
                        vintage year; divided by
                            ``(ii) the quantity of emission allowances 
                        allocated under section 782(a)(1) for vintage 
                        year 2012.
            ``(4) Distribution of emission allowances.--Not later than 
        March 1 of 2013 and each calendar year through 2030, the 
        Administrator shall distribute emission allowances of the 
        preceding vintage year to the owner or operator of each 
        merchant coal unit described in subsection (a)(6)(C) in an 
        amount equal to the product of--
                    ``(A) 0.5;
                    ``(B) the qualifying emissions for such merchant 
                coal unit for the preceding year, as determined under 
                paragraph (1); and
                    ``(C) the phase-down factor for the preceding 
                calendar year, as identified under paragraph (3).
            ``(5) Adjustment.--
                    ``(A) Study.--Not later than July 1, 2014, the 
                Administrator, in consultation with the Federal Energy 
                Regulatory Commission, shall complete a study to 
                determine whether the allocation formula under 
                paragraph (3) is resulting in, or is likely to result 
                in, windfall profits to merchant coal generators or 
                substantially disparate treatment of merchant coal 
                generators operating in different markets or regions.
                    ``(B) Regulation.--If the Administrator, in 
                consultation with the Federal Energy Regulatory 
                Commission, makes an affirmative finding of windfall 
                profits or disparate treatment under subparagraph (A), 
                the Administrator shall, not later than 18 months after 
                the completion of the study described in subparagraph 
                (A), promulgate regulations providing for the 
                adjustment of the allocation formula under paragraph 
                (3) to mitigate, to the extent practicable, such 
                windfall profits, if any, and such disparate treatment, 
                if any.
            ``(6) Limitation on allowances.--Notwithstanding paragraph 
        (4) or (5), for each vintage year the Administrator shall 
        distribute under this subsection no more than 10 percent of the 
        total quantity of emission allowances available for such 
        vintage year for distribution to the electricity sector under 
        section 782(a)(1). If the quantity of emission allowances that 
        would otherwise be distributed pursuant to paragraph (4) or (5) 
        for any vintage year would exceed such limit, the Administrator 
        shall distribute 10 percent of the total emission allowances 
        available for distribution under section 782(a)(1) for such 
        vintage year ratably among merchant coal generators based on 
        the applicable formula under paragraph (4) or (5).
            ``(7) Eligibility.--The owner or operator of a merchant 
        coal unit shall not be eligible to receive emission allowances 
        under this subsection for any vintage year for which such owner 
        or operator has elected to receive emission allowances for the 
        same unit under subsection (d).
    ``(d) Long-term Contract Generators.--
            ``(1) Distribution.--Not later than March 1 of 2013 and 
        each calendar year through 2030, the Administrator shall 
        distribute to the owner or operator of each long-term contract 
        generator a quantity of emission allowances of the preceding 
        vintage year that is equal to the sum of--
                    ``(A) the number of tons of carbon dioxide emitted 
                as a result of a qualifying electricity sales agreement 
                referred to in subsection (a)(5)(B)(i); and
                    ``(B) the incremental number of tons of carbon 
                dioxide emitted solely as a result of a qualifying 
                thermal sales agreement referred to in subsection 
                (a)(5)(B)(ii), provided that in no event shall the 
                Administrator distribute more than 1 emission allowance 
                for the same ton of emissions.
            ``(2) Limitation on allowances.-- Notwithstanding paragraph 
        (1), for each vintage year the Administrator shall distribute 
        under this subsection no more than 4.3 percent of the total 
        quantity of emission allowances available for such vintage year 
        for distribution to the electricity sector under section 
        782(a)(1). If the quantity of emission allowances that would 
        otherwise be distributed pursuant to paragraph (1) for any 
        vintage year would exceed such limit, the Administrator shall 
        distribute 4.3 percent of the total emission allowances 
        available for distribution under section 782(a)(1) for such 
        vintage year ratably among long-term contract generators based 
        on paragraph (1).
            ``(3) Eligibility.--
                    ``(A) Facility eligibility.--The owner or operator 
                of a facility shall cease to be eligible to receive 
                emission allowances under this subsection upon the 
                earliest date on which the facility no longer meets 
                each and every element of the definition of a long-term 
                contract generator under subsection (a)(5).
                    ``(B) Contract eligibility.--The owner or operator 
                of a facility shall cease to be eligible to receive 
                emission allowances under this subsection based on an 
                electricity or thermal sales agreement referred to in 
                subsection (a)(5)(B) upon the earliest date that such 
                agreement--
                            ``(i) expires;
                            ``(ii) is terminated; or
                            ``(iii) is amended in any way that changes 
                        the location of the facility, the price 
                        (whether a fixed price or price formula) for 
                        electricity or thermal energy sold under such 
                        agreement, the quantity of electricity or 
                        thermal energy sold under the agreement, or the 
                        expiration or termination date of the 
                        agreement.
            ``(4) Demonstration of eligibility.--To be eligible to 
        receive allowance distributions under this subsection, the 
        owner or operator of a long-term contract generator shall 
        submit each of the following in writing to the Administrator 
        within 180 days after the date of enactment of this title, and 
        not later than September 30 of each vintage year for which such 
        generator wishes to receive emission allowances:
                    ``(A) A certificate of representation described in 
                section 700(15).
                    ``(B) An identification of each owner and each 
                operator of the facility.
                    ``(C) An identification of the units at the 
                facility and the location of the facility.
                    ``(D) A written certification by the designated 
                representative that the facility meets all the 
                requirements of the definition of a long-term contract 
                generator.
                    ``(E) The expiration date of each qualifying 
                electricity or thermal sales agreement referred to in 
                subsection (a)(5)(B).
                    ``(F) A copy of each qualifying electricity or 
                thermal sales agreement referred to in subsection 
                (a)(5)(B).
            ``(5) Notification.--Not later than 30 days after, in 
        accordance with paragraph (3), a facility or an agreement 
        ceases to meet the eligibility requirements for distribution of 
        emission allowances pursuant to this subsection, the designated 
        representative of such facility shall notify the Administrator 
        in writing when, and on what basis, such facility or agreement 
        ceased to meet such requirements.
    ``(e) Small LDCs.--
            ``(1) Distribution.--Not later than September 30 of each 
        calendar year from 2011 through 2028, the Administrator shall, 
        in accordance with this subsection, distribute emission 
        allowances allocated pursuant to section 782(a)(2) for the 
        following vintage year. Such allowances shall be distributed 
        ratably among small LDCs based on historic emissions in 
        accordance with the same measure of such emissions applied to 
        each such small LDC for the relevant vintage year under 
        subsection (b)(2) of this section.
            ``(2) Uses.--A small LDC receiving allowances under this 
        section shall use such allowances exclusively for the following 
        purposes:
                    ``(A) Cost-effective programs to achieve 
                electricity savings, provided that such savings shall 
                not be transferred or used for compliance with section 
                610 of the Public Utility Regulatory Policies Act of 
                1978.
                    ``(B) Deployment of technologies to generate 
                electricity from renewable energy resources, provided 
                that any Federal renewable electricity credits issued 
                based on generation supported under this section shall 
                be submitted to the Federal Energy Regulatory 
                Commission for voluntary retirement and shall not be 
                used for compliance with section 610 of the Public 
                Utility Regulatory Policies Act of 1978.
                    ``(C) Assistance programs to reduce electricity 
                costs for low-income residential ratepayers of such 
                small LDC, provided that such assistance is made 
                available equitably to all residential ratepayers below 
                a certain income level, which shall not be higher than 
                200 percent of the poverty line (as that term is 
                defined in section 673(2) of the Community Services 
                Block Grant Act (42 U.S.C. 9902(2)).
            ``(3) Requirements.--As part of the regulations promulgated 
        under subsection (f), the Administrator shall prescribe--
                    ``(A) after consultation with the Federal Energy 
                Regulatory Commission, requirements to ensure that 
                programs and projects under paragraph (2)(A) and (B) 
                are consistent with the standards established by, and 
                effectively supplement electricity savings and 
                generation of electricity from renewable energy 
                resources achieved by, the Combined Efficiency and 
                Renewable Electricity Standard established under 
                section 610 of the Public Utility Regulatory Policies 
                Act of 1978;
                    ``(B) eligibility criteria and guidelines for 
                consumer assistance programs for low-income residential 
                ratepayers under paragraph (2)(C); and
                    ``(C) such other requirements as the Administrator 
                determines appropriate to ensure compliance with the 
                requirements of this subsection.
            ``(4) Reporting.--Reports submitted under subsection (b)(7) 
        shall include, in accordance with such requirements as the 
        Administrator may prescribe--
                    ``(A) a description of any facilities deployed 
                under paragraph (2)(A), the quantity of resulting 
                electricity generation from renewable energy resources;
                    ``(B) an assessment demonstrating the cost-
                effectiveness of, and electricity savings achieved by, 
                programs supported under paragraph (2)(B); and
                    ``(C) a description of assistance provided to low-
                income retail ratepayers under paragraph (2)(C).
    ``(f) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator, in consultation with the 
Federal Energy Regulatory Commission, shall promulgate regulations to 
implement the requirements of this section.

``SEC. 784. NATURAL GAS CONSUMERS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Cost-effective.--The term `cost-effective', with 
        respect to an energy efficiency program, means that the program 
        meets the Total Resource Cost Test, which requires that the net 
        present value of economic benefits over the life of the 
        program, including avoided supply and delivery costs and 
        deferred or avoided investments, is greater than the net 
        present value of the economic costs over the life of the 
        program, including program costs and incremental costs borne by 
        the energy consumer.
            ``(2) Natural gas local distribution company.--The term 
        `natural gas local distribution company' means a natural gas 
        local distribution company that is a covered entity.
            ``(3) Non-covered entity.--The term `non-covered entity' 
        means, when used in reference to a date or period prior to the 
        enactment of this title, an entity that would not have been a 
        covered entity if this title had been in effect during such 
        date or period.
            ``(4) State regulatory authority.--The term `State 
        regulatory authority' has the meaning given the term `State 
        commission' in section 2(8) of the Natural Gas Act (15 U.S.C. 
        717a(8)).
    ``(b) Distribution.--Not later than June 30 of 2015 and each 
calendar year thereafter through 2028, the Administrator shall 
distribute to natural gas local distribution companies for the benefit 
of retail ratepayers the quantity of emission allowances allocated for 
the following vintage year pursuant to section 782(b). Such allowances 
shall be distributed among local natural gas distribution companies 
based on the following formula:
            ``(1) Initial formula.--Except as provided in paragraph 
        (2), for each vintage year, the Administrator shall distribute 
        emission allowances among natural gas local distribution 
        companies ratably based on each such company's annual average 
        retail natural gas deliveries for 2006 through 2008 to 
        customers that were non-covered entities, unless the owner or 
        operator of the company selects 3 other consecutive years 
        between 1999 and 2008, inclusive, and timely notifies the 
        Administrator of its selection.
            ``(2) Updating.--Prior to distributing 2019 vintage year 
        emission allowances and at 3-year intervals thereafter, the 
        Administrator shall update the distribution formula under this 
        subsection to reflect changes in each natural gas local 
        distribution company's service territory since the most recent 
        formula was established. For each successive 3-year period, the 
        Administrator shall distribute allowances ratably among natural 
        gas local distribution companies based on the product of--
                    ``(A) each natural gas local distribution company's 
                average annual natural gas deliveries per customer to 
                customers that were non-covered entities during 
                calendar years 2006 through 2008, or during the 3 
                alternative consecutive years selected by such company 
                under paragraph (1); and
                    ``(B) the number of customers of such natural gas 
                local distribution company that are not covered 
                entities in the most recent year in which the formula 
                is updated under this paragraph.
    ``(c) Use of Allowances.--
            ``(1) Ratepayer benefit.--Emission allowances distributed 
        to a natural gas local distribution company under this section 
        shall be used exclusively for the benefit of retail ratepayers 
        of such natural gas local distribution company other than 
        covered entities and may not be used to support natural gas 
        sales or deliveries to entities or persons other than such 
        ratepayers.
            ``(2) Ratepayer classes.--In using emission allowances 
        distributed under this section for the benefit of ratepayers, a 
        natural gas local distribution company shall ensure that 
        ratepayer benefits are distributed--
                    ``(A) among ratepayer classes ratably based on 
                natural gas deliveries to each class, excluding 
                deliveries to covered entities; and
                    ``(B) equitably among individual ratepayers other 
                than covered entities within each ratepayer class.
            ``(3) Limitation.--In general, a natural gas local 
        distribution company shall not use the value of emission 
        allowances distributed under this section to provide to any 
        ratepayer a rebate that is based solely on the quantity of 
        natural gas delivered to such ratepayer. To the extent a 
        natural gas local distribution company uses the value of 
        emission allowances distributed under this section to provide 
        rebates, it shall, to the maximum extent practicable, provide 
        such rebates with regard to the fixed portion of ratepayers' 
        bills or as a fixed creditor rebate on natural gas bills.
            ``(4) Industrial ratepayers.--Notwithstanding paragraph 
        (3), if compliance with the requirements of this title results 
        (or would otherwise result) in an increase in natural gas costs 
        for industrial retail ratepayers of any given natural gas local 
        distribution company that are not covered entities (including 
        entities that receive emission allowances pursuant to part F), 
        such natural gas local distribution company--
                    ``(A) shall pass through to industrial retail 
                ratepayers that are not covered entities their ratable 
                share (based on deliveries to each ratepayer class) of 
                the value of the emission allowances distributed to 
                such company under this subsection, to reduce natural 
                gas cost impacts on such ratepayers; and
                    ``(B) may do so based on the quantity of natural 
                gas delivered to individual industrial retail 
                ratepayers.
            ``(5) Energy efficiency programs.--The value of no less 
        than one third of the emission allowances distributed to 
        natural gas local distribution companies pursuant to this 
        section in any calendar year shall be used for cost-effective 
        energy efficiency programs for natural gas consumers. Such 
        programs must be authorized and overseen by the State 
        regulatory authority, or by the entity with authority to 
        regulate or set retail natural gas rates in the case of a 
        natural gas local distribution company that is not regulated by 
        a State regulatory authority.
            ``(6) Certain intracompany deliveries.--If a natural gas 
        local distribution company makes an intracompany delivery of 
        natural gas to a customer that is not a covered entity, for 
        which such company is required to hold emission allowances 
        under section 722, such customer shall, for purposes of this 
        section, be considered a retail ratepayer and a member of a 
        ratepayer class to be determined by the relevant State 
        regulatory authority, or other entity with authority to 
        regulate or set natural gas rates in the case of a company not 
        regulated by a State regulatory authority.
            ``(7) Guidelines.--As part of the regulations promulgated 
        under subsection (h), the Administrator shall, after 
        consultation with State regulatory authorities, prescribe 
        guidelines for the implementation of the requirements of this 
        subsection. Such guidelines shall include requirements to 
        ensure that industrial retail ratepayers that are not covered 
        entities (including entities that receive emission allowances 
        under part F) receive their ratable share of the value of the 
        allowances distributed to each natural gas local distribution 
        company pursuant to this section.
    ``(d) Regulatory Proceedings.--
            ``(1) Requirement.--No natural gas local distribution 
        company shall be eligible to receive emission allowances under 
        this section unless the State regulatory authority with 
        authority over the retail rates of such company, or the entity 
        with authority to regulate or set retail rates of a natural gas 
        local distribution company not regulated by a State regulatory 
        authority, has--
                    ``(A) after public notice and an opportunity for 
                comment, promulgated a regulation or completed a public 
                rate proceeding (or the equivalent, in the case of a 
                ratemaking entity other than a State regulatory 
                authority) that provides for the full implementation of 
                the requirements of subsection (c); and
                    ``(B) made available to the Administrator and the 
                public a report describing, in adequate detail, the 
                manner in which the requirements of subsection (c) will 
                be implemented.
            ``(2) Updating.--The Administrator shall require, as a 
        condition of continued receipt of emission allowances under 
        this section, that a new regulation be promulgated or rate 
        proceeding be completed, after public notice and an opportunity 
        for comment, and a new report be made available to the 
        Administrator and the public, pursuant to paragraph (1), not 
        less frequently than every 5 years.
    ``(e) Plans and Reporting.--
            ``(1) Regulations.--As part of the regulations promulgated 
        under subsection (h), the Administrator shall prescribe 
        requirements governing plans and reports to be submitted in 
        accordance with this subsection.
            ``(2) Plans.--Not later than April 30 of 2015 and every 5 
        years thereafter through 2025, each natural gas local 
        distribution company shall submit to the Administrator a plan, 
        approved by the State regulatory authority or other entity 
        charged with regulating or setting the retail rates of such 
        company, describing such company's plans for the disposition of 
        the value of emission allowances to be received pursuant to 
        this section, in accordance with the requirements of this 
        section.
            ``(3) Reports.--Not later than June 30 of 2017 and each 
        calendar year thereafter through 2031, each natural gas local 
        distribution company shall submit a report to the 
        Administrator, approved by the relevant State regulatory 
        authority or other entity charged with regulating or setting 
        the retail natural gas rates of such company, describing the 
        disposition of the value of any emission allowances received by 
        such company in the prior calendar year pursuant to this 
        section, including--
                    ``(A) a description of sales, transfer, exchange, 
                or use by the company for compliance with obligations 
                under this title, of any such emission allowances;
                    ``(B) the monetary value received by the company, 
                whether in money or in some other form, from the sale, 
                transfer, or exchange of emission allowances received 
                by the company under this section;
                    ``(C) the manner in which the company's disposition 
                of emission allowances received under this section 
                complies with the requirements of this section, 
                including each of the requirements of subsection (c);
                    ``(D) the cost-effectiveness of, and energy savings 
                achieved by, energy efficiency programs supported 
                through such emission allowances; and
                    ``(E) such other information as the Administrator 
                may require pursuant to paragraph (1).
            ``(4) Publication.--The Administrator shall make available 
        to the public all plans and reports submitted by natural gas 
        local distribution companies under this subsection, including 
        by publishing such plans and reports on the Internet.
    ``(f) Audits.--Each year, the Administrator shall audit a 
representative sample of natural gas local distribution companies to 
ensure that emission allowances distributed under this section have 
been used exclusively for the benefit of retail ratepayers and that 
such companies are complying with the requirements of this section. In 
selecting companies for audit, the Administrator shall take into 
account any credible evidence of noncompliance with such requirements. 
The Administrator shall make available to the public a report 
describing the results of each such audit, including by publishing such 
report on the Internet.
    ``(g) Enforcement.--A violation of any requirement of this section 
shall be a violation of this Act. Each emission allowance the value of 
which is used in violation of the requirements of this section shall be 
a separate violation.
    ``(h) Regulations.--Not later than January 1, 2014, the 
Administrator, in consultation with the Federal Energy Regulatory 
Commission, shall promulgate regulations to implement the requirements 
of this section.

``SEC. 785. HOME HEATING OIL, PROPANE, AND KEROSENE CONSUMERS.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Carbon content.--The term `carbon content' means the 
        amount of carbon dioxide that would be emitted as a result of 
        the combustion of a fuel.
            ``(2) Cost-effective.--The term `cost-effective' has the 
        meaning given that term in section 784(a)(1).
            ``(3) Oilheat fuel.--The term `oilheat fuel' means fuel 
        that--
                    ``(A) is--
                            ``(i) No. 1 distillate;
                            ``(ii) No. 2 dyed distillate;
                            ``(iii) a liquid blended with No. 1 
                        distillate or No. 2 dyed distillate; or
                            ``(iv) a biobased liquid; and
                    ``(B) is used as a fuel for nonindustrial 
                commercial or residential space or hot water heating.
    ``(b) Distribution Among States.--Not later than September 30 of 
each of calendar years 2011 through 2028, the Administrator shall 
distribute among the States, in accordance with this section, the 
quantity of emission allowances allocated for the following vintage 
year pursuant to section 782(c). The Administrator shall distribute 
emission allowances among the States under this section each year 
ratably based on the ratio of--
            ``(1) the carbon content of oilheat fuel, propane, and 
        kerosene sold to consumers within each State in the preceding 
        year for residential or commercial uses; to
            ``(2) the carbon content of oilheat fuel, propane, and 
        kerosene sold to consumers within the United States in the 
        preceding year for residential or commercial uses.
    ``(c) Use of Allowances.--
            ``(1) In general.--States shall use emission allowances 
        distributed under this section exclusively for the benefit of 
        consumers of oilheat fuel, propane, or kerosene for residential 
        or commercial purposes. Such proceeds shall be used exclusively 
        for--
                    ``(A) cost-effective energy efficiency programs for 
                consumers that use oilheat fuel, propane, or kerosene 
                for residential or commercial purposes; or
                    ``(B) rebates or other direct financial assistance 
                programs for consumers of oilheat fuel, propane, or 
                kerosene used for residential or commercial purposes.
            ``(2) Administration and delivery mechanisms.--In 
        administering programs supported by this section, States shall
                    ``(A) use no less than 50 percent of the value of 
                emission allowances received under this section for 
                cost-effective energy efficiency programs to reduce 
                consumers' overall fuel costs;
                    ``(B) to the extent practicable, deliver consumer 
                support under this section through existing energy 
                efficiency and consumer energy assistance programs or 
                delivery mechanisms, including, where appropriate, 
                programs or mechanisms administered by parties other 
                than the State; and
                    ``(C) seek to coordinate the administration and 
                delivery of energy efficiency and consumer energy 
                assistance programs supported under this section, with 
                one another and with existing programs for various fuel 
                types, so as to deliver comprehensive, fuel-blind, 
                coordinated programs to consumers.
    ``(d) Reporting.--Each State receiving emission allowances under 
this section shall submit to the Administrator, within 12 months of 
each receipt of such allowances, a report, in accordance with such 
requirements as the Administrator may prescribe, that--
            ``(1) describes the State's use of emission allowances 
        distributed under this section, including a description of the 
        energy efficiency and consumer assistance programs supported 
        with such allowances;
            ``(2) demonstrates the cost-effectiveness of, and the 
        energy savings and greenhouse gas emissions reductions achieved 
        by, energy efficiency programs supported under this section; 
        and
            ``(3) includes a report prepared by an independent third 
        party, in accordance with such regulations as the Administrator 
        may promulgate, evaluating the performance of the energy 
        efficiency and consumer assistance programs supported under 
        this section.
    ``(e) Enforcement.--If the Administrator determines that a State is 
not in compliance with this section, the Administrator may withhold a 
portion of the emission allowances, the quantity of which is equal to 
up to twice the quantity of the allowances that the State failed to use 
in accordance with the requirements of this section, that such State 
would otherwise be eligible to receive under this section in later 
years. Allowances withheld pursuant to this subsection shall be 
distributed among the remaining States ratably in accordance with the 
formula in subsection (b).

``SEC. 787. ALLOCATIONS TO REFINERIES.

    ``(a) Purpose.--The purpose of this section is to provide emission 
allowance rebates to petroleum refineries in the United States in a 
manner that promotes energy efficiency and a reduction in greenhouse 
gas emissions at such facilities.
    ``(b) Definitions.--In this section:
            ``(1) Emissions.--The term `emissions' includes direct 
        emissions from fuel combustion, process emissions, and indirect 
        emissions from the generation of electricity, steam, and 
        hydrogen used to produce the output of a petroleum refinery or 
        the petroleum refinery sector.
            ``(2) Petroleum refinery.--The term `petroleum refinery' 
        means a facility classified under code 324110 of the North 
        American Industrial Classification System of 2002.
            ``(3) Small business refiner.--The term `small business 
        refiner' means a refiner that meets the applicable Federal 
        refinery capacity and employee limitations criteria described 
        in section 45H(c)(1) of the Internal Revenue Code of 1986 (as 
        in effect on the date of enactment of this section and without 
        regard to section 45H(d)). Eligibility of a small business 
        refiner under this paragraph shall not be recalculated or 
        disallowed on account of (i) its merger with another small 
        business refiner or refiners after December 31, 2002 or (ii) 
        its acquisition of another small business refiner (or refinery 
        of such refiner) after December 31, 2002.
    ``(c) In General.--For each vintage year between 2014 and 2026, the 
Administrator shall distribute allowances pursuant to this section to 
owners and operators of petroleum refineries, including small business 
refiners, in the United States.
    ``(d) Distribution Schedule.--The Administrator shall distribute 
emission allowances pursuant to the regulations issued under subsection 
(e) for each vintage year no later than October 31 of the preceding 
calendar year.
    ``(e) Regulations.--Not later than 3 years after the date of 
enactment of this title, the Administrator, in consultation with the 
Administrator of the Energy Information Administration, shall 
promulgate regulations that establish a formula for distributing 
emission allowances consistent with the purpose of this section. In 
establishing such formula, the Administrator shall consider the 
relative complexity of refinery processes and appropriate mechanisms to 
take energy efficiency and greenhouse gas reductions into account. If a 
petroleum refinery's electricity provider received a free allocation of 
emission allowances pursuant to section 782(a), the Administrator shall 
take this free allocation into account when establishing such formula 
to avoid rebates to a petroleum refinery for costs that the 
Administrator determines were not incurred by the petroleum refinery 
because the allowances were freely allocated to the petroleum 
refinery's electricity provider and used for the benefit of the 
petroleum refinery. This formula shall apply separately to the 
distribution of allowances allocated pursuant to section 782(j)(1) and 
to those allocated under section 782(j)(2).

``SEC. 788. [SECTION RESERVED].

``SEC. 789. CLIMATE CHANGE CONSUMER REFUNDS.

    ``(a) Refund.--In each year after deposits are made to the Climate 
Change Consumer Refund Account, the Secretary of the Treasury shall 
provide tax refunds on a per capita basis to each household in the 
United States that shall collectively equal the amount deposited into 
the Climate Change Consumer Refund Account.
    ``(b) Limitations.--The Secretary of the Treasury shall establish 
procedures to ensure that individuals who are not--
            ``(1) citizens or nationals of the United States; or
            ``(2) immigrants lawfully residing in the United States,
are excluded for the purpose of calculating and distributing refunds 
under this section.

``SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES.

    ``(a) In General.--Not later than one year after the date of 
enactment of this title, the Administrator shall issue regulations 
allowing any person in the United States to exchange greenhouse gas 
emission allowances issued before December 31, 2011, by the State of 
California or for the Regional Greenhouse Gas Initiative, or the 
Western Climate Initiative (in this section referred to as `State 
allowances') for emission allowances established by the Administrator 
under section 721(a).
    ``(b) Regulations.--Regulations issued under subsection (a) shall--
            ``(1) provide that a person exchanging State allowances 
        under this section receive emission allowances established 
        under section 721(a) in the amount that is sufficient to 
        compensate for the cost of obtaining and holding such State 
        allowances;
            ``(2) establish a deadline by which persons must exchange 
        the State allowances; and
            ``(3) provide that the Federal emission allowances 
        disbursed pursuant to this section shall be deducted from the 
        allowances to be auctioned pursuant to section 782(d).
    ``(c) Cost of Obtaining State Allowance.--For purposes of this 
section, the cost of obtaining a State allowance shall be the average 
auction price, for emission allowances issued in the year in which the 
State allowance was issued, under the program under which the State 
allowance was issued.

``SEC. 791. AUCTION PROCEDURES.

    ``(a) In General.--To the extent that auctions of emission 
allowances by the Administrator are authorized by this part, such 
auctions shall be carried out pursuant to this section and the 
regulations established hereunder.
    ``(b) Initial Regulations.--Not later than 12 months after the date 
of enactment of this title, the Administrator, in consultation with 
other agencies, as appropriate, shall promulgate regulations governing 
the auction of allowances under this section. Such regulations shall 
include the following requirements:
            ``(1) Frequency; first auction.--Auctions shall be held 
        four times per year at regular intervals, with the first 
        auction to be held no later than March 31, 2011.
            ``(2) Auction schedule; current and future vintages.--The 
        Administrator shall, at each quarterly auction under this 
        section, offer for sale both a portion of the allowances with 
        the same vintage year as the year in which the auction is being 
        conducted and a portion of the allowances with vintage years 
        from future years. The preceding sentence shall not apply to 
        auctions held before 2012, during which period, by necessity, 
        the Administrator shall auction only allowances with a vintage 
        year that is later than the year in which the auction is held. 
        Beginning with the first auction and at each quarterly auction 
        held thereafter, the Administrator may offer for sale 
        allowances with vintage years of up to four years after the 
        year in which the auction is being conducted, except as 
        provided in section 782(p).
            ``(3) Auction format.--Auctions shall follow a single-
        round, sealed-bid, uniform price format.
            ``(4) Participation; financial assurance.--Auctions shall 
        be open to any person, except that the Administrator may 
        establish financial assurance requirements to ensure that 
        auction participants can and will perform on their bids.
            ``(5) Disclosure of beneficial ownership.--Each bidder in 
        the auction shall be required to disclose the person or entity 
        sponsoring or benefitting from the bidder's participation in 
        the auction if such person or entity is, in whole or in part, 
        other than the bidder.
            ``(6) Purchase limits.--No person may, directly or in 
        concert with another participant, purchase more than 5 percent 
        of the allowances offered for sale at any quarterly auction.
            ``(7) Publication of information.--After the auction, the 
        Administrator shall, in a timely fashion, publish the 
        identities of winning bidders, the quantity of allowances 
        obtained by each winning bidder, and the auction clearing 
        price.
            ``(8) Other requirements.--The Administrator may include in 
        the regulations such other requirements or provisions as the 
        Administrator, in consultation with other agencies, as 
        appropriate, considers appropriate to promote effective, 
        efficient, transparent, and fair administration of auctions 
        under this section.
    ``(c) Revision of Regulations.--The Administrator may, in 
consultation with other agencies, as appropriate, at any time, revise 
the initial regulations promulgated under subsection (b) by 
promulgating new regulations. Such revised regulations need not meet 
the requirements identified in subsection (b) if the Administrator 
determines that an alternative auction design would be more effective, 
taking into account factors including costs of administration, 
transparency, fairness, and risks of collusion or manipulation. In 
determining whether and how to revise the initial regulations under 
this subsection, the Administrator shall not consider maximization of 
revenues to the Federal Government.
    ``(d) Reserve Auction Price.--The minimum reserve auction price 
shall be $10 (in constant 2009 dollars) for auctions occurring in 2012. 
The minimum reserve price for auctions occurring in years after 2012 
shall be the minimum reserve auction price for the previous year 
increased by 5 percent plus the rate of inflation (as measured by the 
Consumer Price Index for all urban consumers).
    ``(e) Delegation or Contract.--Pursuant to regulations under this 
section, the Administrator may by delegation or contract provide for 
the conduct of auctions under the Administrator's supervision by other 
departments or agencies of the Federal Government or by nongovernmental 
agencies, groups, or organizations.
    ``(f) Small Business Refiner Reserve.--The Administrator shall, in 
accordance with this subsection, issue regulations setting aside a 
specified number of allowances that small business refiners may 
purchase at the average auction price and may use to demonstrate 
compliance pursuant to section 722. These regulations shall provide the 
following:
            ``(1) Amount.--The Administrator shall place in the small 
        business refiner reserve account allowances that are to be sold 
        at auction pursuant to the allocations in section 782 in an 
        amount equal to--
                    ``(A) 6.2 percent of the emission allowances 
                established under section 721(a) for each vintage year 
                from 2012 through 2013;
                    ``(B) 5.4 percent of the emission allowances 
                established under section 721(a) for each vintage year 
                from 2014 through 2015; and
                    ``(C) 4.9 percent of the emission allowances 
                established under section 721(a) for each vintage year 
                from 2016 through 2024.
            ``(2) Allowed purchases.--From January 1 of the calendar 
        year that matches the vintage year for which allowances have 
        been placed in the reserve, through January 14 of the following 
        year, small business refiners (as defined in section 787(b)) 
        may purchase allowances from this reserve at the price 
        determined pursuant to paragraph (3).
            ``(3) Price.--The price for allowances purchased from this 
        reserve shall be the average auction price for allowances of 
        the same vintage year purchased at auctions conducted pursuant 
        to this section during the 12 months preceding the purchase of 
        the allowances.
            ``(4) Use of allowances.--Allowances purchased from this 
        reserve shall only be used by the purchaser to demonstrate 
        compliance pursuant to section 722 for attributable greenhouse 
        gas emissions in the calendar year that matches the vintage 
        year of the purchased allowance. Allowances purchased from this 
        reserve may not be banked, traded or borrowed.
            ``(5) Limitations on purchase amount.--The Administrator, 
        by regulation adopted after public notice and an opportunity 
        for comment, shall establish procedures to distribute the 
        ability to purchase allowances from the reserve fairly among 
        all small business refiners interested in purchasing allowances 
        from this reserve so as to address the potential that requests 
        to purchase allowances exceed the number of allowances 
        available in the reserve. This regulation may place limits on 
        the number of allowances a small business refiner may purchase 
        from the reserve.
            ``(6) Unsold allowances.--Vintage year allowances not sold 
        from the reserve on or before January 15 of the calendar year 
        following the vintage year shall be sold at an auction 
        conducted pursuant to this section no later than March 31 of 
        the calendar year following the vintage year. If significantly 
        more allowances are being placed in the reserve than are being 
        purchased from the reserve several years in a row, the 
        Administrator may adjust either the percent of allowances 
        placed in the reserve or the date by which allowances may be 
        purchased from the reserve.

``SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTITIES.

    ``(a) Consignment.--Any entity holding emission allowances or 
compensatory allowances may request that the Administrator auction, 
pursuant to section 791, the allowances on consignment.
    ``(b) Pricing.--When the Administrator acts under this section as 
the agent of an entity in possession of emission allowances or 
compensatory allowances, the Administrator is not obligated to obtain 
the highest price possible for the allowances, and instead shall 
auction consignment allowances in the same manner and pursuant to the 
same rules as auctions of other allowances under section 791. The 
Administrator may permit the entity offering the allowance for sale to 
condition the sale of its allowances pursuant to this section on a 
minimum reserve price that is different than the reserve auction price 
set pursuant to section 791(d).
    ``(c) Proceeds.--For emission allowances and compensatory 
allowances auctioned pursuant to this section, notwithstanding section 
3302 of title 31, United States Code, or any other provision of law, 
within 90 days of receipt, the United States shall transfer the 
proceeds from the auction to the entity which held the allowances 
auctioned. No funds transferred from a purchaser to a seller of 
emission allowances or compensatory allowances under this subsection 
shall be held by any officer or employee of the United States or 
treated for any purpose as public monies.
    ``(d) Unsold Allowances.--Allowances offered for sale under this 
section that are not sold shall be returned to the entity in possession 
of the allowance, notwithstanding section 726(b)(2)(A).
    ``(e) Regulations.--The Administrator shall issue regulations 
within 24 months after the date of enactment of this title to implement 
this section.

``SEC. 793. ESTABLISHMENT OF FUNDS.

    ``There is hereby established in the Treasury of the United States 
the following separate accounts:
            ``(1) The Strategic Reserve Fund.
            ``(2) The Climate Change Consumer Refund Account.
            ``(3) The Climate Change Worker Adjustment Assistance Fund.

``SEC. 794. OVERSIGHT OF ALLOCATIONS.

    ``(a) In General.--Not later than January 1, 2014, and every 2 
years thereafter, the Comptroller General of the United States shall 
carry out and report to Congress on the results of a review of programs 
administered by the Federal Government that distribute emission 
allowances or funds from any Federal auction of allowances.
    ``(b) Contents.--Each such report shall include a comprehensive 
evaluation of the administration and effectiveness of each program, 
including--
            ``(1) the efficiency, transparency, and soundness of the 
        administration of each program;
            ``(2) the performance of activities receiving assistance 
        under each program;
            ``(3) the cost-effectiveness of each program in achieving 
        the stated purposes of the program; and
            ``(4) recommendations, if any, for legislative, regulatory, 
        or administrative changes to each program to improve its 
        effectiveness.
    ``(c) Focus.--In evaluating program performance, each review under 
this section review shall address the effectiveness of such programs 
in--
            ``(1) creating and preserving jobs;
            ``(2) ensuring a manageable transition for working families 
        and workers;
            ``(3) reducing the emissions, or enhancing sequestration, 
        of greenhouse gases;
            ``(4) developing clean technologies; and
            ``(5) building resilience to the impacts of climate 
        change.''.

            Subtitle C--Additional Greenhouse Gas Standards

SEC. 331. GREENHOUSE GAS STANDARDS.

    The Clean Air Act (42 U.S.C. 7401 and following), as amended by 
subtitles A and B of this title, is further amended by adding the 
following new title after title VII:

           ``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

``SEC. 801. DEFINITIONS.

    ``For purposes of this title, terms that are defined in title VII, 
except for the term `stationary source', shall have the meaning given 
those terms in title VII.

                 ``PART A--STATIONARY SOURCE STANDARDS

``SEC. 811. STANDARDS OF PERFORMANCE.

    ``(a) Uncapped Stationary Sources.--
            ``(1) Inventory of source categories.--(A) Within 12 months 
        after the date of enactment of this title, the Administrator 
        shall publish under section 111(b)(1)(A) an inventory of 
        categories of stationary sources that consist of those 
        categories that contain sources that individually had uncapped 
        greenhouse gas emissions greater than 10,000 tons of carbon 
        dioxide equivalent and that, in the aggregate, were responsible 
        for emitting at least 20 percent annually of the uncapped 
        greenhouse gas emissions.
            ``(B) The Administrator shall include in the inventory 
        under this paragraph each source category that is responsible 
        for at least 10 percent of the uncapped methane emissions in 
        2005. Notwithstanding any other provision, the inventory 
        required by this section shall not include sources of enteric 
        fermentation. The list under this paragraph shall include 
        industrial sources, the emissions from which, when added to the 
        capped emissions from industrial sources, constitute at least 
        95 percent of the greenhouse gas emissions of the industrial 
        sector.
            ``(C) For purposes of this subsection, emissions shall be 
        calculated using tons of carbon dioxide equivalents. In 
        promulgating the inventory required by this paragraph and the 
        schedule required under by paragraph (2)(C), the Administrator 
        shall use the most current emissions data available at the time 
        of promulgation, except as provided in subparagraph (B).
            ``(D) Notwithstanding any other provisions, the 
        Administrator may list under 111(b) any source category 
        identified in the inventory required by this subsection without 
        making a finding that the source category causes or contributes 
        significantly to, air pollution with may be reasonably 
        anticipated to endanger public health or welfare.
            ``(2) Standards and schedule.--(A) For each category 
        identified as provided in paragraph (1), the Administrator 
        shall promulgate standards of performance under section 111 for 
        the uncapped emissions of greenhouse gases from stationary 
        sources in that category and shall promulgate corresponding 
        regulations under section 111(d).
            ``(B) The Administrator shall promulgate standards as 
        required by this subsection for stationary sources in 
        categories identified as provided in paragraph (1) as 
        expeditiously as practicable, assuring that--
                    ``(i) standards for identified source categories 
                that, combined, emitted 80 percent or more of the 
                greenhouse gas emissions of the identified source 
                categories shall be promulgated not later than 3 years 
                after the date of enactment of this title and shall 
                include standards for natural gas extraction; and
                    ``(ii) for all other identified source categories--
                            ``(I) standards for not less than an 
                        additional 25 percent of the identified 
                        categories shall be promulgated not later than 
                        5 years after the date of enactment of this 
                        title;
                            ``(II) standards for not less than an 
                        additional 25 percent of the identified 
                        categories shall be promulgated not later than 
                        7 years after the date of enactment of this 
                        title; and
                            ``(III) standards for all the identified 
                        categories shall be promulgated not later than 
                        10 years after the date of enactment of this 
                        title.
            ``(C) Not later than 24 months after the date of enactment 
        of this title and after notice and opportunity for comment, the 
        Administrator shall publish a schedule establishing a date for 
        the promulgation of standards for each category of sources 
        identified pursuant to paragraph (1). The date for each 
        category shall be consistent with the requirements of 
        subparagraph (B). The determination of priorities for the 
        promulgation of standards pursuant to this paragraph is not a 
        rulemaking and shall not be subject to judicial review, except 
        that failure to promulgate any standard pursuant to the 
        schedule established by this paragraph shall be subject to 
        review under section 304(a)(2).
            ``(D) Notwithstanding section 307, no action of the 
        Administrator listing a source category under paragraph (1) 
        shall be a final agency action subject to judicial review, 
        except that any such action may be reviewed under section 307 
        when the Administrator issues performance standards for such 
        category.
    ``(b) Capped Sources.--No standard of performance shall be 
established under section 111 for capped greenhouse gas emissions from 
a capped source unless the Administrator determines that such standards 
are appropriate because of effects that do not include climate change 
effects. In promulgating a standard of performance under section 111 
for the emission from capped sources of any air pollutant that is not a 
greenhouse gas, the Administrator shall treat the emission of any 
greenhouse gas by those entities as a nonair quality public health and 
environmental impact within the meaning of section 111(a)(1).
    ``(c) Performance Standards.--For purposes of setting a performance 
standard for source categories identified pursuant to subsection (a)--
            ``(1) The Administrator shall take into account the goal of 
        reducing total United States greenhouse gas emissions as set 
        forth in section 702.
            ``(2) The Administrator may promulgate a design, equipment, 
        work practice, or operational standard, or any combination 
        thereof, under section 111 in lieu of a standard of performance 
        under that section without regard to any determination of 
        feasibility that would otherwise be required under section 
        111(h).
            ``(3) Notwithstanding any other provision, in setting the 
        level of each standard required by this section, the 
        Administrator shall take into account projections of allowance 
        prices, such that the marginal cost of compliance (expressed as 
        dollars per ton of carbon dioxide equivalent reduced) imposed 
        by the standard would not, in the judgement of the 
        Administrator, be expected to exceed the Administrator's 
        projected allowance prices over the time period spanning from 
        the date of initial compliance to the date that the next 
        revisions of the standard would come into effect pursuant to 
        the schedule under section 111(b)(1)(B).
    ``(d) Definitions.--In this section, the terms `uncapped greenhouse 
gas emissions' and `uncapped methane emissions' mean those greenhouse 
gas or methane emissions, respectively, to which section 722 would not 
have applied if the requirements of this title had been in effect for 
the same year as the emissions data upon which the list is based.
    ``(e) Study of the Effects of Performance Standards.--
            ``(1) Study.--The Administrator shall conduct a study of 
        the impacts of performance standards required under this 
        section, which shall evaluate the effect of such standards on 
        the--
                    ``(A) costs of achieving compliance with the 
                economy-wide reduction goals specified in section 702 
                and the reduction targets specified in section 703;
                    ``(B) available supply of offset credits; and
                    ``(C) ability to achieve the economy-wide reduction 
                goals specified in section 702 and any other benefits 
                of such standards.
            ``(2) Report.--The Administrator shall submit to the House 
        Energy and Commerce Committee a report that describes the 
        results of the study not later than 18 months after the 
        publication of the standards required under subsection 
        (a)(2)(B)(i).

                ``PART C--EXEMPTIONS FROM OTHER PROGRAMS

``SEC. 831. CRITERIA POLLUTANTS.

    ``As of the date of the enactment of the Safe Climate Act, no 
greenhouse gas may be added to the list under section 108(a) on the 
basis of its effect on global climate change.

``SEC. 832. INTERNATIONAL AIR POLLUTION.

    ``Section 115 shall not apply to an air pollutant with respect to 
that pollutant's contribution to global warming.

``SEC. 833. HAZARDOUS AIR POLLUTANTS.

    ``No greenhouse gas may be added to the list of hazardous air 
pollutants under section 112 unless such greenhouse gas meets the 
listing criteria of section 112(b) independent of its effects on global 
climate change.

``SEC. 834. NEW SOURCE REVIEW.

    ``The provisions of part C of title I shall not apply to a major 
emitting facility that is initially permitted or modified after January 
1, 2009, on the basis of its emissions of any greenhouse gas.

``SEC. 835. TITLE V PERMITS.

    ``Notwithstanding any provision of title III or V, no stationary 
source shall be required to apply for, or operate pursuant to, a permit 
under title V, solely because the source emits any greenhouse gases 
that are regulated solely because of their effect on global climate 
change.''.

SEC. 332. HFC REGULATION.

    (a) In General.--Title VI of the Clean Air Act (42 U.S.C. 7671 et 
seq.) (relating to stratospheric ozone protection) is amended by adding 
at the end the following:

``SEC. 619. HYDROFLUOROCARBONS (HFCS).

    ``(a) Treatment as Class II, Group II Substances.--Except as 
otherwise provided in this section, hydrofluorocarbons shall be treated 
as class II substances for purposes of applying the provisions of this 
title. The Administrator shall establish two groups of class II 
substances. Class II, group I substances shall include all 
hydrochlorofluorocarbons (HCFCs) listed pursuant to section 602(b). 
Class II, group II substances shall include each of the following:
            ``(1) Hydrofluorocarbon-23 (HFC-23).
            ``(2) Hydrofluorocarbon-32 (HFC-32).
            ``(3) Hydrofluorocarbon-41 (HFC-41).
            ``(4) Hydrofluorocarbon-125 (HFC-125).
            ``(5) Hydrofluorocarbon-134 (HFC-134).
            ``(6) Hydrofluorocarbon-134a (HFC-134a).
            ``(7) Hydrofluorocarbon-143 (HFC-143).
            ``(8) Hydrofluorocarbon-143a (HFC-143a).
            ``(9) Hydrofluorocarbon-152 (HFC-152).
            ``(10) Hydrofluorocarbon-152a (HFC-152a).
            ``(11) Hydrofluorocarbon-227ea (HFC-227ea).
            ``(12) Hydrofluorocarbon-236cb (HFC-236cb).
            ``(13) Hydrofluorocarbon-236ea (HFC-236ea).
            ``(14) Hydrofluorocarbon-236fa (HFC-236fa).
            ``(15) Hydrofluorocarbon-245ca (HFC-245ca).
            ``(16) Hydrofluorocarbon-245fa (HFC-245fa).
            ``(17) Hydrofluorocarbon-365mfc (HFC-365mfc).
            ``(18) Hydrofluorocarbon-43-10mee (HFC-43-10mee).
            ``(19) Hydrofluoroolefin-1234yf (HFO-1234yf).
            ``(20) Hydrofluoroolefin-1234ze (HFO-1234ze).
Not later than 6 months after the date of enactment of this title, the 
Administrator shall publish an initial list of class II, group II 
substances, which shall include the substances listed in this 
subsection. The Administrator may add to the list of class II, group II 
substances any other substance used as a substitute for a class I or II 
substance if the Administrator determines that 1 metric ton of the 
substance makes the same or greater contribution to global warming over 
100 years as 1 metric ton of carbon dioxide. Within 24 months after the 
date of enactment of this section, the Administrator shall amend the 
regulations under this title (including the regulations referred to in 
sections 603, 608, 609, 610, 611, 612, and 613) to apply to class II, 
group II substances.
    ``(b) Consumption and Production of Class II, Group II 
Substances.--
            ``(1) In general.--
                    ``(A) Consumption phase down.--In the case of class 
                II, group II substances, in lieu of applying section 
                605 and the regulations thereunder, the Administrator 
                shall promulgate regulations phasing down the 
                consumption of class II, group II substances in the 
                United States, and the importation of products 
                containing any class II, group II substance, in 
                accordance with this subsection within 18 months after 
                the date of enactment of this section. Effective 
                January 1, 2012, it shall be unlawful for any person to 
                produce any class II, group II substance, import any 
                class II, group II substance, or import any product 
                containing any class II, group II substance without 
                holding one consumption allowance or one destruction 
                offset credit for each carbon dioxide equivalent ton of 
                the class II, group II substance. Any person who 
                exports a class II, group II substance for which a 
                consumption allowance was retired may receive a refund 
                of that allowance from the Administrator following the 
                export.
                    ``(B) Production.--If the United States becomes a 
                party or otherwise adheres to a multilateral agreement, 
                including any amendment to the Montreal Protocol on 
                Substances That Deplete the Ozone Layer, that restricts 
                the production of class II, group II substances, the 
                Administrator shall promulgate regulations establishing 
                a baseline for the production of class II, group II 
                substances in the United States and phasing down the 
                production of class II, group II substances in the 
                United States, in accordance with such multilateral 
                agreement and subject to the same exceptions and other 
                provisions as are applicable to the phase down of 
                consumption of class II, group II substances under this 
                section (except that the Administrator shall not 
                require a person who obtains production allowances from 
                the Administrator to make payment for such allowances 
                if the person is making payment for a corresponding 
                quantity of consumption allowances of the same vintage 
                year). Upon the effective date of such regulations, it 
                shall be unlawful for any person to produce any class 
                II, group II substance without holding one consumption 
                allowance and one production allowance, or one 
                destruction offset credit, for each carbon dioxide 
                equivalent ton of the class II, group II substance.
                    ``(C) Integrity of cap.--To maintain the integrity 
                of the class II, group II cap, the Administrator may, 
                through rulemaking, limit the percentage of each 
                person's compliance obligation that may be met through 
                the use of destruction offset credits or banked 
                allowances.
                    ``(D) Counting of violations.--Each consumption 
                allowance, production allowance, or destruction offset 
                credit not held as required by this section shall be a 
                separate violation of this section.
            ``(2) Schedule.--Pursuant to the regulations promulgated 
        pursuant to paragraph (1)(A), the number of class II, group II 
        consumption allowances established by the Administrator for 
        each calendar year beginning in 2012 shall be the following 
        percentage of the baseline, as established by the Administrator 
        pursuant to paragraph (3):

----------------------------------------------------------------------------------------------------------------
                    ``Calendar Year                                        Percent of Baseline
----------------------------------------------------------------------------------------------------------------
2012                                                     90
----------------------------------------------------------------------------------------------------------------
2013                                                     87.5
----------------------------------------------------------------------------------------------------------------
2014                                                     85
----------------------------------------------------------------------------------------------------------------
2015                                                     82.5
----------------------------------------------------------------------------------------------------------------
2016                                                     80
----------------------------------------------------------------------------------------------------------------
2017                                                     77.5
----------------------------------------------------------------------------------------------------------------
2018                                                     75
----------------------------------------------------------------------------------------------------------------
2019                                                     71
----------------------------------------------------------------------------------------------------------------
2020                                                     67
----------------------------------------------------------------------------------------------------------------
2021                                                     63
----------------------------------------------------------------------------------------------------------------
2022                                                     59
----------------------------------------------------------------------------------------------------------------
2023                                                     54
----------------------------------------------------------------------------------------------------------------
2024                                                     50
----------------------------------------------------------------------------------------------------------------
2025                                                     46
----------------------------------------------------------------------------------------------------------------
2026                                                     42
----------------------------------------------------------------------------------------------------------------
2027                                                     38
----------------------------------------------------------------------------------------------------------------
2028                                                     34
----------------------------------------------------------------------------------------------------------------
2029                                                     30
----------------------------------------------------------------------------------------------------------------
2030                                                     25
----------------------------------------------------------------------------------------------------------------
2031                                                     21
----------------------------------------------------------------------------------------------------------------
2032                                                     17
----------------------------------------------------------------------------------------------------------------
after 2032                                               15
----------------------------------------------------------------------------------------------------------------

            ``(3) Baseline.--(A) Within 12 months after the date of 
        enactment of this section, the Administrator shall promulgate 
        regulations to establish the baseline for purposes of paragraph 
        (2). The baseline shall be the sum, expressed in metric tons of 
        carbon dioxide equivalents, of--
                    ``(i) the annual average consumption of all class 
                II substances in calendar years 2004, 2005, and 2006; 
                plus
                    ``(ii) the annual average quantity of all class II 
                substances contained in imported products in calendar 
                years 2004, 2005, and 2006.
            ``(B) Notwithstanding subparagraph (A), if the 
        Administrator determines that the baseline is higher than 370 
        million metric tons of carbon dioxide equivalents, then the 
        Administrator shall establish the baseline at 370 million 
        metric tons of carbon dioxide equivalents.
            ``(C) Notwithstanding subparagraph (A), if the 
        Administrator determines that the baseline is lower than 280 
        million metric tons of carbon dioxide equivalents, then the 
        Administrator shall establish the baseline at 280 million 
        metric tons of carbon dioxide equivalents.
            ``(4) Distribution of allowances.--
                    ``(A) In general.--Pursuant to the regulations 
                promulgated under paragraph (1)(A), for each calendar 
                year beginning in 2012, the Administrator shall sell 
                consumption allowances in accordance with this 
                paragraph.
                    ``(B) Establishment of pools.--The Administrator 
                shall establish two allowance pools. Eighty percent of 
                the consumption allowances available for a calendar 
                year shall be placed in the producer-importer pool, and 
                20 percent of the consumption allowances available for 
                a calendar year shall be placed in the secondary pool.
                    ``(C) Producer-importer pool.--
                            ``(i) Auction.--(I) For each calendar year, 
                        the Administrator shall offer for sale at 
                        auction the following percentage of the 
                        consumption allowances in the producer-importer 
                        pool:

----------------------------------------------------------------------------------------------------------------
                    ``Calendar Year                                   Percent Available for Auction
----------------------------------------------------------------------------------------------------------------
2012                                                     10
----------------------------------------------------------------------------------------------------------------
2013                                                     20
----------------------------------------------------------------------------------------------------------------
2014                                                     30
----------------------------------------------------------------------------------------------------------------
2015                                                     40
----------------------------------------------------------------------------------------------------------------
2016                                                     50
----------------------------------------------------------------------------------------------------------------
2017                                                     60
----------------------------------------------------------------------------------------------------------------
2018                                                     70
----------------------------------------------------------------------------------------------------------------
2019                                                     80
----------------------------------------------------------------------------------------------------------------
2020 and thereafter                                      90
----------------------------------------------------------------------------------------------------------------

                            ``(II) Any person who produced or imported 
                        any class II substance during calendar year 
                        2004, 2005, or 2006 may participate in the 
                        auction. No other persons may participate in 
                        the auction unless permitted to do so pursuant 
                        to subclause (III).
                            ``(III) Not later than three years after 
                        the date of the initial auction and from time 
                        to time thereafter, the Administrator shall 
                        determine through rulemaking whether any 
                        persons who did not produce or import a class 
                        II substance during calendar year 2004, 2005, 
                        or 2006 will be permitted to participate in 
                        future auctions. The Administrator shall base 
                        this determination on the duration, 
                        consistency, and scale of such person's 
                        purchases of consumption allowances in the 
                        secondary pool under subparagraph (D)(ii)(III), 
                        as well as economic or technical hardship and 
                        other factors deemed relevant by the 
                        Administrator.
                            ``(IV) The Administrator shall set a 
                        minimum bid per consumption allowance of the 
                        following:
                                    ``(aa) For vintage year 2012, 
                                $1.00.
                                    ``(bb) For vintage year 2013, 
                                $1.20.
                                    ``(cc) For vintage year 2014, 
                                $1.40.
                                    ``(dd) For vintage year 2015, 
                                $1.60.
                                    ``(ee) For vintage year 2016, 
                                $1.80.
                                    ``(ff) For vintage year 2017, 
                                $2.00.
                                    ``(gg) For vintage year 2018 and 
                                thereafter, $2.00 adjusted for 
                                inflation after vintage year 2017 based 
                                upon the producer price index as 
                                published by the Department of 
                                Commerce.
                            ``(ii) Non-auction sale.--(I) For each 
                        calendar year, as soon as practicable after 
                        auction, the Administrator shall offer for sale 
                        the remaining consumption allowances in the 
                        producer-importer pool at the following prices:
                                    ``(aa) A fee of $1.00 per vintage 
                                year 2012 allowance.
                                    ``(bb) A fee of $1.20 per vintage 
                                year 2013 allowance.
                                    ``(cc) A fee of $1.40 per vintage 
                                year 2014 allowance.
                                    ``(dd) For each vintage year 2015 
                                allowance, a fee equal to the average 
                                of $1.10 and the auction clearing price 
                                for vintage year 2014 allowances.
                                    ``(ee) For each vintage year 2016 
                                allowance, a fee equal to the average 
                                of $1.30 and the auction clearing price 
                                for vintage year 2015 allowances.
                                    ``(ff) For each vintage year 2017 
                                allowance, a fee equal to the average 
                                of $1.40 and the auction clearing price 
                                for vintage year 2016 allowances.
                                    ``(gg) For each allowance of 
                                vintage year 2018 and subsequent 
                                vintage years, a fee equal to the 
                                auction clearing price for that vintage 
                                year.
                            ``(II) The Administrator shall offer to 
                        sell the remaining consumption allowances in 
                        the producer-importer pool to producers of 
                        class II, group II substances and importers of 
                        class II, group II substances in proportion to 
                        their relative allocation share.
                            ``(III) Such allocation share for such sale 
                        shall be determined by the Administrator using 
                        such producer's or importer's annual average 
                        data on class II substances from calendar years 
                        2004, 2005, and 2006, on a carbon dioxide 
                        equivalent basis, and--
                                    ``(aa) shall be based on a 
                                producer's production, plus 
                                importation, plus acquisitions and 
                                purchases from persons who produced 
                                class II substances in the United 
                                States during calendar years 2004, 
                                2005, or 2006, less exportation, less 
                                transfers and sales to persons who 
                                produced class II substances in the 
                                United States during calendar years 
                                2004, 2005, or 2006; and
                                    ``(bb) for an importer of class II 
                                substances that did not produce in the 
                                United States any class II substance 
                                during calendar years 2004, 2005, and 
                                2006, shall be based on the importer's 
                                importation less exportation.
                        For purposes of item (aa), the Administrator 
                        shall account for 100 percent of class II, 
                        group II substances and 60 percent of class II, 
                        group I substances. For purposes of item (bb), 
                        the Administrator shall account for 100 percent 
                        of class II, group II substances and 100 
                        percent of class II, group I substances.
                            ``(IV) Any consumption allowances made 
                        available for nonauction sale to a specific 
                        producer or importer of class II, group II 
                        substances but not purchased by the specific 
                        producer or importer shall be made available 
                        for sale to any producer or importer of class 
                        II substances during calendar years 2004, 2005, 
                        or 2006. If demand for such consumption 
                        allowances exceeds supply of such consumption 
                        allowances, the Administrator shall develop and 
                        utilize criteria for the sale of such 
                        consumption allowances that may include pro 
                        rata shares, historic production and 
                        importation, economic or technical hardship, or 
                        other factors deemed relevant by the 
                        Administrator. If the supply of such 
                        consumption allowances exceeds demand, the 
                        Administrator may offer such consumption 
                        allowances for sale in the secondary pool as 
                        set forth in subparagraph (D).
                    ``(D) Secondary pool.--(i) For each calendar year, 
                as soon as practicable after the auction required in 
                subparagraph (C), the Administrator shall offer for 
                sale the consumption allowances in the secondary pool 
                at the prices listed in subparagraph (C)(ii).
                    ``(ii) The Administrator shall accept applications 
                for purchase of secondary pool consumption allowances 
                from--
                            ``(I) importers of products containing 
                        class II, group II substances;
                            ``(II) persons who purchased any class II, 
                        group II substance directly from a producer or 
                        importer of class II, group II substances for 
                        use in a product containing a class II, group 
                        II substance, a manufacturing process, or a 
                        reclamation process;
                            ``(III) persons who did not produce or 
                        import a class II substance during calendar 
                        year 2004, 2005, or 2006, but who the 
                        Administrator determines have subsequently 
                        taken significant steps to produce or import a 
                        substantial quantity of any class II, group II 
                        substance; and
                            ``(IV) persons who produced or imported any 
                        class II substance during calendar year 2004, 
                        2005, or 2006.
                    ``(iii) If the supply of consumption allowances in 
                the secondary pool equals or exceeds the demand for 
                consumption allowances in the secondary pool as 
                presented in the applications for purchase, the 
                Administrator shall sell the consumption allowances in 
                the secondary pool to the applicants in the amounts 
                requested in the applications for purchase. Any 
                consumption allowances in the secondary pool not 
                purchased in a calendar year may be rolled over and 
                added to the quantity available in the secondary pool 
                in the following year.
                    ``(iv) If the demand for consumption allowances in 
                the secondary pool as presented in the applications for 
                purchase exceeds the supply of consumption allowances 
                in the secondary pool, the Administrator shall sell the 
                consumption allowances as follows:
                            ``(I) The Administrator shall first sell 
                        the consumption allowances in the secondary 
                        pool to any importers of products containing 
                        class II, group II substances in the amounts 
                        requested in their applications for purchase. 
                        If the demand for such consumption allowances 
                        exceeds supply of such consumption allowances, 
                        the Administrator shall develop and utilize 
                        criteria for the sale of such consumption 
                        allowances among importers of products 
                        containing class II, group II substances that 
                        may include pro rata shares, historic 
                        importation, economic or technical hardship, or 
                        other factors deemed relevant by the 
                        Administrator.
                            ``(II) The Administrator shall next sell 
                        any remaining consumption allowances to persons 
                        identified in subclauses (II) and (III) of 
                        clause (ii) in the amounts requested in their 
                        applications for purchase. If the demand for 
                        such consumption allowances exceeds remaining 
                        supply of such consumption allowances, the 
                        Administrator shall develop and utilize 
                        criteria for the sale of such consumption 
                        allowances among subclauses (II) and (III) 
                        applicants that may include pro rata shares, 
                        historic use, economic or technical hardship, 
                        or other factors deemed relevant by the 
                        Administrator.
                            ``(III) The Administrator shall then sell 
                        any remaining consumption allowances to persons 
                        who produced or imported any class II substance 
                        during calendar year 2004, 2005, or 2006 in the 
                        amounts requested in their applications for 
                        purchase. If demand for such consumption 
                        allowances exceeds remaining supply of such 
                        consumption allowances, the Administrator shall 
                        develop and utilize criteria for the sale of 
                        such consumption allowances that may include 
                        pro rata shares, historic production and 
                        importation, economic or technical hardship, or 
                        other factors deemed relevant by the 
                        Administrator.
                            ``(IV) Each person who purchases 
                        consumption allowances in a non-auction sale 
                        under this subparagraph shall be required to 
                        disclose the person or entity sponsoring or 
                        benefitting from the purchases if such person 
                        or entity is, in whole or in part, other than 
                        the purchaser or the purchaser's employer.
                    ``(E) Discretion to withhold allowances.--Nothing 
                in this paragraph prevents the Administrator from 
                exercising discretion to withhold and retire 
                consumption allowances that would otherwise be 
                available for auction or nonauction sale. Not later 
                than 18 months after the date of enactment of this 
                section, the Administrator shall promulgate regulations 
                establishing criteria for withholding and retiring 
                consumption allowances.
            ``(5) Banking.--A consumption allowance or destruction 
        offset credit may be used to meet the compliance obligation 
        requirements of paragraph (1) in--
                    ``(A) the vintage year for the allowance or 
                destruction offset credit; or
                    ``(B) any calendar year subsequent to the vintage 
                year for the allowance or destruction offset credit.
            ``(6) Auctions.--
                    ``(A) Initial regulations.--Not later than 18 
                months after the date of enactment of this section, the 
                Administrator shall promulgate regulations governing 
                the auction of allowances under this section. Such 
                regulations shall include the following requirements:
                            ``(i) Frequency; first auction.--Auctions 
                        shall be held one time per year at regular 
                        intervals, with the first auction to be held no 
                        later than October 31, 2011.
                            ``(ii) Auction format.--Auctions shall 
                        follow a single-round, sealed-bid, uniform 
                        price format.
                            ``(iii) Financial assurance.--The 
                        Administrator may establish financial assurance 
                        requirements to ensure that auction 
                        participants can and will perform on their 
                        bids.
                            ``(iv) Disclosure of beneficial 
                        ownership.--Each bidder in the auction shall be 
                        required to disclose the person or entity 
                        sponsoring or benefitting from the bidder's 
                        participation in the auction if such person or 
                        entity is, in whole or in part, other than the 
                        bidder.
                            ``(v) Publication of information.--After 
                        the auction, the Administrator shall, in a 
                        timely fashion, publish the number of bidders, 
                        number of winning bidders, the quantity of 
                        allowances sold, and the auction clearing 
                        price.
                            ``(vi) Bidding limits in 2012.--In the 
                        vintage year 2012 auction, no auction 
                        participant may, directly or in concert with 
                        another participant, bid for or purchase more 
                        allowances offered for sale at the auction than 
                        the greater of--
                                    ``(I) the number of allowances 
                                which, when added to the number of 
                                allowances available for purchase by 
                                the participant in the producer-
                                importer pool non-auction sale, would 
                                equal the participant's annual average 
                                consumption of class II, group II 
                                substances in calendar years 2004, 
                                2005, and 2006; or
                                    ``(II) the number of allowances 
                                equal to the product of--
                                            ``(aa) 1.20 multiplied by 
                                        the participant's allocation 
                                        share of the producer-importer 
                                        pool non-auction sale as 
                                        determined under paragraph 
                                        (4)(C)(ii); and
                                            ``(bb) the number of 
                                        vintage year 2012 allowances 
                                        offered at auction.
                            ``(vii) Bidding limits in 2013.--In the 
                        vintage year 2013 auction, no auction 
                        participant may, directly or in concert with 
                        another participant, bid for or purchase more 
                        allowances offered for sale at the auction than 
                        the product of--
                                    ``(I) 1.15 multiplied by the ratio 
                                of the total number of vintage year 
                                2012 allowances purchased by the 
                                participant from the auction and from 
                                the producer-importer pool non-auction 
                                sale to the total number of vintage 
                                year 2012 allowances in the producer-
                                importer pool; and
                                    ``(II) the number of vintage year 
                                2013 allowances offered at auction.
                            ``(viii) Bidding limits in subsequent 
                        years.--In the auctions for vintage year 2014 
                        and subsequent vintage years, no auction 
                        participant may, directly or in concert with 
                        another participant, bid for or purchase more 
                        allowances offered for sale at the auction than 
                        the product of--
                                    ``(I) 1.15 multiplied by the ratio 
                                of the highest number of allowances 
                                required to be held by the participant 
                                in any of the three prior vintage years 
                                to meet its compliance obligation under 
                                paragraph (1) to the total number of 
                                allowances in the producer-importer 
                                pool for such vintage year; and
                                    ``(II) the number of allowances 
                                offered at auction for that vintage 
                                year.
                            ``(ix) Other requirements.--The 
                        Administrator may include in the regulations 
                        such other requirements or provisions as the 
                        Administrator considers necessary to promote 
                        effective, efficient, transparent, and fair 
                        administration of auctions under this section.
                    ``(B) Revision of regulations.--The Administrator 
                may, at any time, revise the initial regulations 
                promulgated under subparagraph (A) based on the 
                Administrator's experience in administering allowance 
                auctions by promulgating new regulations. Such revised 
                regulations need not meet the requirements identified 
                in subparagraph (A) if the Administrator determines 
                that an alternative auction design would be more 
                effective, taking into account factors including costs 
                of administration, transparency, fairness, and risks of 
                collusion or manipulation. In determining whether and 
                how to revise the initial regulations under this 
                paragraph, the Administrator shall not consider 
                maximization of revenues to the Federal Government.
                    ``(C) Delegation or contract.--Pursuant to 
                regulations under this section, the Administrator may, 
                by delegation or contract, provide for the conduct of 
                auctions under the Administrator's supervision by other 
                departments or agencies of the Federal Government or by 
                nongovernmental agencies, groups, or organizations.
            ``(7) Payments for allowances.--
                    ``(A) Initial regulations.--Not later than 18 
                months after the date of enactment of this section, the 
                Administrator shall promulgate regulations governing 
                the payment for allowances purchased in auction and 
                non-auction sales under this section. Such regulations 
                shall include the requirement that, in the event that 
                full payment for purchased allowances is not made on 
                the date of purchase, equal payments shall be made one 
                time per calendar quarter with all payments for 
                allowances of a vintage year made by the end of that 
                vintage year.
                    ``(B) Revision of regulations.-- The Administrator 
                may, at any time, revise the initial regulations 
                promulgated under subparagraph (A) based on the 
                Administrator's experience in administering collection 
                of payments by promulgating new regulations. Such 
                revised regulations need not meet the requirements 
                identified in subparagraph (A) if the Administrator 
                determines that an alternative payment structure or 
                frequency would be more effective, taking into account 
                factors including cost of administration, transparency, 
                and fairness. In determining whether and how to revise 
                the initial regulations under this paragraph, the 
                Administrator shall not consider maximization of 
                revenues to the Federal Government.
                    ``(C) Penalties for non-payment.--Failure to pay 
                for purchased allowances in accordance with the 
                regulations promulgated pursuant to this paragraph 
                shall be a violation of the requirements of subsection 
                (b). Section 113(c)(3) shall apply in the case of any 
                person who knowingly fails to pay for purchased 
                allowances in accordance with the regulations 
                promulgated pursuant to this paragraph.
            ``(8) Imported products.--If the United States becomes a 
        party or otherwise adheres to a multilateral agreement, 
        including any amendment to the Montreal Protocol on Substances 
        That Deplete the Ozone Layer, which restricts the production or 
        consumption of class II, group II substances--
                    ``(A) as of the date on which such agreement or 
                amendment enters into force, it shall no longer be 
                unlawful for any person to import from a party to such 
                agreement or amendment any product containing any class 
                II, group II substance whose production or consumption 
                is regulated by such agreement or amendment without 
                holding one consumption allowance or one destruction 
                offset credit for each carbon dioxide equivalent ton of 
                the class II, group II substance;
                    ``(B) the Administrator shall promulgate 
                regulations within 12 months of the date the United 
                States becomes a party or otherwise adheres to such 
                agreement or amendment, or the date on which such 
                agreement or amendment enters into force, whichever is 
                later, to establish a new baseline for purposes of 
                paragraph (2), which new baseline shall be the original 
                baseline less the carbon dioxide equivalent of the 
                annual average quantity of any class II substances 
                regulated by such agreement or amendment contained in 
                products imported from parties to such agreement or 
                amendment in calendar years 2004, 2005, and 2006;
                    ``(C) as of the date on which such agreement or 
                amendment enters into force, no person importing any 
                product containing any class II, group II substance 
                may, directly or in concert with another person, 
                purchase any consumption allowances for sale by the 
                Administrator for the importation of products from a 
                party to such agreement or amendment that contain any 
                class II, group II substance restricted by such 
                agreement or amendment; and
                    ``(D) the Administrator may adjust the two 
                allowance pools established in paragraph (4) such that 
                up to 90 percent of the consumption allowances 
                available for a calendar year are placed in the 
                producer-importer pool with the remaining consumption 
                allowances placed in the secondary pool.
            ``(9) Offsets.--
                    ``(A) Chlorofluorocarbon destruction.--Within 18 
                months after the date of enactment of this section, the 
                Administrator shall promulgate regulations to provide 
                for the issuance of offset credits for the destruction, 
                in the calendar year 2012 or later, of 
                chlorofluorocarbons in the United States. The 
                Administrator shall establish and distribute to the 
                destroying entity a quantity of destruction offset 
                credits equal to 0.8 times the number of metric tons of 
                carbon dioxide equivalents of reduction achieved 
                through the destruction. No destruction offset credits 
                shall be established for the destruction of a class II, 
                group II substance.
                    ``(B) Definition.--For purposes of this paragraph, 
                the term `destruction' means the conversion of a 
                substance by thermal, chemical, or other means to 
                another substance with little or no carbon dioxide 
                equivalent value and no ozone depletion potential.
                    ``(C) Regulations.--The regulations promulgated 
                under this paragraph shall include standards and 
                protocols for project eligibility, certification of 
                destroyers, monitoring, tracking, destruction 
                efficiency, quantification of project and baseline 
                emissions and carbon dioxide equivalent value, and 
                verification. The Administrator shall ensure that 
                destruction offset credits represent real and 
                verifiable destruction of chlorofluorocarbons or other 
                class I or class II, group I, substances authorized 
                under subparagraph (D).
                    ``(D) Other substances.--The Administrator may 
                promulgate regulations to add to the list of class I 
                and class II, group I, substances that may be destroyed 
                for destruction offset credits, taking into account a 
                candidate substance's carbon dioxide equivalent value, 
                ozone depletion potential, prevalence in banks in the 
                United States, and emission rates, as well as the need 
                for additional cost containment under the class II, 
                group II cap and the integrity of the class II, group 
                II cap. The Administrator shall not add a class I or 
                class II, group I substance to the list if the 
                consumption of the substance has not been completely 
                phased-out internationally (except for essential use 
                exemptions or other similar exemptions) pursuant to the 
                Montreal Protocol.
                    ``(E) Extension of offsets.--(i) At any time after 
                the Administrator promulgates regulations pursuant to 
                subparagraph (A), the Administrator may, pursuant to 
                the requirements of part D of title VII and based on 
                the carbon dioxide equivalent value of the substance 
                destroyed, add the types of destruction projects 
                authorized to receive destruction offset credits under 
                this paragraph to the list of types of projects 
                eligible for offset credits under section 733. If such 
                projects are added to the list under section 733, the 
                issuance of offset credits for such projects under part 
                D of title VII shall be governed by the requirements of 
                such part D, while the issuance of offset credits for 
                such projects under this paragraph shall be governed by 
                the requirements of this paragraph. Nothing in this 
                paragraph shall affect the issuance of offset credits 
                under section 740.
                    ``(ii) The Administrator shall not make the 
                addition under clause (i) unless the Administrator 
                finds that insufficient destruction is occurring or is 
                projected to occur under this paragraph and that the 
                addition would increase destruction.
                    ``(iii) In no event shall more than one destruction 
                offset credit be issued under title VII and this 
                section for the destruction of the same quantity of a 
                substance.
            ``(10) Legal status of allowances and credits.--None of the 
        following constitutes a property right:
                    ``(A) A production or consumption allowance.
                    ``(B) A destruction offset credit.
    ``(c) Deadlines for Compliance.--Notwithstanding the deadlines 
specified for class II substances in sections 608, 609, 610, 612, and 
613 that occur prior to January 1, 2009, the deadline for promulgating 
regulations under those sections for class II, group II substances 
shall be January 1, 2012.
    ``(d) Exceptions for Essential Uses.--Notwithstanding any phase 
down of production and consumption required by this section, to the 
extent consistent with any applicable multilateral agreement to which 
the United States is a party or otherwise adheres, the Administrator 
may provide the following exceptions for essential uses:
            ``(1) Medical devices.--The Administrator, after notice and 
        opportunity for public comment, and in consultation with the 
        Commissioner of the Food and Drug Administration, may provide 
        an exception for the production and consumption of class II, 
        group II substances solely for use in medical devices.
            ``(2) Aviation and space vehicle safety.--The 
        Administrator, after notice and opportunity for public comment, 
        may authorize the production and consumption of limited 
        quantities of class II, group II substances solely for the 
        purposes of aviation or space vehicle safety if either the 
        Administrator of the Federal Aviation Administration or the 
        Administrator of the National Aeronautics and Space 
        Administration, in consultation with the Administrator, 
        determines that no safe and effective substitute has been 
        developed and that such authorization is necessary for aviation 
        or space flight safety purposes.
    ``(e) Developing Countries.--Notwithstanding any phase down of 
production required by this section, the Administrator, after notice 
and opportunity for public comment, may authorize the production of 
limited quantities of class II, group II substances in excess of the 
amounts otherwise allowable under this section solely for export to, 
and use in, developing countries. Any production authorized under this 
subsection shall be solely for purposes of satisfying the basic 
domestic needs of such countries as provided in applicable 
international agreements, if any, to which the United States is a party 
or otherwise adheres.
    ``(f) National Security; Fire Suppression, etc.--The provisions of 
subsection (f) and paragraphs (1) and (2) of subsection (g) of section 
604 shall apply to any consumption and production phase down of class 
II, group II substances in the same manner and to the same extent, 
consistent with any applicable international agreement to which the 
United States is a party or otherwise adheres, as such provisions apply 
to the substances specified in such subsection.
    ``(g) Accelerated Schedule.--In lieu of section 606, the provisions 
of paragraphs (1), (2), and (3) of this subsection shall apply in the 
case of class II, group II substances.
            ``(1) In general.--The Administrator shall promulgate 
        initial regulations not later than 18 months after the date of 
        enactment of this section, and revised regulations any time 
        thereafter, which establish a schedule for phasing down the 
        consumption (and, if the condition in subsection (b)(1)(B) is 
        met, the production) of class II, group II substances that is 
        more stringent than the schedule set forth in this section if, 
        based on the availability of substitutes, the Administrator 
        determines that such more stringent schedule is practicable, 
        taking into account technological achievability, safety, and 
        other factors the Administrator deems relevant, or if the 
        Montreal Protocol, or any applicable international agreement to 
        which the United States is a party or otherwise adheres, is 
        modified or established to include a schedule or other 
        requirements to control or reduce production, consumption, or 
        use of any class II, group II substance more rapidly than the 
        applicable schedule under this section.
            ``(2) Petition.--Any person may submit a petition to 
        promulgate regulations under this subsection in the same manner 
        and subject to the same procedures as are provided in section 
        606(b).
            ``(3) Inconsistency.--If the Administrator determines that 
        the provisions of this section regarding banking, allowance 
        rollover, or destruction offset credits create a significant 
        potential for inconsistency with the requirements of any 
        applicable international agreement to which the United States 
        is a party or otherwise adheres, the Administrator may 
        promulgate regulations restricting the availability of banking, 
        allowance rollover, or destruction offset credits to the extent 
        necessary to avoid such inconsistency.
    ``(h) Exchange.--Section 607 shall not apply in the case of class 
II, group II substances. Production and consumption allowances for 
class II, group II substances may be freely exchanged or sold but may 
not be converted into allowances for class II, group I substances.
    ``(i) Labeling.--(1) In applying section 611 to products containing 
or manufactured with class II, group II substances, in lieu of the 
words `destroying ozone in the upper atmosphere' on labels required 
under section 611 there shall be substituted the words `contributing to 
global warming'.
    ``(2) The Administrator may, through rulemaking, exempt from the 
requirements of section 611 products containing or manufactured with 
class II, group II substances determined to have little or no carbon 
dioxide equivalent value compared to other substances used in similar 
products.
    ``(j) Nonessential Products.--For the purposes of section 610, 
class II, group II substances shall be regulated under section 610(b), 
except that in applying section 610(b) the word `hydrofluorocarbon' 
shall be substituted for the word `chlorofluorocarbon' and the term 
`class II, group II' shall be substituted for the term `class I'. Class 
II, group II substances shall not be subject to the provisions of 
section 610(d).
    ``(k) International Transfers.--In the case of class II, group II 
substances, in lieu of section 616, this subsection shall apply. To the 
extent consistent with any applicable international agreement to which 
the United States is a party or otherwise adheres, including any 
amendment to the Montreal Protocol, the United States may engage in 
transfers with other parties to such agreement or amendment under the 
following conditions:
            ``(1) The United States may transfer production allowances 
        to another party to such agreement or amendment if, at the time 
        of the transfer, the Administrator establishes revised 
        production limits for the United States accounting for the 
        transfer in accordance with regulations promulgated pursuant to 
        this subsection.
            ``(2) The United States may acquire production allowances 
        from another party to such agreement or amendment if, at the 
        time of the transfer, the Administrator finds that the other 
        party has revised its domestic production limits in the same 
        manner as provided with respect to transfers by the United 
        States in the regulations promulgated pursuant to this 
        subsection.
    ``(l) Relationship to Other Laws.--
            ``(1) State laws.--For purposes of section 116, the 
        requirements of this section for class II, group II substances 
        shall be treated as requirements for the control and abatement 
        of air pollution.
            ``(2) Multilateral agreements.--Section 614 shall apply to 
        the provisions of this section concerning class II, group II 
        substances, except that for the words `Montreal Protocol' there 
        shall be substituted the words `Montreal Protocol, or any 
        applicable multilateral agreement to which the United States is 
        a party or otherwise adheres that restricts the production or 
        consumption of class II, group II substances,' and for the 
        words `Article 4 of the Montreal Protocol' there shall be 
        substituted `any provision of such multilateral agreement 
        regarding trade with non-parties'.
            ``(3) Federal facilities.--For purposes of section 118, the 
        requirements of this section for class II, group II substances 
        and corresponding State, interstate, and local requirements, 
        administrative authority, and process and sanctions shall be 
        treated as requirements for the control and abatement of air 
        pollution within the meaning of section 118.
    ``(m) Carbon Dioxide Equivalent Value.--(1) In lieu of section 
602(e), the provisions of this subsection shall apply in the case of 
class II, group II substances. Simultaneously with establishing the 
list of class II, group II substances, and simultaneously with any 
addition to that list, the Administrator shall publish the carbon 
dioxide equivalent value of each listed class II, group II substance, 
based on a determination of the number of metric tons of carbon dioxide 
that makes the same contribution to global warming over 100 years as 1 
metric ton of each class II, group II substance.
    ``(2) Not later than February 1, 2017, and not less than every 5 
years thereafter, the Administrator shall--
            ``(A) review, and if appropriate, revise the carbon dioxide 
        equivalent values established for class II, group II substances 
        based on a determination of the number of metric tons of carbon 
        dioxide that makes the same contributions to global warming 
        over 100 years as 1 metric ton of each class II, group II 
        substance; and
            ``(B) publish in the Federal Register the results of that 
        review and any revisions.
    ``(3) A revised determination published in the Federal Register 
under paragraph (2)(B) shall take effect for production of class II, 
group II substances, consumption of class II, group II substances, and 
importation of products containing class II, group II substances 
starting on January 1 of the first calendar year starting at least 9 
months after the date on which the revised determination was published.
    ``(4) The Administrator may decrease the frequency of review and 
revision under paragraph (2) if the Administrator determines that such 
decrease is appropriate in order to synchronize such review and 
revisions with any similar review process carried out pursuant to the 
United Nations Framework Convention on Climate Change, an agreement 
negotiated under that convention, The Vienna Convention for the 
Protection of the Ozone Layer, or an agreement negotiated under that 
convention, except that in no event shall the Administrator carry out 
such review and revision any less frequently than every 10 years.
    ``(n) Reporting Requirements.--In lieu of subsections (b) and (c) 
of section 603, paragraphs (1) and (2) of this subsection shall apply 
in the case of class II, group II substances:
            ``(1) In general.--On a quarterly basis, or such other 
        basis (not less than annually) as determined by the 
        Administrator, each person who produced, imported, or exported 
        a class II, group II substance, or who imported a product 
        containing a class II, group II substance, shall file a report 
        with the Administrator setting forth the carbon dioxide 
        equivalent amount of the substance that such person produced, 
        imported, or exported, as well as the amount that was contained 
        in products imported by that person, during the preceding 
        reporting period. Each such report shall be signed and attested 
        by a responsible officer. If all other reporting is complete, 
        no such report shall be required from a person after April 1 of 
        the calendar year after such person permanently ceases 
        production, importation, and exportation of the substance, as 
        well as importation of products containing the substance, and 
        so notifies the Administrator in writing. If the United States 
        becomes a party or otherwise adheres to a multilateral 
        agreement, including any amendment to the Montreal Protocol on 
        Substances That Deplete the Ozone Layer, that restricts the 
        production or consumption of class II, group II substances, 
        then, if all other reporting is complete, no such report shall 
        be required from a person with respect to importation from 
        parties to such agreement or amendment of products containing 
        any class II, group II substance restricted by such agreement 
        or amendment, after April 1 of the calendar year following the 
        year during which such agreement or amendment enters into 
        force.
            ``(2) Baseline reports for class ii, group ii substances.--
                    ``(A) In general.--Unless such information has been 
                previously reported to the Administrator, on the date 
                on which the first report under paragraph (1) of this 
                subsection is required to be filed, each person who 
                produced, imported, or exported a class II, group II 
                substance, or who imported a product containing a class 
                II substance, (other than a substance added to the list 
                of class II, group II substances after the publication 
                of the initial list of such substances under this 
                section), shall file a report with the Administrator 
                setting forth the amount of such substance that such 
                person produced, imported, exported, or that was 
                contained in products imported by that person, during 
                each of calendar years 2004, 2005, and 2006.
                    ``(B) Producers.--In reporting under subparagraph 
                (A), each person who produced in the United States a 
                class II substance during calendar years 2004, 2005, or 
                2006 shall--
                            ``(i) report all acquisitions or purchases 
                        of class II substances during each of calendar 
                        years 2004, 2005, and 2006 from all other 
                        persons who produced in the United States a 
                        class II substance during calendar years 2004, 
                        2005, or 2006, and supply evidence of such 
                        acquisitions and purchases as deemed necessary 
                        by the Administrator; and
                            ``(ii) report all transfers or sales of 
                        class II substances during each of calendar 
                        years 2004, 2005, and 2006 to all other persons 
                        who produced in the United States a class II 
                        substance during calendar years 2004, 2005, or 
                        2006, and supply evidence of such transfers and 
                        sales as deemed necessary by the Administrator.
                    ``(C) Added substances.--In the case of a substance 
                added to the list of class II, group II substances 
                after publication of the initial list of such 
                substances under this section, each person who 
                produced, imported, exported, or imported products 
                containing such substance in calendar year 2004, 2005, 
                or 2006 shall file a report with the Administrator 
                within 180 days after the date on which such substance 
                is added to the list, setting forth the amount of the 
                substance that such person produced, imported, and 
                exported, as well as the amount that was contained in 
                products imported by that person, in calendar years 
                2004, 2005, and 2006.
    ``(o) Stratospheric Ozone and Climate Protection Fund.--
            ``(1) In general.--There is established in the Treasury of 
        the United States a Stratospheric Ozone and Climate Protection 
        Fund.
            ``(2) Deposits.--The Administrator shall deposit all 
        proceeds from the auction and non-auction sale of allowances 
        under this section into the Stratospheric Ozone and Climate 
        Protection Fund.
            ``(3) Use.--Amounts deposited into the Stratospheric Ozone 
        and Climate Protection Fund shall be available, subject to 
        appropriations, exclusively for the following purposes:
                    ``(A) Recovery, recycling, and reclamation.--The 
                Administrator may utilize funds to establish a program 
                to incentivize the recovery, recycling, and reclamation 
                of any Class II substances in order to reduce emissions 
                of such substances.
                    ``(B) Multilateral fund.--If the United States 
                becomes a party or otherwise adheres to a multilateral 
                agreement, including any amendment to the Montreal 
                Protocol on Substances That Deplete the Ozone Layer, 
                which restricts the production or consumption of class 
                II, group II substances, the Administrator may utilize 
                funds to meet any related contribution obligation of 
                the United States to the Multilateral Fund for the 
                Implementation of the Montreal Protocol or similar 
                multilateral fund established under such multilateral 
                agreement.
                    ``(C) Best-in-class appliances deployment 
                program.--The Secretary of Energy is authorized to 
                utilize funds to carry out the purposes of section 214 
                of the American Clean Energy and Security Act of 2009.
                    ``(D) Low global warming product transition 
                assistance program.--
                            ``(i) In general.--The Administrator, in 
                        consultation with the Secretary of Energy, may 
                        utilize funds in fiscal years 2012 through 2022 
                        to establish a program to provide financial 
                        assistance to manufacturers of products 
                        containing class II, group II substances to 
                        facilitate the transition to products that 
                        contain or utilize alternative substances with 
                        no or low carbon dioxide equivalent value and 
                        no ozone depletion potential.
                            ``(ii) Definition.--In this subparagraph, 
                        the term `products' means refrigerators, 
                        freezers, dehumidifiers, air conditioners, foam 
                        insulation, technical aerosols, fire protection 
                        systems, and semiconductors.
                            ``(iii) Financial assistance.--The 
                        Administrator may provide financial assistance 
                        to manufacturers pursuant to clause (i) for--
                                    ``(I) the design and configuration 
                                of new products that use alternative 
                                substances with no or low carbon 
                                dioxide equivalent value and no ozone 
                                depletion potential; and
                                    ``(II) the redesign and retooling 
                                of facilities for the manufacture of 
                                products in the United States that use 
                                alternative substances with no or low 
                                carbon dioxide equivalent value and no 
                                ozone depletion potential.
                            ``(iv) Reports.--For any fiscal year during 
                        which the Administrator provides financial 
                        assistance pursuant to this subparagraph, the 
                        Administrator shall submit a report to the 
                        Congress within 3 months of the end of such 
                        fiscal year detailing the amounts, recipients, 
                        specific purposes, and results of the financial 
                        assistance provided.''.
    (b) Table of Contents.--The table of contents of title VI of the 
Clean Air Act (42 U.S.C. 7671 et seq.) is amended by adding the 
following new item at the end thereof:

``Sec. 619. Hydrofluorocarbons (HFCs).''.
    (c) Fire Suppression Agents.--Section 605(a) of the Clean Air Act 
(42 U.S.C. 7671(a)) is amended--
            (1) by striking ``or'' at the end of paragraph (2);
            (2) by striking the period at the end of paragraph (3) and 
        inserting ``; or''; and
            (3) by adding the following new paragraph after paragraph 
        (3):
            ``(4) is listed as acceptable for use as a fire suppression 
        agent for nonresidential applications in accordance with 
        section 612(c).''.
    (d) Motor Vehicle Air Conditioners.--
            (1) Section 609(e) of the Clean Air Act (42 U.S.C. 
        7671h(e)) is amended by inserting ``, group I'' after each 
        reference to ``class II'' in the text and heading.
            (2) Section 609 of the Clean Air Act (42 U.S.C. 7671h) is 
        amended by adding the following new subsection after subsection 
        (e):
    ``(f) Class II, Group II Substances.--
            ``(1) Repair.--The Administrator may promulgate regulations 
        establishing requirements for repair of motor vehicle air 
        conditioners prior to adding a class II, group II substance.
            ``(2) Small containers.--(A) The Administrator may 
        promulgate regulations establishing servicing practices and 
        procedures for recovery of class II, group II substances from 
        containers which contain less than 20 pounds of such class II, 
        group II substances.
            ``(B) Not later than 18 months after enactment of this 
        subsection, the Administrator shall either promulgate 
        regulations requiring that containers which contain less than 
        20 pounds of a class II, group II substance be equipped with a 
        device or technology that limits refrigerant emissions and 
        leaks from the container and limits refrigerant emissions and 
        leaks during the transfer of refrigerant from the container to 
        the motor vehicle air conditioner or issue a determination that 
        such requirements are not necessary or appropriate.
            ``(C) Not later than 18 months after enactment of this 
        subsection, the Administrator shall promulgate regulations 
        establishing requirements for consumer education materials on 
        best practices associated with the use of containers which 
        contain less than 20 pounds of a class II, group II substance 
        and prohibiting the sale or distribution, or offer for sale or 
        distribution, of any class II, group II substance in any 
        container which contains less than 20 pounds of such class II, 
        group II substance, unless consumer education materials 
        consistent with such requirements are displayed and available 
        at point-of-sale locations, provided to the consumer, or 
        included in or on the packaging of the container which contain 
        less than 20 pounds of a class II, group II substance.
            ``(D) The Administrator may, through rulemaking, extend the 
        requirements established under this paragraph to containers 
        which contain 30 pounds or less of a class II, group II 
        substance if the Administrator determines that such action 
        would produce significant environmental benefits.
            ``(3) Restriction of sales.--Effective January 1, 2014, no 
        person may sell or distribute or offer to sell or distribute or 
        otherwise introduce into interstate commerce any motor vehicle 
        air conditioner refrigerant in any size container unless the 
        substance has been found acceptable for use in a motor vehicle 
        air conditioner under section 612.''.
    (e) Safe Alternatives Policy.--Section 612(e) of the Clean Air Act 
(42 U.S.C. 7671k(e)) is amended by inserting ``or class II'' after each 
reference to ``class I''.

SEC. 333. BLACK CARBON.

    (a) Definition.--As used in this section, the term ``black carbon'' 
means primary light absorbing aerosols, as defined by the 
Administrator, based on the best available science.
    (b) Black Carbon Abatement Report.--Not later than one year after 
the date of enactment of this section, the Administrator shall, in 
consultation with other appropriate Federal agencies, submit to 
Congress a report regarding black carbon emissions. The report shall 
include the following:
            (1) A summary of the current information and research that 
        identifies--
                    (A) an inventory of the major sources of black 
                carbon emissions in the United States and throughout 
                the world, including--
                            (i) an estimate of the quantity of current 
                        and projected future emissions; and
                            (ii) the net climate forcing of the 
                        emissions from such sources, including 
                        consideration of co-emissions of other 
                        pollutants;
                    (B) effective and cost-effective control 
                technologies, operations, and strategies for additional 
                domestic and international black carbon emissions 
                reductions, such as diesel retrofit technologies on 
                existing on-road, non-road, and stationary engines and 
                programs to address residential cookstoves, and forest 
                and agriculture-based burning;
                    (C) potential metrics and approaches for 
                quantifying the climatic effects of black carbon 
                emissions, including its radiative forcing and warming 
                effects, that may be used to compare the climate 
                benefits of different mitigation strategies, including 
                an assessment of the uncertainty in such metrics and 
                approaches; and
                    (D) the public health and environmental benefits 
                associated with additional controls for black carbon 
                emissions.
            (2) Recommendations regarding--
                    (A) development of additional emissions monitoring 
                techniques and capabilities, modeling, and other black 
                carbon-related areas of study;
                    (B) areas of focus for additional study of 
                technologies, operations, and strategies with the 
                greatest potential to reduce emissions of black carbon 
                and associated public health, economic, and 
                environmental impacts associated with these emissions; 
                and
                    (C) actions, in addition to those identified by the 
                Administrator under section 851 of the Clean Air Act 
                (as added by subsection (c)), the Federal Government 
                may take to encourage or require reductions in black 
                carbon emissions.
    (c) Black Carbon Mitigation.--Title VIII of the Clean Air Act, as 
added by section 331 of this Act, and amended by section 222 of this 
Act, is further amended by adding after part D the following new part:

                         ``PART E--BLACK CARBON

``SEC. 851. BLACK CARBON.

    ``(a) Domestic Black Carbon Mitigation.--Not later than 18 months 
after the date of enactment of this section, the Administrator, taking 
into consideration the public health and environmental impacts of black 
carbon emissions, including the effects on global and regional warming, 
the Arctic, and other snow and ice-covered surfaces, shall propose 
regulations under the existing authorities of this Act to reduce 
emissions of black carbon or propose a finding that existing 
regulations promulgated pursuant to this Act adequately regulate black 
carbon emissions. Not later than two years after the date of enactment 
of this section, the Administrator shall promulgate final regulations 
under the existing authorities of this Act or finalize the proposed 
finding. Such regulations shall not apply to specific types, classes, 
categories, or other suitable groupings of emissions sources that the 
Administrator finds are subject to adequate regulation.
    ``(b) International Black Carbon Mitigation.--
            ``(1) Report.--Not later than one year after the date of 
        enactment of this section, the Administrator, in coordination 
        with the Secretary of State and other appropriate Federal 
        agencies, shall transmit a report to Congress on the amount, 
        type, and direction of all present United States financial, 
        technical, and related assistance to foreign countries to 
        reduce, mitigate, and otherwise abate black carbon emissions.
            ``(2) Other opportunities.--The report required under 
        paragraph (1) shall also identify opportunities and 
        recommendations, including action under existing authorities, 
        to achieve significant black carbon emission reductions in 
        foreign countries through technical assistance or other 
        approaches to--
                    ``(A) promote sustainable solutions to bring clean, 
                efficient, safe, and affordable stoves, fuels, or both 
                stoves and fuels to residents of developing countries 
                that are reliant on solid fuels such as wood, dung, 
                charcoal, coal, or crop residues for home cooking and 
                heating, so as to help reduce the public health, 
                environmental, and economic impacts of black carbon 
                emissions from these sources by--
                            ``(i) identifying key regions for large-
                        scale demonstration efforts, and key partners 
                        in each such region; and
                            ``(ii) developing for each such region a 
                        large-scale implementation strategy with a goal 
                        of collectively reaching 20,000,000 homes over 
                        5 years with interventions that will--
                                    ``(I) increase stove efficiency by 
                                over 50 percent (or such other goal as 
                                determined by the Administrator);
                                    ``(II) reduce emissions of black 
                                carbon by over 60 percent (or such 
                                other goal as determined by the 
                                Administrator); and
                                    ``(III) reduce the incidence of 
                                severe pneumonia in children under 5 
                                years old by over 30 percent (or such 
                                other goal as determined by the 
                                Administrator);
                    ``(B) make technological improvements to diesel 
                engines and provide greater access to fuels that emit 
                less or no black carbon;
                    ``(C) reduce unnecessary agricultural or other 
                biomass burning where feasible alternatives exist;
                    ``(D) reduce unnecessary fossil fuel burning that 
                produces black carbon where feasible alternatives 
                exist;
                    ``(E) reduce other sources of black carbon 
                emissions; and
                    ``(F) improve capacity to achieve greater 
                compliance with existing laws to address black carbon 
                emissions.''.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 334. STATES.

    Section 116 of the Clean Air Act (42 U.S.C. 7416) is amended by 
adding the following at the end thereof: ``For the purposes of this 
section, the phrases `standard or limitation respecting emissions of 
air pollutants' and `requirements respecting control or abatement of 
air pollution' shall include any provision to: cap greenhouse gas 
emissions, require surrender to the State or a political subdivision 
thereof of emission allowances or offset credits established or issued 
under this Act, and require the use of such allowances or credits as a 
means of demonstrating compliance with requirements established by a 
State or political subdivision thereof.''.

SEC. 335. STATE PROGRAMS.

    Title VIII of the Clean Air Act, as added by section 331 of this 
Act and amended by several sections of this Act, is further amended by 
adding after part E (as added by section 333(c) of this Act) the 
following new part:

                        ``PART F--MISCELLANEOUS

``SEC. 861. STATE PROGRAMS.

    ``Notwithstanding section 116, no State or political subdivision 
thereof shall implement or enforce a cap and trade program that covers 
any capped emissions emitted during the years 2012 through 2017. For 
purposes of this section, the term `cap and trade program' means a 
system of greenhouse gas regulation under which a State or political 
subdivision issues a limited number of tradable instruments in the 
nature of emission allowances and requires that sources within its 
jurisdiction surrender such tradeable instruments for each unit of 
greenhouse gases emitted during a compliance period. For purposes of 
this section, a `cap-and-trade program' does not include a target or 
limit on greenhouse gas emissions adopted by a State or political 
subdivision that is implemented other than through the issuance and 
surrender of a limited number of tradable instruments in the nature of 
emission allowances, nor does it include any other standard, limit, 
regulation, or program to reduce greenhouse gas emissions that is not 
implemented through the issuance and surrender of a limited number of 
tradeable instruments in the nature of emission allowances. For 
purposes of this section, the term `cap and trade program' does not 
include, among other things, fleet-wide motor vehicle emission 
requirements that allow greater emissions with increased vehicle 
production, or requirements that fuels, or other products, meet an 
average pollution emission rate or lifecycle greenhouse gas standard.

``SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CONTROL PROGRAMS.

    ``The Administrator is authorized to make grants to air pollution 
control agencies pursuant to section 105 for purposes of assisting in 
the implementation of programs to address global warming established 
under the Safe Climate Act.''.

SEC. 336. ENFORCEMENT.

    (a) Remand.--Section 307(b) of the Clean Air Act (42 U.S.C. 
7607(b)) is amended by adding the following new paragraphs at the end 
thereof:
            ``(3) If the court determines that any action of the 
        Administrator is arbitrary, capricious, or otherwise unlawful, 
        the court may remand such action, without vacatur, if vacatur 
        would impair or delay protection of the environment or public 
        health or otherwise undermine the timely achievement of the 
        purposes of this Act.
            ``(4) If the court determines that any action of the 
        Administrator is arbitrary, capricious, or otherwise unlawful, 
        and remands the matter to the Administrator, the Administrator 
        shall complete final action on remand within an expeditious 
        time period no longer than the time originally allowed for the 
        action or one year, whichever is less, unless the court on 
        motion determines that a shorter or longer period is necessary, 
        appropriate, and consistent with the purposes of this Act. The 
        court of appeals shall have jurisdiction to enforce a deadline 
        for action on remand under this subparagraph.''.
    (b) Petition for Reconsideration.--Section 307(d)(7)(B) of the 
Clean Air Act (42 U.S.C. 7607(d)(7)(B)) is amended as follows:
            (1) By inserting after the second sentence ``If a petition 
        for reconsideration is filed, the Administrator shall take 
        final action on such petition, including promulgation of final 
        action either revising or determining not to revise the action 
        for which reconsideration is sought, within 150 days after the 
        petition is received by the Administrator or the petition shall 
        be deemed denied for the purpose of judicial review.''.
            (2) By amending the third sentence to read as follows: 
        ``Such person may seek judicial review of such denial, or of 
        any other final action, by the Administrator, in response to a 
        petition for reconsideration, in the United States court of 
        appeals for the appropriate circuit (as provided in subsection 
        (b)).''.

SEC. 337. CONFORMING AMENDMENTS.

    (a) Federal Enforcement.--Section 113 of the Clean Air Act (42 
U.S.C. 7413) is amended as follows:
            (1) In subsection (a)(3), by striking ``or title VI,'' and 
        inserting ``title VI, title VII, or title VIII''.
            (2) In subsection (b), by striking ``or a major stationary 
        source'' and inserting ``a major stationary source, or a 
        covered EGU under title VIII'' in the material preceding 
        paragraph (1).
            (3) In paragraph (2) of subsection (b), by striking ``or 
        title VI'' and inserting ``title VI, title VII, or title 
        VIII''.
            (4) In subsection (c)--
                    (A) in the first sentence of paragraph (1), by 
                striking ``or title VI (relating to stratospheric ozone 
                control),'' and inserting ``title VI, title VII, or 
                title VIII,''; and
                    (B) in the first sentence of paragraph (3), by 
                striking ``or VI'' and inserting ``VI, VII, or VIII''.
            (5) In subsection (d)(1)(B), by striking ``or VI'' and 
        inserting ``VI, VII, or VIII''.
            (6) In subsection (f), in the first sentence, by striking 
        ``or VI'' and inserting ``VI, VII, or VIII''.
    (b) Retention of State Authority.--Section 116 of the Clean Air Act 
(42 U.S.C. 7416) is amended as follows:
            (1) By striking ``and 233'' and inserting ``233''.
            (2) By striking ``of moving sources)'' and inserting ``of 
        moving sources), and 861 (preempting certain State greenhouse 
        gas programs for a limited time)''.
    (c) Inspections, Monitoring, and Entry.--Section 114(a) of the 
Clean Air Act (42 U.S.C. 7414(a)) is amended by striking ``section 
112,'' and all that follows through ``(ii)'' and inserting the 
following: ``section 112, or any regulation of greenhouse gas emissions 
under title VII or VIII, (ii)''.
    (d) Enforcement.--Subsection (f) of section 304 of the Clean Air 
Act (42 U.S.C. 7604(f)) is amended as follows:
            (1) By striking ``; or'' at the end of paragraph (3) 
        thereof and inserting a comma.
            (2) By striking the period at the end of paragraph (4) 
        thereof and inserting ``, or''.
            (3) By adding the following after paragraph (4) thereof:
            ``(5) any requirement of title VII or VIII.''.
    (e) Administrative Proceedings and Judicial Review.--Section 307 of 
the Clean Air Act (42 U.S.C. 7607) is amended as follows:
            (1) In subsection (a), by striking ``, or section 306'' and 
        inserting ``section 306, or title VII or VIII''.
            (2) In subsection (b)(1)--
                    (A) by striking ``,,'' and inserting ``,'' in each 
                place such punctuation appears; and
                    (B) by striking ``section 120,'' in the first 
                sentence and inserting ``section 120, any final action 
                under title VII or VIII,''.
            (3) In subsection (d)(1) by amending subparagraph (S) to 
        read as follows:
                    ``(S) the promulgation or revision of any 
                regulation under title VII or VIII,''.

SEC. 338. DAVIS-BACON COMPLIANCE.

    (a) In General.--Notwithstanding any other provision of law and in 
a manner consistent with other provisions in this Act, to receive 
emission allowances or funding under this Act, or the amendments made 
by this Act, the recipient shall provide reasonable assurances that all 
laborers and mechanics employed by contractors and subcontractors on 
projects funded directly by or assisted in whole or in part by and 
through the Federal Government pursuant to this Act, or the amendments 
made by this Act, or by any entity established in accordance with this 
Act, or the amendments made by this Act, including the Carbon Storage 
Research Corporation, will be paid wages at rates not less than those 
prevailing on projects of a character similar in the locality as 
determined by the Secretary of Labor in accordance with subchapter IV 
of chapter 31 of title 40, United States Code (commonly known as the 
``Davis-Bacon Act''). With respect to the labor standards specified in 
this section, the Secretary of Labor shall have the authority and 
functions set forth in Reorganization Plan Numbered 14 of 1950 (64 
Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States 
Code.
    (b) Exemption.--Neither subsection (a) nor the requirements of 
subchapter IV of chapter 31 of title 40, United States Code, shall 
apply to retrofitting of the following:
            (1) Single family homes (both attached and detached) under 
        section 202.
            (2) Owner-occupied residential units in larger buildings 
        that have their own dedicated space-conditioning systems under 
        section 202.
            (3) Residential buildings (as defined in section 202(a)(5)) 
        if designed for residential use by less than 4 families.
            (4) Nonresidential buildings (as defined in section 
        202(a)(1)) if the net interior space of such nonresidential 
        building is less than 6,500 square feet.

SEC. 339. NATIONAL STRATEGY FOR DOMESTIC BIOLOGICAL CARBON 
              SEQUESTRATION.

    Not later than 1 year after the date of enactment of this Act, the 
Administrator of the Environmental Protection Agency, in consultation 
with the Secretary of Energy, the Secretary of Agriculture, the 
Secretary of the Interior, and the heads of such other relevant Federal 
agencies as the President may designate, shall submit to Congress a 
report setting forth a unified and comprehensive strategy to address 
the key legal, regulatory, technological, and other barriers to 
maximizing the potential for sustainable biological sequestration of 
carbon within the United States.

                  Subtitle D--Carbon Market Assurance

SEC. 341. CARBON MARKET ASSURANCE.

    (a) Amendment.--The Federal Power Act (16 U.S.C. 791a and 
following) is amended by adding at the end the following:

                   ``PART IV--CARBON MARKET ASSURANCE

``SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MARKETS.

    ``(a) Definitions.--In this section:
            ``(1) Contract of sale.--The term `contract of sale' 
        includes sales, agreements of sale, and agreements to sell.
            ``(2) Covered entity.--The term `covered entity' shall have 
        the meaning given in section 700 of the Clean Air Act.
            ``(3) Future delivery.--The term `future delivery' does not 
        include any sale of any cash commodity for deferred shipment or 
        delivery.
            ``(4) Offset creation contract.--The term `offset creation 
        contract' mean a written agreement for the origination and 
        development of an offset project, and the related issuance of 
        offset credits, pursuant to title VII of the Clean Air Act.
            ``(5) Regulated allowance.--The term `regulated allowance' 
        means any emission allowance, compensatory allowance, offset 
        credit, or Federal renewable electricity credit established or 
        issued under the American Clean Energy and Security Act of 
        2009.
            ``(6) Regulated allowance derivative.--The term `regulated 
        allowance derivative' means an instrument that is, or includes, 
        an instrument--
                    ``(A) which--
                            ``(i) is of the character of, or is 
                        commonly known to the trade as, a `put option', 
                        `call option', `privilege', `indemnity', 
                        `advance guaranty', `decline guaranty', or 
                        `swap agreement'; or
                            ``(ii) is a contract of sale for future 
                        delivery other than an offset creation 
                        contract; and
                    ``(B) the value of which, in whole or in part, is 
                expressly linked to the price of a regulated allowance 
                or another regulated allowance derivative.
            ``(7) Regulated instrument.--The term `regulated 
        instrument' means a regulated allowance or a regulated 
        allowance derivative.
    ``(b) Regulated Allowance Market.--
            ``(1) Authority.--The Commission shall promulgate 
        regulations for the establishment, operation, and oversight of 
        markets for regulated allowances not later than 18 months after 
        the date of the enactment of this section, and from time to 
        time thereafter as may be appropriate.
            ``(2) Regulations.--The regulations promulgated pursuant to 
        paragraph (1) shall--
                    ``(A) provide for effective and comprehensive 
                market oversight;
                    ``(B) prohibit fraud, market manipulation 
                (including an entity's fraudulent or manipulative 
                conduct with respect to regulated allowance derivatives 
                that benefits the entity in regulated allowance 
                markets), and excess speculation, and provide measures 
                to limit unreasonable fluctuation in the prices of 
                regulated allowances;
                    ``(C) facilitate compliance with title VII of the 
                Clean Air Act by covered entities;
                    ``(D) ensure market transparency and recordkeeping 
                deemed necessary and appropriate by the Commission to 
                provide for efficient price discovery; prevention of 
                fraud, market manipulation, and excess speculation; and 
                compliance with title VII of the Clean Air Act and 
                section 610 of the Public Utility Regulatory Policies 
                Act of 1978;
                    ``(E) as necessary, ensure that position 
                limitations for individual market participants are 
                established with respect to each class of regulated 
                allowances;
                    ``(F) as necessary, ensure that margin requirements 
                are established for each class of regulated allowances;
                    ``(G) provide for the formation and operation of a 
                fair, orderly and liquid national market system that 
                allows for the best execution in the trading of 
                regulated allowances;
                    ``(H) limit or eliminate counterparty risks, market 
                power concentration risks, and other risks associated 
                with over-the-counter trading; and
                    ``(I) establish standards for qualification as, and 
                operation of, trading facilities for regulated 
                allowances;
                    ``(J) establish standards for qualification as, and 
                operation of, clearing organizations for trading 
                facilities for regulated allowances; and
                    ``(K) include such other requirements as necessary 
                to preserve market integrity and facilitate compliance 
                with title VII of the Clean Air Act and section 610 of 
                the Public Utility Regulatory Policies Act of 1978 and 
                the regulations promulgated under such title and such 
                section.
            ``(3) Enforcement.--
                    ``(A) In general.--If the Commission determines, 
                after notice and an opportunity for a hearing on the 
                record, that any entity has violated any rule or order 
                issued by the Commission under this subsection, the 
                Commission may issue an order--
                            ``(i) prohibiting the entity from trading 
                        on a trading facility for regulated allowances 
                        registered with the Commission, and requiring 
                        all such facilities to refuse the entity all 
                        privileges for such period as may be specified 
                        in the order;
                            ``(ii) if the entity is registered with the 
                        Commission in any capacity, suspending for a 
                        period of not more than 6 months, or revoking, 
                        the registration of the entity;
                            ``(iii) assessing the entity a civil 
                        penalty of not more than $1,000,000 per day per 
                        violation for as long as the violation 
                        continues (and in determining the amount of a 
                        civil penalty, the Commission shall take into 
                        account the nature and seriousness of the 
                        violation and the efforts to remedy the 
                        violation); and
                            ``(iv) requiring disgorgement of unjust 
                        profits, restitution to entities harmed by the 
                        violation as determined by the Commission, or 
                        both.
                    ``(B) Authority to suspend or revoke 
                registration.--The Commission may suspend for a period 
                of not more than 6 months, or revoke, the registration 
                of a trading facility for regulated allowances or of a 
                clearing organization registered by the Commission if, 
                after notice and opportunity for a hearing on the 
                record, the Commission finds that--
                            ``(i) the entity violated any rule or order 
                        issued by the Commission under this subsection; 
                        or
                            ``(ii) a director, officer, employee, or 
                        agent of the entity has violated any rule or 
                        order issued by the Commission under this 
                        subsection.
                    ``(C) Cease and desist proceedings.--
                            ``(i) In general.--If the Commission 
                        determines that any entity may be violating, 
                        may have violated, or may be about to violate 
                        any provision of this part, or any regulation 
                        promulgated by, or any restriction, condition, 
                        or order made or imposed by, the Commission 
                        under this Act, and if the Commission finds 
                        that the alleged violation or threatened 
                        violation, or the continuation of the 
                        violation, is likely to result in significant 
                        harm to covered entities or market 
                        participants, or significant harm to the public 
                        interest, the Commission may issue a temporary 
                        order requiring the entity--
                                    ``(I) to cease and desist from the 
                                violation or threatened violation;
                                    ``(II) to take such action as is 
                                necessary to prevent the violation or 
                                threatened violation; and
                                    ``(III) to prevent, as the 
                                Commission determines to be 
                                appropriate--
                                            ``(aa) significant harm to 
                                        covered entities or market 
                                        participants;
                                            ``(bb) significant harm to 
                                        the public interest; and
                                            ``(cc) frustration of the 
                                        ability of the Commission to 
                                        conduct the proceedings or to 
                                        redress the violation at the 
                                        conclusion of the proceedings.
                            ``(ii) Timing of entry.--An order issued 
                        under clause (i) shall be entered only after 
                        notice and opportunity for a hearing, unless 
                        the Commission determines that notice and 
                        hearing before entry would be impracticable or 
                        contrary to the public interest.
                            ``(iii) Effective date.--A temporary order 
                        issued under clause (i) shall--
                                    ``(I) become effective upon service 
                                upon the entity; and
                                    ``(II) unless set aside, limited, 
                                or suspended by the Commission or a 
                                court of competent jurisdiction, remain 
                                effective and enforceable pending the 
                                completion of the proceedings.
                    ``(D) Proceedings regarding dissipation or 
                conversion of assets.--
                            ``(i) In general.--In a proceeding 
                        involving an alleged violation of a regulation 
                        or order promulgated or issued by the 
                        Commission, if the Commission determines that 
                        the alleged violation or related circumstances 
                        are likely to result in significant dissipation 
                        or conversion of assets, the Commission may 
                        issue a temporary order requiring the 
                        respondent to take such action as is necessary 
                        to prevent the dissipation or conversion of 
                        assets.
                            ``(ii) Timing of entry.--An order issued 
                        under clause (i) shall be entered only after 
                        notice and opportunity for a hearing, unless 
                        the Commission determines that notice and 
                        hearing before entry would be impracticable or 
                        contrary to the public interest.
                            ``(iii) Effective date.--A temporary order 
                        issued under clause (i) shall--
                                    ``(I) become effective upon service 
                                upon the respondent; and
                                    ``(II) unless set aside, limited, 
                                or suspended by the Commission or a 
                                court of competent jurisdiction, remain 
                                effective and enforceable pending the 
                                completion of the proceedings.
                    ``(E) Review of temporary orders.--
                            ``(i) Application for review.--At any time 
                        after a respondent has been served with a 
                        temporary cease-and-desist order pursuant to 
                        subparagraph (C) or order regarding the 
                        dissipation or conversion of assets pursuant to 
                        subparagraph (D), the respondent may apply to 
                        the Commission to have the order set aside, 
                        limited, or suspended.
                            ``(ii) No prior hearing.--If a respondent 
                        has been served with a temporary order entered 
                        without a prior hearing of the Commission--
                                    ``(I) the respondent may, not later 
                                than 10 days after the date on which 
                                the order was served, request a hearing 
                                on the application; and
                                    ``(II) the Commission shall hold a 
                                hearing and render a decision on the 
                                application at the earliest practicable 
                                time.
                            ``(iii) Judicial review.--
                                    ``(I) In general.--An entity shall 
                                not be required to submit a request for 
                                rehearing of a temporary order before 
                                seeking judicial review in accordance 
                                with this subparagraph.
                                    ``(II) Timing of review.--Not later 
                                than 10 days after the date on which a 
                                respondent is served with a temporary 
                                cease-and-desist order entered with a 
                                prior hearing of the Commission, or 10 
                                days after the date on which the 
                                Commission renders a decision on an 
                                application and hearing under clause 
                                (i) with respect to any temporary order 
                                entered without such a prior hearing--
                                            ``(aa) the respondent may 
                                        obtain a review of the order in 
                                        a United States circuit court 
                                        having jurisdiction over the 
                                        circuit in which the respondent 
                                        resides or has a principal 
                                        place of business, or in the 
                                        United States Court of Appeals 
                                        for the District of Columbia 
                                        Circuit, for an order setting 
                                        aside, limiting, or suspending 
                                        the effectiveness or 
                                        enforcement of the order; and
                                            ``(bb) the court shall have 
                                        jurisdiction to enter such an 
                                        order.
                                    ``(III) No prior hearing.--A 
                                respondent served with a temporary 
                                order entered without a prior hearing 
                                of the Commission may not apply to the 
                                applicable court described in subclause 
                                (II) except after a hearing and 
                                decision by the Commission on the 
                                application of the respondent under 
                                clauses (i) and (ii).
                            ``(iv) Procedures.--Section 222 and Part 
                        III shall apply to--
                                    ``(I) an application for review of 
                                an order under clause (i); and
                                    ``(II) an order subject to review 
                                under clause (iii).
                            ``(v) No automatic stay of temporary 
                        order.--The commencement of proceedings under 
                        clause (iii) shall not, unless specifically 
                        ordered by the court, operate as a stay of the 
                        order of the Commission.
                    ``(F) Actions to collect civil penalties.--If any 
                person fails to pay a civil penalty assessed under this 
                subsection after an order assessing the penalty has 
                become final and unappealable, the Commission shall 
                bring an action to recover the amount of the penalty in 
                any appropriate United States district court.
            ``(4) Transaction fees.--
                    ``(A) In general.--The Commission shall, in 
                accordance with this paragraph, establish and collect 
                transaction fees designed to recover the costs to the 
                Federal Government of the supervision and regulation of 
                regulated allowance markets and market participants, 
                including related costs for enforcement activities, 
                policy and rulemaking activities, administration, legal 
                services, and international regulatory activities.
                    ``(B) Initial fee rate.--Each trading facility on 
                or through which regulated allowances are transacted 
                shall pay to the Commission a fee at a rate of not more 
                than $15 per $1,000,000 of the aggregate dollar amount 
                of sales of regulated allowances transacted through the 
                facility.
                    ``(C) Annual adjustment of fee rate.--The 
                Commission shall, on an annual basis--
                            ``(i) assess the rate at which fees are to 
                        be collected as necessary to meet the cost 
                        recovery requirement in subparagraph (A); and
                            ``(ii) consistent with subparagraph (B), 
                        adjust the rate as necessary in order to meet 
                        the requirement.
                    ``(D) Report on adequacy of fees in recovering 
                costs.--The Commission, shall, on an annual basis, 
                report to the Committee on Energy and Commerce of the 
                House of Representatives and the Committee on Energy 
                and Natural Resources of the Senate on the adequacy of 
                the transaction fees in providing funding for the 
                Commission to regulate the regulated allowance markets.
            ``(5) Judicial review.--Judicial review of actions taken by 
        the Commission under this subsection shall be pursuant to part 
        III.
            ``(6) Information-sharing.--Within 6 months after a Federal 
        agency with jurisdiction over regulated allowance derivatives 
        is delegated authority pursuant to subsection (c)(1), the 
        agency shall enter into a memorandum of understanding with the 
        Commission relating to information sharing, which shall include 
        provisions ensuring that information requests to markets within 
        the respective jurisdiction of the agency are properly 
        coordinated to facilitate, among other things, effective 
        information-sharing while minimizing duplicative information 
        requests, and provisions regarding the treatment of proprietary 
        information.
            ``(7) Additional employees report and appointment.--Within 
        18 months after the date of the enactment of this section, the 
        Commission shall submit to the President, the Committee on 
        Energy and Commerce of the House of Representatives, and the 
        Committee on Energy and Natural Resources of the Senate, a 
        report that contains recommendations as to how many additional 
        employees would be necessary to provide robust oversight and 
        enforcement of the regulations promulgated under this 
        subsection. As soon as practicable after the completion of the 
        report, subject to appropriations, the Commission shall appoint 
        the recommended number of additional employees for such 
        purposes.
    ``(c) Delegation of Authority by the President.--
            ``(1) Delegation.--The President, taking into consideration 
        the recommendations of the interagency working group 
        established in subsection (d), shall delegate to members of the 
        working group and the heads of other appropriate Federal 
        agencies the authority to promulgate regulations for the 
        establishment, operation, and oversight of all markets for 
        regulated allowance derivatives.
            ``(2) Regulations.--The regulations promulgated pursuant to 
        paragraph (1) shall--
                    ``(A) provide for effective and comprehensive 
                market oversight;
                    ``(B) prohibit fraud, market manipulation, and 
                excess speculation, and provide measures to limit 
                unreasonable fluctuation in the prices of regulated 
                allowance derivatives;
                    ``(C) facilitate compliance with title VII of the 
                Clean Air Act by covered entities;
                    ``(D) ensure market transparency and recordkeeping 
                necessary to provide for efficient price discovery; 
                prevention of fraud, market manipulation, and excess 
                speculation; and compliance with title VII of the Clean 
                Air Act and section 610 of the Public Utility 
                Regulatory Policies Act of 1978;
                    ``(E) ensure that position limitations for 
                individual market participants are established with 
                respect to each regulated allowance derivative and 
                aggregate position limitations for individual market 
                participants are established with respect to all 
                regulated allowance derivative markets;
                    ``(F) ensure that margin requirements are 
                established for each regulated allowance derivative;
                    ``(G) provide for the formation and operation of a 
                market system that allows for best execution in the 
                trading of regulated allowance derivatives;
                    ``(H) to the extent the regulations deviate from 
                the rule set forth in paragraph (4)(B), limit or 
                eliminate counterparty risks, market power 
                concentration risks, and other risks associated with 
                over-the-counter trading, and promulgate reporting and 
                market transparency rules for large traders;
                    ``(I) ensure that market participants do not evade 
                position limits or otherwise undermine the integrity 
                and effectiveness of the regulations promulgated under 
                subparagraph (C) through participation in markets not 
                subject to the position limits and regulations;
                    ``(J) establish standards, as necessary, for 
                qualification as, and operation of, trading facilities 
                for regulated allowance derivatives;
                    ``(K) establish standards, as necessary, for 
                qualification as, and operation of, clearing 
                organizations for trading facilities for regulated 
                allowance derivatives;
                    ``(L) provide boards of trade designated as 
                contract markets under the Commodity Exchange Act, and 
                market participants, with an adequate transition period 
                for compliance with any new regulatory requirements 
                established under this paragraph;
                    ``(M) determine whether and to what extent offset 
                creation contracts, to the extent incorporating 
                regulated allowance derivatives, should be governed by 
                the same regulations that apply to other regulated 
                allowance derivatives; and
                    ``(N) include such other requirements as necessary 
                to preserve market integrity and facilitate compliance 
                with title VII of the Clean Air Act and section 610 of 
                the Public Utility Regulatory Policies Act of 1978 and 
                the regulations promulgated under such title and such 
                section.
            ``(3) Deadline.--The agencies authorized to promulgate 
        regulations for the establishment, operation, and oversight of 
        markets for regulated allowance derivatives pursuant to 
        paragraph (1) shall promulgate such regulations not later than 
        18 months after the date of the enactment of this section, and 
        from time to time thereafter as may be appropriate.
            ``(4) Default rules.--
                    ``(A) An individual market participant, directly or 
                in concert with another participant, shall not control 
                more than 10 percent of the open interest in any 
                regulated allowance derivative.
                    ``(B) All contracts for the purchase or sale of any 
                regulated allowance derivative shall be executed on or 
                through a board of trade designated as a contract 
                market under the Commodity Exchange Act.
                    ``(C) To the extent that regulations promulgated 
                under this subsection provide different rules with 
                respect to the matters described in subparagraph (A) or 
                (B), the regulations shall supersede subparagraph (A) 
                or (B), as the case may be.
    ``(d) Working Group.--
            ``(1) Establishment.--Not later than 30 days after the date 
        of the enactment of this section, the President shall establish 
        an interagency working group on carbon market oversight, which 
        shall include the Administrator of the Environmental Protection 
        Agency and representatives of other relevant agencies, to make 
        recommendations to the President regarding proposed regulations 
        for the establishment, operation, and oversight of markets for 
        regulated allowance derivatives.
            ``(2) Report.--Not later than 180 days after the date of 
        the enactment of this section, and biennially thereafter, the 
        interagency working group shall submit a written report to the 
        President and Congress that includes its recommendations to the 
        President regarding proposed regulations for the establishment, 
        operation, and oversight of markets for regulated allowance 
        derivatives and any recommendations to Congress for statutory 
        changes needed to ensure the establishment, operation, and 
        oversight of transparent, fair, stable, and efficient markets 
        for regulated allowance derivatives.
    ``(e) Enforcement of Regulations.--Each Federal agency that 
promulgates under subsection (c) a regulation of conduct with respect 
to a regulated allowance derivative shall have the same authority to 
enforce compliance with the regulation as the Commodity Futures Trading 
Commission has to enforce compliance with any regulation of similar 
conduct with respect to a contract, agreement, or transaction over 
which the Commodity Futures Trading Commission has jurisdiction, except 
that any enforcement by the Federal Energy Regulatory Commission shall 
be pursuant to section 222 and Part III.
    ``(f) Penalty for Fraud and False or Misleading Statements.--A 
person convicted under section 1041 of title 18, United States Code, 
may be prohibited from holding or trading regulated allowances for a 
period of not more than 5 years pursuant to the regulations promulgated 
under this section, except that, if the person is a covered entity, the 
person shall be allowed to hold sufficient regulated allowances to meet 
its compliance obligations.
    ``(g) Relation to State Law.--Nothing in this section shall 
preclude, diminish or qualify any authority of a State or political 
subdivision thereof to adopt or enforce any unfair competition, 
antitrust, consumer protection, securities, commodities or any other 
law or regulation, except that no such State law or regulation may 
relieve any person of any requirement otherwise applicable under this 
section.
    ``(h) Market Reports.--
            ``(1) Collection and analysis of information.--The 
        Commission, in conjunction with the Federal agency with 
        jurisdiction over regulated allowance derivatives pursuant to 
        subsection (c)(1), shall, on a continuous basis, collect and 
        analyze the following information on the functioning of the 
        markets for regulated instruments established under this part:
                    ``(A) The status of, and trends in, the markets, 
                including prices, trading volumes, transaction types, 
                and trading channels and mechanisms.
                    ``(B) Spikes, collapses, and volatility in prices 
                of regulated instruments, and the causes therefor.
                    ``(C) The relationship between the market for 
                regulated allowances and allowance derivatives, and the 
                spot and futures markets for energy commodities, 
                including electricity.
                    ``(D) Evidence of fraud or manipulation in any such 
                market, the effects on any such market of any such 
                fraud or manipulation (or threat of fraud or 
                manipulation) that the Commission, in conjunction with 
                the Federal agency, has identified, and the 
                effectiveness of corrective measures undertaken by the 
                Commission, in conjunction with the Federal agency, to 
                address the fraud, manipulation, or threat.
                    ``(E) The economic effects of the markets, 
                including to macro- and micro-economic effects of 
                unexpected significant increases and decreases in the 
                price of regulated instruments.
                    ``(F) Any changes in the roles, activities, or 
                strategies of various market participants.
                    ``(G) Regional, industrial, and consumer responses 
                to the markets, and energy investment responses to the 
                markets.
                    ``(H) Any other issue related to the markets that 
                the Commission, in conjunction with the entities, deems 
                appropriate.
            ``(2) Annual reports to the congress.-- Not later than 1 
        month after the end of each calendar year, the Commission, in 
        conjunction with the Federal agency, shall submit to the 
        President, the Committee on Energy and Commerce of the House of 
        Representatives, and the Committee on Energy and Natural 
        Resources of the Senate, and make available to the public, a 
        report on the matters described in paragraph (1) with respect 
        to the year, including recommendations for any administrative 
        or statutory measures the Commission, in conjunction with the 
        Federal agency, considers necessary to address any threats to 
        the transparency, fairness, or integrity of the markets in 
        regulated instruments.

``SEC. 402. APPLICABILITY OF PART III PROVISIONS.

    ``(a) Sections 301, 304, and 306.--Sections 301, 304, and 306 shall 
not apply to this part.
    ``(b) Sections 307, 309, and 314.--Sections 307, 309, and 314 shall 
only apply to section 401(c) to the extent that the Commission is 
delegated authority to promulgate regulations for the establishment, 
operation, and oversight of markets for regulated allowance derivatives 
(as defined in section 401). If the Commission is not delegated 
authority to promulgate regulations for the establishment, operation, 
and oversight of markets for regulated allowance derivatives, sections 
307, 309, and 314 shall not apply to section 401(f) in the case of 
regulated allowance derivatives.
    ``(c) Section 315.--In applying section 315(a) to this part, the 
words ``person or entity'' shall be substituted for the words 
``licensee or public utility''. In applying section 315(b) to this 
part, the words ``an entity'' shall be substituted for the words ``a 
licensee or public utility'' and the words ``such entity'' shall be 
substituted for the words ``such licensee or public utility.''
    ``(d) Section 316.--Section 316(a) shall not apply to section 
401(f).''.
    (b) Criminal Prohibition Against Fraud and False or Misleading 
Statements.--
            (1) Chapter 47 of title 18, United States Code, is amended 
        by adding at the end the following:
``Sec. 1041. Fraud and false statements in connection with regulated 
              allowances
    ``Whoever in connection with a transaction involving a regulated 
allowance (as defined in section 401(a) of the Federal Power Act, as 
added by section 341 of the American Clean Energy and Security Act of 
2009), knowingly--
            ``(1) makes or uses a materially false or misleading 
        statement, writing, representation, scheme, or device; or
            ``(2) falsifies, conceals, or covers up by any trick, 
        scheme, or device any material fact,
shall be fined not more than $5,000,000 (or $25,000,000 in the case of 
an organization) or imprisoned not more than 20 years, or both.''.
            (2) The table of sections at the beginning of chapter 47 of 
        title 18, United States Code, is amended by adding at the end 
        the following new item:

``1041. Fraud and false statements in connection with regulated 
                            allowances.''.

                Subtitle E--Additional Market Assurance

SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DERIVATIVES INVOLVING 
              ENERGY COMMODITIES.

    (a) Energy Commodity Defined.--Section 1a of the Commodity Exchange 
Act (7 U.S.C. 1a) is amended--
            (1) in paragraph (14), by inserting ``, an energy 
        commodity,'' after ``excluded commodity'';
            (2) by redesignating paragraphs (13) through (21) and 
        paragraphs (22) through (34) as paragraphs (14) through (22) 
        and paragraphs (24) through (36), respectively;
            (3) by inserting after paragraph (12) the following:
            ``(13) Energy commodity.--The term `energy commodity' 
        means--
                    ``(A) coal;
                    ``(B) crude oil, gasoline, diesel fuel, jet fuel, 
                heating oil, and propane;
                    ``(C) electricity (excluding financial transmission 
                rights which are subject to regulation and oversight by 
                the Federal Energy Regulatory Commission);
                    ``(D) natural gas; and
                    ``(E) any other substance (other than an excluded 
                commodity, a metal, or an agricultural commodity) that 
                is used as a source of energy, as the Commission, in 
                its discretion, deems appropriate.''; and
            (4) by inserting after paragraph (22) (as so redesignated 
        by paragraph (2) of this subsection) the following:
            ``(23) Included energy transaction.--The term `included 
        energy transaction' means a contract, agreement, or transaction 
        in an energy commodity for future delivery that provides for a 
        delivery point of the energy commodity in the United States or 
        a territory or possession of the United States, or that is 
        offered or transacted on or through a computer terminal located 
        in the United States.''.
    (b) Extension of Regulatory Authority to Swaps Involving Energy 
Transactions.--Section 2(g) of such Act (7 U.S.C. 2(g)) is amended by 
inserting ``or an energy commodity'' after ``agricultural commodity''.
    (c) Elimination of Exemption for Over-the-counter Swaps Involving 
Energy Commodities.--Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is 
amended by inserting ``(other than an energy commodity)'' after 
``exempt commodity''.
    (d) Extension of Regulatory Authority to Included Energy 
Transactions on Foreign Boards of Trade.--Section 4 of such Act (7 
U.S.C. 6) is amended--
            (1) in subsection (a), by inserting ``, and which is not an 
        included energy transaction'' after ``territories or 
        possessions'' the 2nd place it appears; and
            (2) in subsection (b), by adding at the end the following: 
        ``The preceding sentence shall not apply with respect to 
        included energy transactions.''.
    (e) Limitation of General Exemptive Authority of the CFTC With 
Respect to Included Energy Transactions.--
            (1) In general.--Section 4(c) of such Act (7 U.S.C. 6(c)) 
        is amended by adding at the end the following:
    ``(6) The Commission may not exempt any included energy transaction 
from the requirements of subsection (a), unless the Commission provides 
60 days advance notice to the Congress and the Position Limit Energy 
Advisory Group and solicits public comment about the exemption request 
and any proposed Commission action.''.
            (2) Nullification of no-action letter exemptions to certain 
        requirements applicable to included energy transactions.--
        Beginning 180 days after the date of the enactment of this Act, 
        any exemption provided by the Commodity Futures Trading 
        Commission that has allowed included energy transactions (as 
        defined in section 1a(13) of the Commodity Exchange Act) to be 
        conducted without regard to the requirements of section 4(a) of 
        such Act shall be null and void.
    (f) Requirement to Establish Uniform Speculative Position Limits 
for Energy Transactions.--
            (1) In general.--Section 4a(a) of such Act (7 U.S.C. 6a(a)) 
        is amended--
                    (A) by inserting ``(1)'' after ``(a)'';
                    (B) by inserting after the 2nd sentence the 
                following: ``With respect to energy transactions, the 
                Commission shall fix limits on the aggregate number of 
                positions which may be held by any person for each 
                month across all markets subject to the jurisdiction of 
                the Commission.'';
                    (C) in the 4th sentence by inserting ``, consistent 
                with the 3rd sentence,'' after ``Commission''; and
                    (D) by adding after and below the end the 
                following:
    ``(2)(A) Not later than 60 days after the date of the enactment of 
this paragraph, the Commission shall convene a Position Limit Energy 
Advisory Group consisting of representatives from--
            ``(i) 7 predominantly commercial short hedgers of the 
        actual energy commodity for future delivery;
            ``(ii) 7 predominantly commercial long hedgers of the 
        actual energy commodity for future delivery;
            ``(iii) 4 non-commercial participants in markets for energy 
        commodities for future delivery; and
            ``(iv) each designated contract market or derivatives 
        transaction execution facility upon which a contract in the 
        energy commodity for future delivery is traded, and each 
        electronic trading facility that has a significant price 
        discovery contract in the energy commodity.
    ``(B) Not later than 60 days after the date on which the advisory 
group is convened under subparagraph (A), and annually thereafter, the 
advisory group shall submit to the Commission advisory recommendations 
regarding the position limits to be established in paragraph (1).
    ``(C) The Commission shall have exclusive authority to grant 
exemptions for bona fide hedging transactions and positions from 
position limits imposed under this Act on energy transactions.''.
            (2) Conforming amendments.--
                    (A) Significant price discovery contracts.--Section 
                2(h)(7) of such Act (7 U.S.C. 2(h)(7)) is amended--
                            (i) in subparagraph (A)--
                                    (I) by inserting ``of this 
                                paragraph and section 4a(a)'' after 
                                ``(B) through (D)''; and
                                    (II) by inserting ``of this 
                                paragraph'' before the period; and
                            (ii) in subparagraph (C)(ii)(IV)--
                                    (I) in the heading, by striking 
                                ``limitations or''; and
                                    (II) by striking ``position 
                                limitations or''.
                    (B) Contracts traded on or through designated 
                contract markets.--Section 5(d)(5) of such Act (7 
                U.S.C. 7(d)(5)) is amended--
                            (i) in the heading by striking 
                        ``limitations or''; and
                            (ii) by striking ``position limitations 
                        or''.
                    (C) Contracts traded on or through derivatives 
                transaction execution facilities.--Section 5a(d)(4) of 
                such Act (7 U.S.C. 7a(d)(4)) is amended--
                            (i) in the heading by striking 
                        ``limitations or''; and
                            (ii) by striking ``position limits or''.
    (g) Elimination of the Swaps Loophole.--Section 4a(c) of such Act 
(7 U.S.C. 6a(c)) is amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding after and below the end the following:
    ``(2) For the purposes of contracts of sale for future delivery and 
options on such contracts or commodities, the Commission shall define 
what constitutes a bona fide hedging transaction or position as a 
transaction or position that--
            ``(A)(i) represents a substitute for transactions made or 
        to be made or positions taken or to be taken at a later time in 
        a physical marketing channel;
            ``(ii) is economically appropriate to the reduction of 
        risks in the conduct and management of a commercial enterprise; 
        and
            ``(iii) arises from the potential change in the value of--
                    ``(I) assets that a person owns, produces, 
                manufactures, processes, or merchandises or anticipates 
                owning, producing, manufacturing, processing, or 
                merchandising;
                    ``(II) liabilities that a person owns or 
                anticipates incurring; or
                    ``(III) services that a person provides, purchases, 
                or anticipates providing or purchasing; or
            ``(B) reduces risks attendant to a position resulting from 
        a transaction that--
                    ``(i) was executed pursuant to subsection (d), (g), 
                (h)(1), or (h)(2) of section 2, or an exemption issued 
                by the Commission by rule, regulation or order; and
                    ``(ii) was executed opposite a counterparty for 
                which the transaction would qualify as a bona fide 
                hedging transaction pursuant to paragraph (2)(A) of 
                this subsection.''.
    (h) Detailed Reporting and Disaggregation of Market Data.--Section 
4 of such Act (7 U.S.C. 6) is amended by adding at the end the 
following:
    ``(e) Detailed Reporting and Disaggregation of Market Data.--
            ``(1) Index traders and swap dealers reporting.--The 
        Commission shall issue a proposed rule defining and classifying 
        index traders and swap dealers (as those terms are defined by 
        the Commission) for purposes of data reporting requirements and 
        setting routine detailed reporting requirements for any 
        positions of such entities in contracts traded on designated 
        contract markets, over-the-counter markets, derivatives 
        transaction execution facilities, foreign boards of trade 
        subject to section 4(f), and electronic trading facilities with 
        respect to significant price discovery contracts not later than 
        120 days after the date of the enactment of this subsection, 
        and issue a final rule within 180 days after such date of 
        enactment.
            ``(2) Disaggregation of index funds and other data in 
        markets.--Subject to section 8 and beginning within 60 days of 
        the issuance of the final rule required by paragraph (1), the 
        Commission shall disaggregate and make public weekly--
                    ``(A) the number of positions and total notional 
                value of index funds and other passive, long-only and 
                short-only positions (as defined by the Commission) in 
                all markets to the extent such information is 
                available; and
                    ``(B) data on speculative positions relative to 
                bona fide physical hedgers in those markets to the 
                extent such information is available.
            ``(3) Disclosure of identity of holders of positions in 
        indexes in excess of position limits.--The Commission shall 
        include in its weekly Commitment of Trader reports the identity 
        of each person who holds a position in an index in excess of a 
        limit imposed under section 4i.''.
    (i) Authority to Set Limits to Prevent Excessive Speculation in 
Indexes.--
            (1) In general.--Section 4a of such Act (7 U.S.C. 6a) is 
        amended by adding at the end the following:
    ``(f) The provisions of this section shall apply to the amounts of 
trading which may be done or positions which may be held by any person 
under contracts of sale of an index for future delivery on or subject 
to the rules of any contract market, derivatives transaction execution 
facility, or over-the-counter market, or on an electronic trading 
facility with respect to a significant price discovery contract, in the 
same manner in which this section applies to contracts of sale of a 
commodity for future delivery.''.
            (2) Regulations.--The Commodity Futures Trading Commission 
        shall issue regulations under section 4a(f) of the Commodity 
        Exchange Act within 180 days after the date of the enactment of 
        this Act.

SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL ENERGY REGULATORY 
              COMMISSION.

    Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by 
adding at the end the following:.
    ``(j) This Act shall not be interpreted to affect the jurisdiction 
of the Federal Energy Regulatory Commission with respect to the 
authority of the Federal Energy Regulatory Commission under the Federal 
Power Act (16 U.S.C. 791a et seq.), the Natural Gas Act (15 U.S.C. 717 
et seq.), or other law to obtain information, carry out enforcement 
actions, or otherwise carry out the responsibilities of the Federal 
Energy Regulatory Commission.''.

SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FUTURES TRADING 
              COMMISSION.

    (a) Elevation of Office.--
            (1) Inclusion of cftc in definition of establishment.--
                    (A) Section 12(1) of the Inspector General Act of 
                1978 (5 U.S.C. App.) is amended by striking ``or the 
                Federal Cochairpersons of the Commissions established 
                under section 15301 of title 40, United States Code;'' 
                and inserting ``the Federal Cochairpersons of the 
                Commissions established under section 15301 of title 
                40, United States Code; or the Chairman of the 
                Commodity Futures Trading Commission;''.
                    (B) Section 12(2) of the Inspector General Act of 
                1978 (5 U.S.C. App.) is amended by striking ``or the 
                Commissions established under section 15301 of title 
                40, United States Code,'' and inserting ``the 
                Commissions established under section 15301 of title 
                40, United States Code, or the Commodity Futures 
                Trading Commission,''.
            (2) Exclusion of cftc from definition of designated federal 
        entity.--Section 8G(a)(2) of the Inspector General Act of 1978 
        (5 U.S.C. App.) is amended by striking ``the Commodity Futures 
        Trading Commission,''.
    (b) Provisions Relating to Pay and Personnel Authority.--
            (1) Provision relating to the position of inspector general 
        of the cftc.--In the case of the Inspector General of the 
        Commodities Futures Trading Commission, subsections (b) and (c) 
        of section 4 of the Inspector General Reform Act of 2008 
        (Public Law 110-409) shall apply in the same manner as if the 
        Commission was a designated Federal entity under section 8G. 
        The Inspector General of the Commodities Futures Trading 
        Commission shall not be subject to section 3(e) of such Act.
            (2) Provision relating to other personnel.--Notwithstanding 
        paragraphs (7) and (8) of section 6(a) of the Inspector General 
        Act of 1978 (5 U.S.C. App.), the Inspector General of the 
        Commodities Futures Trading Commission may select, appoint, and 
        employ such officers and employees as may be necessary for 
        carrying out the functions, powers, and duties of the Office of 
        Inspector General and to obtain the temporary or intermittent 
        services of experts or consultants or an organization of 
        experts or consultants, subject to the applicable laws and 
        regulations that govern such selections, appointments, and 
        employment, and the obtaining of such services, within the 
        Commodities Futures Trading Commission.
    (c) Effective Date; Transition Rule.--
            (1) Effective date.--The amendments made by this section 
        shall take effect 30 days after the date of the enactment of 
        this Act.
            (2) Transition rule.--An individual serving as Inspector 
        General of the Commodity Futures Trading Commission on the 
        effective date of this section pursuant to an appointment made 
        under section 8G of the Inspector General Act of 1978 (5 U.S.C. 
        App.)--
                    (A) may continue so serving until the President 
                makes an appointment under section 3(a) of such Act 
                consistent with the amendments made by this section; 
                and
                    (B) shall, while serving under subparagraph (A), 
                remain subject to the provisions of section 8G of such 
                Act which apply with respect to the Commodity Futures 
                Trading Commission.

SEC. 354. SETTLEMENT AND CLEARING THROUGH REGISTERED DERIVATIVES 
              CLEARING ORGANIZATIONS.

    (a) In General.--
            (1) Application to excluded derivative transactions.--
                    (A) Section 2(d)(1) of the Commodity Exchange Act 
                (7 U.S.C. 2(d)(1)) is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(C) except as provided in section 4(f), the 
                agreement, contract, or transaction is settled and 
                cleared through a derivatives clearing organization 
                registered with the Commission.''.
                    (B) Section 2(d)(2) of such Act (7 U.S.C. 2(d)(2)) 
                is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (B);
                            (ii) by striking the period at the end of 
                        subparagraph (C) and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(D) except as provided in section 4(f), the 
                agreement, contract, or transaction is settled and 
                cleared through a derivatives clearing organization 
                registered with the Commission.''.
            (2) Application to certain swap transactions.--Section 2(g) 
        of such Act (7 U.S.C. 2(g)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (2);
                    (B) by striking the period at the end of paragraph 
                (3) and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(4) except as provided in section 4(f), settled and 
        cleared through a derivatives clearing organization registered 
        with the Commission.''.
            (3) Application to certain transactions in exempt 
        commodities.--
                    (A) Section 2(h)(1) of such Act ( 7 U.S.C. 2(h)(1)) 
                is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(C) except as provided in section 4(f), is 
                settled and cleared through a derivatives clearing 
                organization registered with the Commission.''.
                    (B) Section 2(h)(3) of such Act (7 U.S.C. 2(h)(3)) 
                is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(C) except as provided in section 4(f), settled 
                and cleared through a derivatives clearing organization 
                registered with the Commission.''.
            (4) General exemptive authority.--Section 4(c)(1) of such 
        Act (7 U.S.C. 6(c)(1)) is amended by inserting ``the agreement, 
        contract, or transaction, except as provided in section 4(h), 
        will be settled and cleared through a derivatives clearing 
        organization registered with the Commission and'' before ``the 
        Commission determines''.
            (5) Conforming amendment relating to significant price 
        discovery contracts.--Section 2(h)(7)(D) of such Act (7 U.S.C. 
        2(h)(7)(D)) is amended by striking the designation and heading 
        for the subparagraph and all that follows through ``As part 
        of'' and inserting the following:
                    ``(D) Review of implementation.--As part of''.
    (b) Alternatives to Clearing Through Designated Clearing 
Organizations.--Section 4 of such Act (7 U.S.C. 6), as amended by 
section 351(h) of this Act, is amended by adding at the end the 
following:
    ``(f) Alternatives to Clearing Through Designated Clearing 
Organizations.--
            ``(1) Settlement and clearing through certain other 
        regulated entities.--An agreement, contract, or transaction, or 
        class thereof, relating to an excluded commodity, that would 
        otherwise be required to be settled and cleared by section 
        2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of 
        this Act, or subsection (c)(1) of this section may be settled 
        and cleared through an entity listed in subsections (a) or (b) 
        of section 409 of the Federal Deposit Insurance Corporation 
        Improvement Act of 1991.
            ``(2) Waiver of clearing requirement.--
                    ``(A) The Commission, in its discretion, may exempt 
                an agreement, contract, or transaction, or class 
                thereof, that would otherwise be required by section 
                2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 
                2(h)(3)(C) of this Act, or subsection (c)(1) of this 
                section to be settled and cleared through a derivatives 
                clearing organization registered with the Commission 
                from such requirement.
                    ``(B) In granting exemptions pursuant to 
                subparagraph (A), the Commission shall consult with the 
                Securities and Exchange Commission and the Board of 
                Governors of the Federal Reserve System regarding 
                exemptions that relate to excluded commodities or 
                entities for which the Securities Exchange Commission 
                or the Board of Governors of the Federal Reserve System 
                serve as the primary regulator.
                    ``(C) Before granting an exemption pursuant to 
                subparagraph (A), the Commission shall find that the 
                agreement, contract, or transaction, or class thereof--
                            ``(i) is highly customized as to its 
                        material terms and conditions;
                            ``(ii) is transacted infrequently;
                            ``(iii) does not serve a significant price-
                        discovery function in the marketplace; and
                            ``(iv) is being entered into by parties who 
                        can demonstrate the financial integrity of the 
                        agreement, contract, or transaction and their 
                        own financial integrity, as such terms and 
                        standards are determined by the Commission. The 
                        standards may include, with respect to any 
                        federally regulated financial entity for which 
                        net capital requirements are imposed, a net 
                        capital requirement associated with any 
                        agreement, contract, or transaction subject to 
                        an exemption from the clearing requirement that 
                        is higher than the net capital requirement that 
                        would be associated with such a transaction 
                        were it cleared
                    ``(D) Any agreement, contract, or transaction, or 
                class thereof, which is exempted pursuant to 
                subparagraph (A) shall be reported to the Commission in 
                a manner designated by the Commission, or to such other 
                entity the Commission deems appropriate.
                    ``(E) The Commission, the Securities and Exchange 
                Commission and the Board of Governors of the Federal 
                Reserve System shall enter into a memorandum of 
                understanding by which the information reported to the 
                Commission pursuant to subparagraph (D) with regard to 
                excluded commodities or entities for which the 
                Securities Exchange Commission or the Board of 
                Governors of the Federal Reserve System serve as the 
                primary regulator may be provided to the other 
                agencies.
    ``(g) Spot and Forward Exclusion.--The settlement and clearing 
requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 
2(h)(3)(C), or 4(c)(1) shall not apply to an agreement, contract, or 
transaction of any cash commodity for immediate or deferred shipment or 
delivery, as defined by the Commission.''.
    (c) Additional Requirements Applicable to Applicants for 
Registration as a Derivative Clearing Organization.--Section 5b(c)(2) 
of such Act (7 U.S.C. 7a-1(c)(2)) is amended by adding at the end the 
following:
                    ``(O) Disclosure of general information.--The 
                applicant shall disclose publicly and to the Commission 
                information concerning--
                            ``(i) the terms and conditions of 
                        contracts, agreements, and transactions cleared 
                        and settled by the applicant;
                            ``(ii) the conventions, mechanisms, and 
                        practices applicable to the contracts, 
                        agreements, and transactions;
                            ``(iii) the margin-setting methodology and 
                        the size and composition of the financial 
                        resource package of the applicant; and
                            ``(iv) other information relevant to 
                        participation in the settlement and clearing 
                        activities of the applicant.
                    ``(P) Daily publication of trading information.--
                The applicant shall make public daily information on 
                settlement prices, volume, and open interest for 
                contracts settled or cleared pursuant to the 
                requirements of section 2(d)(1)(C), 2(d)(2)(D), 
                2(g)(4), 2(h)(1)(C), 2(h)(3)(C) or 4(c)(1) of this Act 
                by the applicant if the Commission determines that the 
                contracts perform a significant price discovery 
                function for transactions in the cash market for the 
                commodity underlying the contracts.
                    ``(Q) Fitness standards.--The applicant shall 
                establish and enforce appropriate fitness standards for 
                directors, members of any disciplinary committee, and 
                members of the applicant, and any other persons with 
                direct access to the settlement or clearing activities 
                of the applicant, including any parties affiliated with 
                any of the persons described in this subparagraph.''.
    (d) Amendments.--
            (1) Section 409 of the Federal Deposit Insurance 
        Corporation Improvement Act of 1991 (12 U.S.C. 4422) is amended 
        by adding at the end the following:
    ``(c) Clearing Requirement.--A multilateral clearing organization 
described in subsections (a) or (b) of this section shall comply with 
requirements similar to the requirements of sections 5b and 5c of the 
Commodity Exchange Act.''.
            (2) Section 407 of the Legal Certainty for Bank Products 
        Act of 2000 (7 U.S.C. 27e) is amended by inserting ``and the 
        settlement and clearing requirements of sections 2(d)(1)(C), 
        2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of 
        such Act'' after ``the clearing of covered swap agreements''.
    (e) Effective Date.--The amendments made by this section shall take 
effect 150 days after the date of the enactment of this Act.
    (f) Transition Rule.--Any agreement, contract, or transaction 
entered into before the date of the enactment of this Act or within 150 
days after such date of enactment, in reliance on subsection (d), (g), 
(h)(1), or (h)(3) of section 2 of the Commodity Exchange Act or any 
other exemption issued by the Commission Futures Trading Commission by 
rule, regulation, or order shall, within 90 days after such date of 
enactment, unless settled and cleared through an entity registered with 
the Commission as a derivatives clearing organization or another 
clearing entity pursuant to section 4(f) of such Act, be reported to 
the Commission in a manner designated by the Commission, or to such 
other entity as the Commission deems appropriate.

SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A CREDIT DEFAULT SWAP.

    (a) In General.--Section 4c of the Commodity Exchange Act (7 U.S.C. 
6c) is amended by adding at the end the following:
    ``(h) Limitation on Eligibility to Purchase a Credit Default 
Swap.--It shall be unlawful for any person to enter into a credit 
default swap unless the person--
            ``(1) owns a credit instrument which is insured by the 
        credit default swap;
            ``(2) would experience financial loss if an event that is 
        the subject of the credit default swap occurs with respect to 
        the credit instrument; and
            ``(3) meets such minimum capital adequacy standards as may 
        be established by the Commission, in consultation with the 
        Board of Governors of the Federal Reserve System, or such more 
        stringent minimum capital adequacy standards as may be 
        established by or under the law of any State in which the swap 
        is originated or entered into, or in which possession of the 
        contract involved takes place.''.
    (b) Elimination of Preemption of State Bucketing Laws Regarding 
Naked Credit Default Swaps.--Section 12(e)(2)(B) of such Act (7 U.S.C. 
16(e)(2)(B)) is amended by inserting ``(other than a credit default 
swap in which the purchaser of the swap would not experience financial 
loss if an event that is the subject of the swap occurred)'' before 
``that is excluded''.
    (c) Definition of Credit Default Swap.--Section 1a of such Act (7 
U.S.C. 1a), as amended by section 351(a) of this Act, is amended by 
adding at the end the following:
            ``(37) Credit default swap.--The term `credit default swap' 
        means a contract which insures a party to the contract against 
        the risk that an entity may experience a loss of value as a 
        result of an event specified in the contract, such as a default 
        or credit downgrade. A credit default swap that is traded on or 
        cleared by a registered entity shall be excluded from the 
        definition of a security as defined in this Act and in section 
        2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of 
        the Securities Exchange Act of 1934, except it shall be deemed 
        a security solely for purpose of enforcing prohibitions against 
        insider trading in sections 10 and 16 of the Securities 
        Exchange Act of 1934.''.
    (d) Effective Date.--The amendments made by this section shall be 
effective for credit default swaps (as defined in section 1a(37) of the 
Commodity Exchange Act) entered into after 60 days after the date of 
the enactment of this section.

SEC. 356. TRANSACTION FEES.

    (a) In General.--Section 12 of the Commodity Exchange Act (7 U.S.C. 
16) is amended by redesignating subsections (e), (f), and (g) as 
subsections (f), (g), and (h), respectively, and inserting after 
subsection (d) the following:
    ``(e) Clearing Fees.--
            ``(1) In general.--The Commission shall, in accordance with 
        this subsection, charge and collect from each registered 
        clearing organization, and each such organization shall pay to 
        the Commission, transaction fees at a rate calculated to 
        recover the costs to the Federal Government of the supervision 
        and regulation of futures markets, except those directly 
        related to enforcement.
            ``(2) Fees assessed per side of cleared contracts.--
                    ``(A) In general.--The Commission shall determine 
                the fee rate referred to in paragraph (1), and shall 
                apply the fee rate per side of any transaction cleared.
                    ``(B) Authority to delegate.-- The Commission may 
                determine the procedures by which the fee rate is to be 
                applied on the transactions subject to the fee, or 
                delegate the authority to make the determination to any 
                appropriate derivatives clearing organization.
            ``(3) Exemptions.--The Commission may not impose a fee 
        under paragraph (1) on--
                    ``(A) a class of contracts or transactions if the 
                Commission finds that it is in the public interest to 
                exempt the class from the fee; or
                    ``(B) a contract or transaction cleared by a 
                registered derivatives clearing organization that is--
                            ``(i) subject to fees under section 31 of 
                        the Securities Exchange Act of 1934; or
                            ``(ii) a security as defined in the 
                        Securities Act of 1933 or the Securities 
                        Exchange Act of 1934.
            ``(4) Dates for payment of fees.--The fees imposed under 
        paragraph (1) shall be paid on or before--
                    ``(A) March 15 of each year, with respect to 
                transactions occurring on or after the preceding 
                September 1 and on or before the preceding December 31; 
                and
                    ``(B) September 15 of each year, with respect to 
                transactions occurring on or after the preceding 
                January 1 and on or before the preceding August 31.
            ``(5) Annual adjustment of fee rates.--
                    ``(A) In general.--Not later than April 30 of each 
                fiscal year , the Commission shall, by order, adjust 
                each fee rate determined under paragraph (2) for the 
                fiscal year to a uniform adjusted rate that, when 
                applied to the estimated aggregate number of cleared 
                sides of transactions for the fiscal year, is 
                reasonably likely to produce aggregate fee receipts 
                under this subsection for the fiscal year equal to the 
                target offsetting receipt amount for the fiscal year.
                    ``(B) Definitions.--In subparagraph (A):
                            ``(i) Estimated aggregate number of cleared 
                        sides of transactions.--The term `estimated 
                        aggregate number of cleared sides of 
                        transactions' means, with respect to a fiscal 
                        year, the aggregate number of cleared sides of 
                        transactions to be cleared by registered 
                        derivatives clearing organizations during the 
                        fiscal year, as estimated by the Commission, 
                        after consultation with the Office of 
                        Management and Budget, using the methodology 
                        required for making projections pursuant to 
                        section 257 of the Balanced Budget and 
                        Emergency Deficit Control Act of 1985.
                            ``(ii) Target offsetting receipt amount.--
                        The term `target offsetting receipt amount' 
                        means, with respect to a fiscal year, the total 
                        level of Commission budget authority for all 
                        non-enforcement activities of the Commission, 
                        as contained in the regular appropriations Acts 
                        for the fiscal year.
                    ``(C) No judicial review.--An adjusted fee rate 
                prescribed under subparagraph (A) shall not be subject 
                to judicial review.
            ``(6) Publication.--Not later than April 30 of each fiscal 
        year, the Commission shall cause to be published in the Federal 
        Register notices of the fee rates applicable under this 
        subsection for the succeeding fiscal year, and any estimate or 
        projection on which the fee rates are based.
            ``(7) Establishment of futures and options transaction fee 
        account; deposit of fees.--There is established in the Treasury 
        of the United States an account which shall be known as the 
        `Futures and Options Transaction Fee Account'. All fees 
        collected under this subsection for a fiscal year shall be 
        deposited in the account. Amounts in the account are authorized 
        to be appropriated to fund the expenditures of the 
        Commission.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to fiscal years beginning 30 or more days after the date of the 
enactment of this Act.
    (c) Transition Rule.--If this section becomes law after March 31 
and before September 1 of a fiscal year, then paragraphs (5)(A) and (6) 
of section 12(e) of the Commodity Exchange Act shall be applied, in the 
case of the 1st fiscal year beginning after the date of the enactment 
of this Act, by substituting ``August 31'' for ``April 30''.

SEC. 357. NO EFFECT ON ANTITRUST LAW OR AUTHORITY OF THE FEDERAL TRADE 
              COMMISSION.

    (a) Nothing in this subtitle shall be construed to modify, impair, 
or supersede the operation of any of the antitrust laws. For purposes 
of this subsection, the term ``antitrust laws'' has the meaning given 
it in subsection (a) of the 1st section of the Clayton Act (15 U.S.C. 
12(a)), except that such term includes section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45) to the extent that such term applies to 
unfair methods of competition.
    (b) Nothing in this subtitle shall be construed to affect or 
diminish the jurisdiction or authority of the Federal Trade Commission 
with respect to its authorities under the Federal Trade Commission Act 
(15 U.S.C. 41 et seq.) or the Energy Independence and Security Act of 
2007 (Public Law 110-140) to obtain information, to carry out 
enforcement activities, or otherwise to carry out the responsibilities 
of the Federal Trade Commission.

SEC. 358. REGULATION OF CARBON DERIVATIVES MARKETS.

    (a) Default Rule.--Section 2 of the Commodity Exchange Act (7 
U.S.C. 2), as amended by section 352 of this Act, is amended by adding 
at the end the following:
    ``(k) The Commission shall have jurisdiction over the 
establishment, operations, and oversight of markets for regulated 
allowance derivatives (as defined in section 401 of the Federal Power 
Act (16 U.S.C. 791a and following)), and shall provide for the 
establishment, operation, and oversight of the markets in accordance 
with the same regulations that apply under this Act to included energy 
transactions.''.
    (b) Presidential Determinations.--To the extent that the President 
delegates the authority to promulgate regulations for the 
establishment, operation, and oversight of all markets for regulated 
allowance derivatives to a Federal agency other than the Commodity 
Futures Trading Commission pursuant to section 401 of the Federal Power 
Act, such determination shall supersede subsection (a). To the extent 
that the President determines that regulations promulgated pursuant to 
section 401(c)(2) of the Federal Power Act would provide for more 
stringent and effective market oversight, such regulations shall 
supersede subsection (a). Nothing in this section shall be construed to 
affect the operation of the default rules established in section 
401(c)(4) of the Federal Power Act.

SEC. 359. CEASE-AND-DESIST AUTHORITY.

    (a) Natural Gas Act.--Section 20 of the Natural Gas Act (15 U.S.C. 
717s) is amended by adding the following at the end:
    ``(e) Cease-and-desist Proceedings; Temporary Orders; Authority of 
the Commission.--
            ``(1) In general.--If the Commission finds, after notice 
        and opportunity for hearing, that any entity may be violating, 
        may have violated, or may be about to violate any provision of 
        this Act, or any rule, regulation, restriction, condition, or 
        order made or imposed by the Commission under the authority of 
        this Act, the Commission may publish its findings and issue an 
        order requiring such entity, and any other entity that is, was, 
        or would be a cause of the violation, due to an act or omission 
        the entity knew or should have known would contribute to such 
        violation, to cease and desist from committing or causing such 
        violation and any future violation of the same provision, rule, 
        or regulation. Such order may, in addition to requiring an 
        entity to cease and desist from committing or causing a 
        violation, require such entity to comply, to provide an 
        accounting and disgorgement, or to take steps to effect 
        compliance, with such provision, rule, or regulation, upon such 
        terms and conditions and within such time as the Commission may 
        specify in such order. Any such order may, as the Commission 
        deems appropriate, require future compliance or steps to effect 
        future compliance, either permanently or for such period of 
        time as the Commission may specify.
            ``(2) Timing of entry.--An order issued under this 
        subsection shall be entered only after notice and opportunity 
        for a hearing, unless the Commission determines that notice and 
        hearing prior to entry would be impracticable or contrary to 
        the public interest.
    ``(f) Hearing.--The notice instituting proceedings pursuant to 
subsection (e) shall fix a hearing date not earlier than 30 days nor 
later than 60 days after service of the notice unless an earlier or a 
later date is set by the Commission with the consent of any respondent 
so served.
    ``(g) Temporary Order.--Whenever the Commission determines that---
            ``(1) a respondent may take actions to dissipate or convert 
        assets prior to the completion of the proceedings referred to 
        in subsection (e), and such assets would be necessary to comply 
        with or otherwise satisfy a final enforcement order of the 
        Commission pursuant to alleged violations or threatened 
        violations specified in the notice instituting proceedings; or
            ``(2) a respondent is engaged in actual or threatened 
        violations of this Act or a Commission rule, regulation, 
        restriction or order referred to in subsection (e),
the Commission may issue a temporary order requiring the respondent to 
take such action to prevent dissipation or conversion of assets, 
significant harm to energy consumers, or substantial harm to the public 
interest, frustration of the Commission's ability to conduct the 
proceedings, or frustration of the Commission's ability to redress said 
violation at the conclusion of the proceedings, as the Commission deems 
appropriate pending completion of such proceedings.
    ``(h) Review of Temporary Orders.--
            ``(1) Commission review.--At any time after the respondent 
        has been served with a temporary cease-and-desist order 
        pursuant to subsection (g), the respondent may apply to the 
        Commission to have the order set aside, limited, or suspended. 
        If the respondent has been served with a temporary cease-and-
        desist order entered without a prior Commission hearing, the 
        respondent may, within 10 days after the date on which the 
        order was served, request a hearing on such application and the 
        Commission shall hold a hearing and render a decision on such 
        application at the earliest possible time.
            ``(2) Judicial review.--Within--
                    ``(A) 10 days after the date the respondent was 
                served with a temporary cease-and-desist order entered 
                with a prior Commission hearing; or
                    ``(B) 10 days after the Commission renders a 
                decision on an application and hearing under paragraph 
                (1),
        with respect to any temporary cease-and-desist order entered 
        without a prior Commission hearing, the respondent may apply to 
        the United States circuit court having jurisdiction over the 
        circuit in which the respondent resides or has its principal 
        place of business, or to the United States Court of Appeals for 
        the District of Columbia Circuit, for an order setting aside, 
        limiting, or suspending the effectiveness or enforcement of the 
        order, and the court shall have jurisdiction to enter such an 
        order. A respondent served with a temporary cease-and-desist 
        order entered without a prior Commission hearing may not apply 
        to the court except after hearing and decision by the 
        Commission on the respondent's application under paragraph (1) 
        of this subsection.
            ``(3) No automatic stay of temporary order.--The 
        commencement of proceedings under paragraph (2) of this 
        subsection shall not, unless specifically ordered by the court, 
        operate as a stay of the Commission's order.
            ``(4) Exclusive review.--Sections 19(d) and 24 shall not 
        apply to a temporary order entered pursuant to this section.
    ``(i) Implementation.--The Commission is authorized to adopt rules, 
regulations, and orders as it deems appropriate to implement this 
section.''.
    (c) Natural Gas Policy Act of 1978.--Section 504 of the Natural Gas 
Policy Act of 1978 (15 U.S.C. 3414) is amended by adding the following 
at the end:
    ``(d) Cease-and-desist Proceedings; Temporary Orders; Authority of 
the Commission.--
            ``(1) In general.--If the Commission finds, after notice 
        and opportunity for hearing, that any entity may be violating, 
        may have violated, or may be about to violate any provision of 
        this Act, or any rule, regulation, restriction, condition, or 
        order made or imposed by the Commission under the authority of 
        this Act, the Commission may publish its findings and issue an 
        order requiring such entity, and any other entity that is, was, 
        or would be a cause of the violation, due to an act or omission 
        the entity knew or should have known would contribute to such 
        violation, to cease and desist from committing or causing such 
        violation and any future violation of the same provision, rule, 
        or regulation. Such order may, in addition to requiring an 
        entity to cease and desist from committing or causing a 
        violation, require such entity to comply, to provide an 
        accounting and disgorgement, or to take steps to effect 
        compliance, with such provision, rule, or regulation, upon such 
        terms and conditions and within such time as the Commission may 
        specify in such order. Any such order may, as the Commission 
        deems appropriate, require future compliance or steps to effect 
        future compliance, either permanently or for such period of 
        time as the Commission may specify.
            ``(2) Timing of entry.--An order issued under this 
        subsection shall be entered only after notice and opportunity 
        for a hearing, unless the Commission determines that notice and 
        hearing prior to entry would be impracticable or contrary to 
        the public interest.
            ``(3) Hearing.--The notice instituting proceedings pursuant 
        to paragraph (1) shall fix a hearing date not earlier than 30 
        days nor later than 60 days after service of the notice unless 
        an earlier or a later date is set by the Commission with the 
        consent of any respondent so served.
            ``(4) Temporary order.--Whenever the Commission determines 
        that--
                    ``(A) a respondent may take actions to dissipate or 
                convert assets prior to the completion of the 
                proceedings referred to in paragraph (1) and such 
                assets would be necessary to comply with or otherwise 
                satisfy a final enforcement order of the Commission 
                pursuant to alleged violations or threatened violations 
                specified in the notice instituting proceedings; or
                    ``(B) a respondent is engaged in actual or 
                threatened violations of this Act or a Commission rule, 
                regulation, restriction or order referred to in 
                paragraph (1),
        the Commission may issue a temporary order requiring the 
        respondent to take such action to prevent dissipation or 
        conversion of assets, significant harm to energy consumers, or 
        substantial harm to the public interest, frustration of the 
        Commission's ability to conduct the proceedings, or frustration 
        of the Commission's ability to redress said violation at the 
        conclusion of the proceedings, as the Commission deems 
        appropriate pending completion of such proceedings.
            ``(5) Review of temporary orders.--
                    ``(A) Commission review.--At any time after the 
                respondent has been served with a temporary cease-and-
                desist order pursuant to paragraph (4), the respondent 
                may apply to the Commission to have the order set 
                aside, limited, or suspended. If the respondent has 
                been served with a temporary cease-and-desist order 
                entered without a prior Commission hearing, the 
                respondent may, within 10 days after the date on which 
                the order was served, request a hearing on such 
                application and the Commission shall hold a hearing and 
                render a decision on such application at the earliest 
                possible time.
                    ``(B) Judicial review.--Within--
                            ``(i) 10 days after the date the respondent 
                        was served with a temporary cease-and-desist 
                        order entered with a prior Commission hearing; 
                        or
                            ``(ii) 10 days after the Commission renders 
                        a decision on an application and hearing under 
                        subparagraph (A), with respect to any temporary 
                        cease-and-desist order entered without a prior 
                        Commission hearing, the respondent may apply to 
                        the United States circuit court having 
                        jurisdiction over the circuit in which the 
                        respondent resides or has its principal place 
                        of business, or to the United States Court of 
                        Appeals for the District of Columbia Circuit, 
                        for an order setting aside, limiting, or 
                        suspending the effectiveness or enforcement of 
                        the order, and the court shall have 
                        jurisdiction to enter such an order. A 
                        respondent served with a temporary cease-and-
                        desist order entered without a prior Commission 
                        hearing may not apply to the court except after 
                        hearing and decision by the Commission on the 
                        respondent's application under paragraph (1) of 
                        this subsection.
                    ``(C) No automatic stay of temporary order.--The 
                commencement of proceedings under subparagraph (B) of 
                this paragraph shall not, unless specifically ordered 
                by the court, operate as a stay of the Commission's 
                order.
            ``(6) Implementation.--The Commission is authorized to 
        adopt rules, regulations, and orders as it deems appropriate to 
        implement this subsection.''.

           TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

      Subtitle A--Ensuring Real Reductions in Industrial Emissions

SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS.

    Title VII of the Clean Air Act is amended by inserting after part E 
the following new part:

       ``PART F--ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS

``SEC. 761. PURPOSES.

    ``(a) Purpose of Part.--The purposes of this part are--
            ``(1) to promote a strong global effort to significantly 
        reduce greenhouse gas emissions, and, through this global 
        effort, stabilize greenhouse gas concentrations in the 
        atmosphere at a level that will prevent dangerous anthropogenic 
        interference with the climate system; and
            ``(2) to prevent an increase in greenhouse gas emissions in 
        countries other than the United States as a result of direct 
        and indirect compliance costs incurred under this title.
    ``(b) Purposes of Subpart 1.--The purposes of subpart 1 are 
additionally--
            ``(1) to rebate the owners and operators of entities in 
        domestic eligible industrial sectors for their greenhouse gas 
        emission costs incurred under this title, but not for costs 
        associated with other related or unrelated market dynamics;
            ``(2) to design such rebates in a way that will prevent 
        carbon leakage while also rewarding innovation and facility-
        level investments in energy efficiency performance 
        improvements; and
            ``(3) to eliminate or reduce distribution of emission 
        allowances under this part when such distribution is no longer 
        necessary to prevent carbon leakage from eligible industrial 
        sectors.

``SEC. 762. INTERNATIONAL NEGOTIATIONS.

    ``(a) Finding.--Congress finds that the purposes of this part, as 
set forth in section 761, can be most effectively addressed and 
achieved through agreements negotiated between the United States and 
foreign countries.
    ``(b) Statement of Policy.--It is the policy of the United States 
to work proactively under the United Nations Framework Convention on 
Climate Change, and in other appropriate forums, to establish binding 
agreements, including sectoral agreements, committing all major 
greenhouse gas-emitting nations to contribute equitably to the 
reduction of global greenhouse gas emissions.
    ``(c) Notification of Foreign Countries.--Not later than January 1, 
2020, the President shall notify foreign countries that an 
International Reserve Allowance Program, as described in subpart 2, may 
apply to primary products produced in a foreign country by a sector 
with respect to which the President has made a determination under 
section 767(b) that 70 percent or less of the global output for the 
sector is produced or manufactured in countries that have met one or 
more of the criteria in that subsection.

``SEC. 763. DEFINITIONS.

    ``In this part:
            ``(1) Carbon leakage.--The term `carbon leakage' means any 
        substantial increase (as determined by the Administrator) in 
        greenhouse gas emissions by industrial entities located in 
        other countries if such increase is caused by an incremental 
        cost of production increase in the United States resulting from 
        the implementation of this title.
            ``(2) Eligible industrial sector.--The term `eligible 
        industrial sector' means an industrial sector determined by the 
        Administrator under section 764(b) to be eligible to receive 
        emission allowance rebates under subpart 1.
            ``(3) Industrial sector.--The term `industrial sector' 
        means any sector that is in the manufacturing sector (as 
        defined in NAICS codes 31, 32, and 33).
            ``(4) NAICS.--The term `NAICS' means the North American 
        Industrial Classification System of 2002.
            ``(5) Output.--The term `output' means the total tonnage or 
        other standard unit of production (as determined by the 
        Administrator) produced by an entity in an industrial sector. 
        The output of the cement sector is hydraulic cement, and not 
        clinker.
            ``(6) Primary product.--The term `primary product' means a 
        product manufactured by an eligible industrial sector that is--
                    ``(A) iron, steel, steel mill products (including 
                pipe and tube), aluminum, cement, glass (including 
                flat, container, and specialty glass and fiberglass), 
                pulp, paper, chemicals, or industrial ceramics; or
                    ``(B) any other manufactured product that is sold 
                in bulk for purposes of further manufacture or 
                inclusion in a finished product.

             ``Subpart 1--Emission Allowance Rebate Program

``SEC. 764. ELIGIBLE INDUSTRIAL SECTORS.

    ``(a) List.--
            ``(1) Initial list.--Not later than June 30, 2011, the 
        Administrator shall publish in the Federal Register a list of 
        eligible industrial sectors pursuant to subsection (b). Such 
        list shall include the amount of the emission allowance rebate 
        per unit of production that shall be provided to entities in 
        each eligible industrial sector in the following two calendar 
        years pursuant to section 765.
            ``(2) Subsequent lists.--Not later than February 1, 2013, 
        and every four years thereafter, the Administrator shall 
        publish in the Federal Register an updated version of the list 
        published under paragraph (1).
    ``(b) Eligible Industrial Sectors.--
            ``(1) In general.--Not later than June 30, 2011, the 
        Administrator shall promulgate a rule designating, based on the 
        criteria under paragraph (2), the industrial sectors eligible 
        for emission allowance rebates under this subpart.
            ``(2) Presumptively eligible industrial sectors.--
                    ``(A) Eligibility criteria.--An owner or operator 
                of an entity shall be eligible to receive emission 
                allowance rebates under this subpart if such entity is 
                in an industrial sector that is included in a six-digit 
                classification of the NAICS that meets the criteria in 
                both clauses (i) and (ii), or the criteria in clause 
                (iii).
                            ``(i) Energy or greenhouse gas intensity.--
                        As determined by the Administrator, the 
                        industrial sector had--
                                    ``(I) an energy intensity of at 
                                least 5 percent, calculated by dividing 
                                the cost of purchased electricity and 
                                fuel costs of the sector by the value 
                                of the shipments of the sector, based 
                                on data described in subparagraph (E); 
                                or
                                    ``(II) a greenhouse gas intensity 
                                of at least 5 percent, calculated by 
                                dividing--
                                            ``(aa) the number 20 
                                        multiplied by the number of 
                                        tons of carbon dioxide 
                                        equivalent greenhouse gas 
                                        emissions (including direct 
                                        emissions from fuel combustion, 
                                        process emissions, and indirect 
                                        emissions from the generation 
                                        of electricity used to produce 
                                        the output of the sector) of 
                                        the sector based on data 
                                        described in subparagraph (E); 
                                        by
                                            ``(bb) the value of the 
                                        shipments of the sector, based 
                                        on data described in 
                                        subparagraph (E).
                            ``(ii) Trade intensity.--As determined by 
                        the Administrator, the industrial sector had a 
                        trade intensity of at least 15 percent, 
                        calculated by dividing the value of the total 
                        imports and exports of such sector by the value 
                        of the shipments plus the value of imports of 
                        such sector, based on data described in 
                        subparagraph (E).
                            ``(iii) Very high energy or greenhouse gas 
                        intensity.--As determined by the Administrator, 
                        the industrial sector had an energy or 
                        greenhouse gas intensity, as calculated under 
                        clause (i)(I) or (II), of at least 20 percent.
                    ``(B) Iron and steel sector.--For purposes of this 
                subpart, in carrying out this section and section 765, 
                the Administrator shall consider as in different 
                industrial sectors--
                            ``(i) entities using integrated iron and 
                        steelmaking technologies (including coke ovens, 
                        blast furnaces, and other iron-making 
                        technologies); and
                            ``(ii) entities using electric arc furnace 
                        technologies.
                    ``(C) Metal and phosphate production classified 
                under more than one naics code.--For purposes of this 
                subpart, in carrying out this section and section 765, 
                the Administrator shall--
                            ``(i) aggregate data for the beneficiation 
                        or other processing of iron and copper ores and 
                        phosphate with subsequent steps in the process 
                        of metal and phosphate manufacturing regardless 
                        of the NAICS code under which such activity is 
                        classified; and
                            ``(ii) aggregate data for the manufacturing 
                        of steel with the manufacturing of steel pipe 
                        and tube made from purchased steel in a 
                        nonintegrated process.
                    ``(D) Exclusion.--The petroleum refining sector 
                shall not be an eligible industrial sector.
                    ``(E) Data sources.--
                            ``(i) Electricity and fuel costs, value of 
                        shipments.--The Administrator shall determine 
                        electricity and fuel costs and the value of 
                        shipments under this subsection from data from 
                        the United States Census of Mineral Industries 
                        and the United States Census Annual Survey of 
                        Manufacturers. The Administrator shall take the 
                        average of data from as many of the years of 
                        2004, 2005, and 2006 for which such data are 
                        available. If such data are unavailable, the 
                        Administrator shall make a determination based 
                        upon 2002 or 2006 data from the most detailed 
                        industrial classification level of Energy 
                        Information Agency's Manufacturing Energy 
                        Consumption Survey (using 2006 data if it is 
                        available) and the 2002 or 2007 Economic Census 
                        of the United States (using 2007 data if it is 
                        available). If data from the Manufacturing 
                        Energy Consumption Survey are unavailable for 
                        any sector at the six-digit classification 
                        level in the NAICS, then the Administrator may 
                        extrapolate the information necessary to 
                        determine the eligibility of a sector under 
                        this paragraph from available Manufacturing 
                        Energy Consumption Survey data pertaining to a 
                        broader industrial category classified in the 
                        NAICS. Fuel cost data shall not include the 
                        cost of fuel used as feedstock by an industrial 
                        sector.
                            ``(ii) Imports and exports.--The 
                        Administrator shall base the value of imports 
                        and exports under this subsection on United 
                        States International Trade Commission data. The 
                        Administrator shall take the average of data 
                        from as many of the years of 2004, 2005, and 
                        2006 for which such data are available.
                            ``(iii) Percentages.--The Administrator 
                        shall round the energy intensity, greenhouse 
                        gas intensity, and trade intensity percentages 
                        under subparagraph (A) to the nearest whole 
                        number.
                            ``(iv) Greenhouse gas emission 
                        calculations.--When calculating the tons of 
                        carbon dioxide equivalent greenhouse gas 
                        emissions for each sector under subparagraph 
                        (A)(i)(II)(aa), the Administrator--
                                    ``(I) shall use the best available 
                                data from as many of the years 2004, 
                                2005, and 2006 for which such data is 
                                available; and
                                    ``(II) may, to the extent necessary 
                                with respect to a sector, use economic 
                                and engineering models and the best 
                                available information on technology 
                                performance levels for such sector.
            ``(3) Administrative determination of additional eligible 
        industrial sectors.--
                    ``(A) Updated trade intensity data.--The 
                Administrator shall designate as eligible to receive 
                emission allowance rebates under this subpart an 
                industrial sector that--
                            ``(i) met the energy or greenhouse gas 
                        intensity criteria in paragraph (2)(A)(i) as of 
                        the date of promulgation of the rule under 
                        paragraph (1); and
                            ``(ii) meets the trade intensity criteria 
                        in paragraph (2)(A)(ii), using data from any 
                        year after 2006.
                    ``(B) Individual showing petition.--
                            ``(i) Petition.--In addition to designation 
                        under paragraph (2) or subparagraph (A) of this 
                        paragraph, the owner or operator of an entity 
                        in an industrial sector may petition the 
                        Administrator to designate as eligible 
                        industrial sectors under this subpart an entity 
                        or a group of entities that--
                                    ``(I) represent a subsector of a 
                                six-digit section of the NAICS code; 
                                and
                                    ``(II) meet the eligibility 
                                criteria in both clauses (i) and (ii) 
                                of paragraph (2)(A), or the eligibility 
                                criteria in clause (iii) of paragraph 
                                (2)(A).
                            ``(ii) Data.--In making a determination 
                        under this subparagraph, the Administrator 
                        shall consider data submitted by the petitioner 
                        that is specific to the entity, data solicited 
                        by the Administrator from other entities in the 
                        subsector, if such other entities exist, and 
                        data specified in paragraph (2)(E).
                            ``(iii) Basis of subsector determination.--
                        The Administrator shall determine an entity or 
                        group of entities to be a subsector of a six-
                        digit section of the NAICS code based only upon 
                        the products manufactured and not the 
                        industrial process by which the products are 
                        manufactured, except that the Administrator may 
                        determine an entity or group of entities that 
                        manufacture a product from a [virgin material] 
                        to be a separate subsector from another entity 
                        or group of entities that manufacture the same 
                        product from recycled material.
                            ``(iv) Use of most recent data.--In 
                        determining whether to designate a sector or 
                        subsector as an eligible industrial sector 
                        under this subparagraph, the Administrator 
                        shall use the most recent data available from 
                        the sources described in paragraph (2)(E), 
                        rather than the data from the years specified 
                        in paragraph (2)(E), to determine the trade 
                        intensity of such sector or subsector, but only 
                        for determining such trade intensity.
                            ``(v) Final action.--The Administrator 
                        shall take final action on such petition no 
                        later than 6 months after the petition is 
                        received by the Administrator.

``SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE REBATES.

    ``(a) Distribution Schedule.--
            ``(1) In general.--For each vintage year, the Administrator 
        shall distribute pursuant to this section emission allowances 
        made available under section 782(e), no later than October 31 
        of the preceding calendar year. The Administrator shall make 
        such annual distributions to the owners and operators of each 
        entity in an eligible industrial sector in the amount of 
        emission allowances calculated under subsection (b), except 
        that--
                    ``(A) for vintage years 2012 and 2013, the 
                distribution for a covered entity shall be the entity's 
                indirect carbon factor as calculated under subsection 
                (b)(3); and
                    ``(B) for vintage year 2026 and thereafter, the 
                distribution shall be the amount calculated under 
                subsection (b) multiplied by, except as modified by the 
                President pursuant to section 767(c)(3)(A) for a 
                sector--
                            ``(i) 90 percent for vintage year 2026;
                            ``(ii) 80 percent for vintage year 2027;
                            ``(iii) 70 percent for vintage year 2028;
                            ``(iv) 60 percent for vintage year 2029;
                            ``(v) 50 percent for vintage year 2030;
                            ``(vi) 40 percent for vintage year 2031;
                            ``(vii) 30 percent for vintage year 2032;
                            ``(viii) 20 percent for vintage year 2033;
                            ``(ix) 10 percent for vintage year 2034; 
                        and
                            ``(x) 0 percent for vintage year 2035 and 
                        thereafter.
            ``(2) Resumption of reduction.--If the President has 
        modified the percentage stated in paragraph (1)(B) under 
        section 767(c)(3)(A), and the President subsequently makes a 
        determination under section 767(b) for an eligible industrial 
        sector that more than 70 percent of global output for that 
        sector is produced or manufactured in countries that have met 
        at least one of the criteria in that subsection, then the 10-
        year reduction schedule set forth in paragraph (1)(B) of this 
        subsection shall begin in the next vintage year, with the 
        percentage reduction based on the amount of the distribution of 
        emission allowances under this section in the previous year.
            ``(3) Newly eligible sectors.--In addition to receiving a 
        distribution of emission allowances under this section in the 
        first distribution occurring after an industrial sector is 
        designated as eligible under section 764(b)(3), the owner or 
        operator of an entity in that eligible industrial sector may 
        receive a prorated share of any emission allowances made 
        available for distribution under this section that were not 
        distributed for the year in which the petition for eligibility 
        was granted under section 764(b)(3)(B).
    ``(b) Calculation of Direct and Indirect Carbon Factors.--
            ``(1) In general.--
                    ``(A) Covered entities.--Except as provided in 
                subsection (a), for covered entities that are in 
                eligible industrial sectors, the amount of emission 
                allowance rebates shall be based on the sum of the 
                covered entity's direct and indirect carbon factors.
                    ``(B) Other eligible entities.--For entities that 
                are in eligible industrial sectors but are not covered 
                entities, the amount of emission allowance rebates 
                shall be based on the entity's indirect carbon factor.
                    ``(C) New entities.--Not later than 2 years after 
                the date of enactment of this title, the Administrator 
                shall issue regulations governing the distribution of 
                emission allowance rebates for the first and second 
                years of operation of a new entity in an eligible 
                industrial sector. These regulations shall provide 
                for--
                            ``(i) the distribution of emission 
                        allowance rebates to such entities based on 
                        comparable entities in the same sector; and
                            ``(ii) an adjustment in the third and 
                        fourth years of operation to reconcile the 
                        total amount of emission allowance rebates 
                        received during the first and second years of 
                        operation to the amount the entity would have 
                        received during the first and second years of 
                        operation had the appropriate data been 
                        available.
            ``(2) Direct carbon factor.--The direct carbon factor for a 
        covered entity for a vintage year is the product of--
                    ``(A) the average output of the covered entity for 
                the two years preceding the year of the distribution; 
                and
                    ``(B) the most recent calculation of the average 
                direct greenhouse gas emissions (expressed in tons of 
                carbon dioxide equivalent) per unit of output for all 
                covered entities in the sector, as determined by the 
                Administrator under paragraph (4).
            ``(3) Indirect carbon factor.--
                    ``(A) In general.--The indirect carbon factor for 
                an entity for a vintage year is the product obtained by 
                multiplying the average output of the entity for the 
                two years preceding the year of the distribution by 
                both the electricity emissions intensity factor 
                determined pursuant to subparagraph (B) and the 
                electricity efficiency factor determined pursuant to 
                subparagraph (C) for the year concerned.
                    ``(B) Electricity emissions intensity factor.--Each 
                person selling electricity to the owner or operator of 
                an entity in any sector designated as an eligible 
                industrial sector under section 764(b) shall provide 
                the owner or operator of the entity and the 
                Administrator, on an annual basis, the electricity 
                emissions intensity factor for the entity. [The 
                electricity emissions intensity factor for the entity, 
                expressed in tons of carbon dioxide equivalents per 
                kilowatt hour, is determined by dividing--]
                            [``(i) the annual sum of the hourly product 
                        of--]
                                    [``(I) the electricity purchased by 
                                the entity from that person in each 
                                hour (expressed in kilowatt hours); 
                                multiplied by]
                                    [``(II) the marginal [or] weighted 
                                [average] tons of carbon dioxide 
                                equivalent per kilowatt hour that the 
                                person selling the electricity 
                                [charges] to the entity, taking into 
                                account the entity's retail rate 
                                arrangements; by]
                            [``(ii) the total kilowatt hours of 
                        electricity purchased by the entity from that 
                        person during that year.]
                    ``(C) Electricity efficiency factor.--The 
                electricity efficiency factor is the average amount of 
                electricity (in kilowatt hours) used per unit of output 
                for all entities in the relevant sector, as determined 
                by the Administrator based on the best available data, 
                including data provided under paragraph (6).
                    ``(D) Indirect carbon factor reduction.--If an 
                electricity provider received a free allocation of 
                emission allowances pursuant to section 782(a), the 
                Administrator shall adjust the indirect carbon factor 
                to avoid rebates to the eligible entity for costs that 
                the Administrator determines were not incurred by the 
                industrial entity because the allowances were freely 
                allocated to the eligible entity's electricity provider 
                and used for the benefit of industrial consumers.
            ``(4) Greenhouse gas intensity calculations.--The 
        Administrator shall calculate the average direct greenhouse gas 
        emissions (expressed in tons of carbon dioxide equivalent) per 
        unit of output for all covered entities in each eligible 
        industrial sector every four years using an average of the two 
        most recent years of the best available data.
            ``(5) Ensuring efficiency improvements.--When making 
        greenhouse gas calculations, the Administrator shall--
                    ``(A) limit the average direct greenhouse gas 
                emissions per unit of output, calculated under 
                paragraph (4), for any eligible industrial sector to an 
                amount that is not greater than it was in any previous 
                calculation under this subsection; and
                    ``(B) limit the electricity emissions intensity 
                factor, calculated under paragraph (3)(B) and resulting 
                from a change in electricity supply, for any entity to 
                an amount that is not greater than it was during any 
                previous year.
            ``(6) Data sources.--For the purposes of this subsection--
                    ``(A) the Administrator shall use data from the 
                greenhouse gas registry established under section 713, 
                where it is available; and
                    ``(B) each owner or operator of an entity in an 
                eligible industrial sector and each department, agency, 
                and instrumentality of the United States shall provide 
                the Administrator with such information as the 
                Administrator finds necessary to determine the direct 
                carbon factor and the indirect carbon factor for each 
                entity subject to this section.
    ``(c) Total Maximum Distribution.--Notwithstanding subsections (a) 
and (b), the Administrator shall not distribute more allowances for any 
vintage year pursuant to this section than are allocated for use under 
this part pursuant to section 782(e) for that vintage year. For any 
vintage year for which the total emission allowance rebates calculated 
pursuant to this section exceed the number of allowances allocated 
pursuant to section 782(e), the Administrator shall reduce each 
entity's distribution on a pro rata basis so that the total 
distribution under this section equals the number of allowances 
allocated under section 782(e).

          ``Subpart 2--International Reserve Allowance Program

``SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.--If the President takes an action 
        described in section 767(c)(3)(B) with respect to a sector 
        then, not later than 24 months after that determination, the 
        Administrator shall issue regulations--
                    ``(A) determining an appropriate price for and 
                offering for sale to United States importers 
                international reserve allowances;
                    ``(B) requiring the submission of appropriate 
                amounts of such allowances in conjunction with the 
                importation into the United States of a primary product 
                produced or manufactured by that sector;
                    ``(C) exempting from the requirements of 
                subparagraph (B) primary products produced in--
                            ``(i) a foreign country that the United 
                        Nations has identified as among the least 
                        developed of developing countries; or
                            ``(ii) a foreign country that the President 
                        has determined to be responsible for less than 
                        0.5 percent of total global greenhouse gas 
                        emissions; and
                    ``(D) prohibiting the introduction into interstate 
                commerce of a primary product without submitting the 
                required number of international reserve allowances in 
                accordance with such regulations, unless the product 
                was produced by a covered entity under this title, or 
                by an entity that is [or could be] regulated under this 
                title.
            ``(2) Purpose of program.--The Administrator shall 
        establish the program under paragraph (1) in a manner that 
        addresses, consistent with international agreements to which 
        the United States is a party, the competitive imbalance in the 
        costs of producing or manufacturing primary products in 
        industrial sectors resulting from the difference between--
                    ``(A) the direct and indirect costs of complying 
                with this title; and
                    ``(B) the direct and indirect costs, if any, of 
                complying in other countries with greenhouse gas 
                regulatory programs, requirements, or export tariffs, 
                or other measures adopted or imposed that are related 
                to the reduction of greenhouse gas emissions.
            ``(3) Emission allowance rebates.--The Administrator shall 
        take into account the value of emission allowance rebates 
        distributed under subpart 1 when making calculations under 
        paragraph (2).
            ``(4) Limitation.--The International Reserve Allowance 
        Program may not begin before January 1, 2025.
    ``(b) Covered Entities.--International reserve allowances may not 
be held by covered entities to comply with section 722.

                ``Subpart 3--Presidential Determination

``SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS.

    ``(a) Report.--Not later than January 1, 2018, the President shall 
submit a report to Congress on the effectiveness of the distribution of 
emission allowance rebates under subpart 1 in mitigating carbon leakage 
in industrial sectors. Such report shall also include--
            ``(1) recommendations on how to better achieve the purposes 
        of this part, including an assessment of the feasibility and 
        usefulness of an International Reserve Allowance Program; and
            ``(2) an assessment of the amount and duration of 
        assistance, including distribution of free allowances, being 
        provided to eligible industrial sectors in other developed 
        countries to mitigate costs of compliance with domestic 
        greenhouse gas reduction programs in such countries.
    ``(b) Presidential Determination.--Not later than June 30, 2022, 
and every four years thereafter, the President, in consultation with 
the Administrator and other appropriate agencies, shall determine, for 
each eligible industrial sector, whether more than 70 percent of global 
output for that sector is produced or manufactured in countries that 
have met at least one of the following criteria:
            ``(1) The country is a party to an international agreement 
        to which the United States is a party that includes a 
        nationally enforceable greenhouse gas emissions reduction 
        commitment for that country that is at least as stringent as 
        that of the United States.
            ``(2) The country is a party to a multilateral or bilateral 
        emission reduction agreement for that sector to which the 
        United States is a party.
            ``(3) The country has an annual energy or greenhouse gas 
        intensity, as described in section 764(b)(2)(A)(i), for the 
        sector that is equal to or less than the energy or greenhouse 
        gas intensity for such sector in the United States in the most 
        recent calendar year for which data are available.
            ``(4) The country has implemented policies, including 
        sectoral caps, export tariffs, production fees, electricity 
        generation regulations, or greenhouse gas emissions fees, that 
        individually or collectively impose an incremental increase on 
        the cost of production associated with greenhouse gas emissions 
        from the sector that is at least 60 percent of the cost of 
        complying with this title in the United States for such sector, 
        averaged over a two-year period.
    ``(c) Effect of Presidential Determination.--If the President makes 
a determination under subsection (b) with respect to an eligible 
industrial sector that 70 percent or less of the global output for the 
sector is produced or manufactured in countries that have met one or 
more of the criteria in subsection (b), then the President shall, not 
later than June 30, 2022, and every four years thereafter--
            ``(1) assess the extent to which the emission allowance 
        rebates provided pursuant to subpart 1 have mitigated or 
        addressed, or could mitigate or address, carbon leakage in that 
        sector;
            ``(2) assess the extent to which an International Reserve 
        Allowance Program has mitigated or addressed, or could mitigate 
        or address, carbon leakage in that sector and the feasibility 
        of establishing such a program; and
            ``(3) with respect to that sector--
                    ``(A) modify the percentage by which direct and 
                indirect carbon factors will be multiplied under 
                section 765(a)(1)(B);
                    ``(B) implement an International Reserve Allowance 
                Program under section 766 for the products of the 
                sector; or
                    ``(C) take the actions in both subparagraph (A) and 
                (B).
    ``(d) Report to Congress.--Not later than June 30, 2022, and every 
four years thereafter, the President shall transmit to the Congress a 
report providing notice of any determination made under subsection (b), 
explaining the reasons for such determination, and identifying the 
actions taken by the President under subsection (c).
    ``(e) Limitation.--The President may only implement an 
International Reserve Allowance Program for sectors producing primary 
products.
    ``(f) Iron and Steel Sector.--For the purposes of this subpart, the 
Administrator shall consider to be in the same industrial sector--
            ``(1) entities using integrated iron and steelmaking 
        technologies (including coke ovens, blast furnaces, and other 
        iron-making technologies); and
            ``(2) entities using electric arc furnace technologies.''.

              Subtitle B--Green Jobs and Worker Transition

                           PART 1--GREEN JOBS

SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT GRANTS.

    (a) Authorization.--The Secretary of Education is authorized to 
award grants, on a competitive basis, to eligible partnerships to 
develop programs of study (containing the information described in 
section 122(c)(1)(A) of the Carl D. Perkins Career and Technical 
Education Act of 2006 (20 U.S.C. 2342)), that are focused on emerging 
careers and jobs in the fields of clean energy, renewable energy, 
energy efficiency, climate change mitigation, and climate change 
adaptation. The Secretary of Education shall consult with the Secretary 
of Labor and the Secretary of Energy prior to the issuance of a 
solicitation for grant applications.
    (b) Eligible Partnerships.--For purposes of this section, an 
eligible partnership shall include--
            (1) at least 1 local educational agency eligible for 
        funding under section 131 of the Carl D. Perkins Career and 
        Technical Education Act of 2006 (20 U.S.C. 2351) or an area 
        career and technical education school or education service 
        agency described in such section;
            (2) at least 1 postsecondary institution eligible for 
        funding under section 132 of such Act (20 U.S.C. 2352); and
            (3) representatives of the community including business, 
        labor organizations, and industry that have experience in 
        fields as described in subsection (a).
    (c) Application.--An eligible partnership seeking a grant under 
this section shall submit an application to the Secretary at such time 
and in such manner as the Secretary may require. Applications shall 
include--
            (1) a description of the eligible partners and partnership, 
        the roles and responsibilities of each partner, and a 
        demonstration of each partner's capacity to support the 
        program;
            (2) a description of the career area or areas within the 
        fields as described in subsection (a) to be developed, the 
        reason for the choice, and evidence of the labor market need to 
        prepare students in that area;
            (3) a description of the new or existing program of study 
        and both secondary and postsecondary components;
            (4) a description of the students to be served by the new 
        program of study;
            (5) a description of how the program of study funded by the 
        grant will be replicable and disseminated to schools outside of 
        the partnership, including urban and rural areas;
            (6) a description of applied learning that will be 
        incorporated into the program of study and how it will 
        incorporate or reinforce academic learning;
            (7) a description of how the program of study will be 
        delivered;
            (8) a description of how the program will provide 
        accessibility to students, especially economically 
        disadvantaged, low performing, and urban and rural students;
            (9) a description of how the program will address placement 
        of students in nontraditional fields as described in section 
        3(20) of the Carl D. Perkins Career and Technical Education Act 
        of 2006 (20 U.S.C. 2302(20)); and
            (10) a description of how the applicant proposes to consult 
        or has consulted with a labor organization, labor management 
        partnership, apprenticeship program, or joint apprenticeship 
        and training program that provides education and training in 
        the field of study for which the applicant proposes to develop 
        a curriculum.
    (d) Priority.--The Secretary shall give priority to applications 
that--
            (1) use online learning or other innovative means to 
        deliver the program of study to students, educators, and 
        instructors outside of the partnership; and
            (2) focus on low performing students and special 
        populations as defined in section 3(29) of the Carl D. Perkins 
        Career and Technical Education Act of 2006 (20 U.S.C. 
        2302(29)).
    (e) Peer Review.--The Secretary shall convene a peer review process 
to review applications for grants under this section and to make 
recommendations regarding the selection of grantees. Members of the 
peer review committee shall include--
            (1) educators who have experience implementing curricula 
        with comparable purposes; and
            (2) business and industry experts in fields as described in 
        subsection (a).
    (f) Uses of Funds.--Grants awarded under this section shall be used 
for the development, implementation, and dissemination of programs of 
study (as described in section 122(c)(1)(A) of the Carl D. Perkins 
Career and Technical Education Act (20 U.S.C. 2342(c)(1)(A))) in career 
areas related to clean energy, renewable energy, energy efficiency, 
climate change mitigation, and climate change adaptation.

SEC. 422. INCREASED FUNDING FOR ENERGY WORKER TRAINING PROGRAM.

    Section 171(e)(8) of the Workforce Investment Act of 1998 (29 
U.S.C. 2916(e)(8)) is amended by striking ``$125,000,000'' and 
inserting ``$150,000,000''.

          PART 2--CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE

SEC. 425. PETITIONS, ELIGIBILITY REQUIREMENTS, AND DETERMINATIONS.

    (a) Petitions.--
            (1) Filing.--A petition for certification of eligibility to 
        apply for adjustment assistance for a group of workers under 
        this part may be filed by any of the following:
                    (A) The group of workers.
                    (B) The certified or recognized union or other duly 
                authorized representative of such workers.
                    (C) Employers of such workers, one-stop operators 
                or one-stop partners (as defined in section 101 of the 
                Workforce Investment Act of 1998 (29 U.S.C. 2801)), 
                including State employment security agencies, or the 
                State dislocated worker unit established under title I 
                of such Act, on behalf of such workers.
        The petition shall be filed simultaneously with the Secretary 
        of Labor and with the Governor of the State in which such 
        workers' employment site is located.
            (2) Action by governors.--Upon receipt of a petition filed 
        under paragraph (1), the Governor shall--
                    (A) ensure that rapid response activities and 
                appropriate core and intensive services (as described 
                in section 134 of the Workforce Investment Act of 1998 
                (29 U.S.C. 2864)) authorized under other Federal laws 
                are made available to the workers covered by the 
                petition to the extent authorized under such laws; and
                    (B) assist the Secretary in the review of the 
                petition by verifying such information and providing 
                such other assistance as the Secretary may request.
            (3) Action by the secretary.--Upon receipt of the petition, 
        the Secretary shall promptly publish notice in the Federal 
        Register and on the website of the Department of Labor that the 
        Secretary has received the petition and initiated an 
        investigation.
            (4) Hearings.--If the petitioner, or any other person found 
        by the Secretary to have a substantial interest in the 
        proceedings, submits not later than 10 days after the date of 
        the Secretary's publication under paragraph (3) a request for a 
        hearing, the Secretary shall provide for a public hearing and 
        afford such interested persons an opportunity to be present, to 
        produce evidence, and to be heard.
    (b) Eligibility.--
            (1) In general.--A group of workers shall be certified by 
        the Secretary as eligible to apply for adjustment assistance 
        under this part pursuant to a petition filed under subsection 
        (a) if--
                    (A) the group of workers is employed in--
                            (i) energy producing and transforming 
                        industries;
                            (ii) industries dependent upon energy 
                        industries;
                            (iii) energy-intensive manufacturing 
                        industries;
                            (iv) consumer goods manufacturing; or
                            (v) other industries whose employment the 
                        Secretary determines has been adversely 
                        affected by any requirement of title VII of the 
                        Clean Air Act;
                    (B) the Secretary determines that a significant 
                number or proportion of the workers in such workers' 
                employment site have become totally or partially 
                separated, or are threatened to become totally or 
                partially separated from employment; and
                    (C) the sales, production, or delivery of goods or 
                services have decreased as a result of any requirement 
                of title VII of the Clean Air Act, including--
                            (i) the shift from reliance upon fossil 
                        fuels to other sources of energy, including 
                        renewable energy, that results in the closing 
                        of a facility or layoff of employees at a 
                        facility that mines, produces, processes, or 
                        utilizes fossil fuels to generate electricity;
                            (ii) a substantial increase in the cost of 
                        energy required for a manufacturing facility to 
                        produce items whose prices are competitive in 
                        the marketplace, to the extent the cost is not 
                        offset by allowance allocation to the facility 
                        pursuant to title VII of the Clean Air Act; or
                            (iii) other documented occurrences that the 
                        Secretary determines are indicators of an 
                        adverse impact on an industry described in 
                        subparagraph (A) as a result of any requirement 
                        of title VII of the Clean Air Act.
            (2) Workers in public agencies.--A group of workers in a 
        public agency shall be certified by the Secretary as eligible 
        to apply for climate change adjustment assistance pursuant to a 
        petition filed if the Secretary determines that a significant 
        number or proportion of the workers in the public agency have 
        become totally or partially separated from employment, or are 
        threatened to become totally or partially separated as a result 
        of any requirement of title VII of the Clean Air Act.
            (3) Adversely affected service workers.--A group of workers 
        shall be certified as eligible to apply for climate change 
        adjustment assistance pursuant to a petition filed if the 
        Secretary determines that--
                    (A) a significant number or proportion of the 
                service workers at an employment site where a group of 
                workers has been certified by the Secretary as eligible 
                to apply for adjustment assistance under this part 
                pursuant to paragraph (1) have become totally or 
                partially separated from employment, or are threatened 
                to become totally or partially separated; and
                    (B) a loss of business in the firm providing 
                service workers to an employment site is directly 
                attributable to one or more of the documented 
                occurrences listed in paragraph (1)(C).
    (c) Authority to Investigate and Collect Information.--
            (1) In general.--The Secretary shall, in determining 
        whether to certify a group of workers under subsection (d), 
        obtain information the Secretary determines to be necessary to 
        make the certification, through questionnaires and in such 
        other manner as the Secretary determines appropriate from--
                    (A) the workers' employer;
                    (B) officials of certified or recognized unions or 
                other duly authorized representatives of the group of 
                workers; or
                    (C) one-stop operators or one-stop partners (as 
                defined in section 101 of the Workforce Investment Act 
                of 1998 (29 U.S.C. 2801)); or
            (2) Verification of information.--The Secretary shall 
        require an employer, union, or one-stop operator or partner to 
        certify all information obtained under paragraph (1) from the 
        employer, union, or one-stop operator or partner (as the case 
        may be) on which the Secretary relies in making a determination 
        under subsection (d), unless the Secretary has a reasonable 
        basis for determining that such information is accurate and 
        complete without being certified.
            (3) Protection of confidential information.--The Secretary 
        may not release information obtained under paragraph (1) that 
        the Secretary considers to be confidential business information 
        unless the employer submitting the confidential business 
        information had notice, at the time of submission, that the 
        information would be released by the Secretary, or the employer 
        subsequently consents to the release of the information. 
        Nothing in this paragraph shall be construed to prohibit the 
        Secretary from providing such confidential business information 
        to a court in camera or to another party under a protective 
        order issued by a court.
    (d) Determination by the Secretary of Labor.--
            (1) In general.--As soon as possible after the date on 
        which a petition is filed under subsection (a), but in any 
        event not later than 40 days after that date, the Secretary, in 
        consultation with the Secretary of Energy and the 
        Administrator, as necessary, shall determine whether the 
        petitioning group meets the requirements of subsection (b) and 
        shall issue a certification of eligibility to apply for 
        assistance under this part covering workers in any group which 
        meets such requirements. Each certification shall specify the 
        date on which the total or partial separation began or 
        threatened to begin. Upon reaching a determination on a 
        petition, the Secretary shall promptly publish a summary of the 
        determination in the Federal Register and on the website of the 
        Department of Labor, together with the Secretary's reasons for 
        making such determination.
            (2) One year limitation.--A certification under this 
        section shall not apply to any worker whose last total or 
        partial separation from the employment site before the worker's 
        application under section 426(a) occurred more than 1 year 
        before the date of the petition on which such certification was 
        granted.
            (3) Revocation of certification.--Whenever the Secretary 
        determines, with respect to any certification of eligibility of 
        the workers of an employment site, that total or partial 
        separations from such site are no longer a result of the 
        factors specified in subsection (b)(1), the Secretary shall 
        terminate such certification and promptly have notice of such 
        termination published in the Federal Register and on the 
        website of the Department of Labor, together with the 
        Secretary's reasons for making such determination. Such 
        termination shall apply only with respect to total or partial 
        separations occurring after the termination date specified by 
        the Secretary.
    (e) Industry Notification of Assistance.--Upon receiving a 
notification of a determination under subsection (d) with respect to a 
domestic industry the Secretary of Labor shall notify the 
representatives of the domestic industry affected by the determination, 
employers publicly identified by name during the course of the 
proceeding relating to the determination, and any certified or 
recognized union or, to the extent practicable, other duly authorized 
representative of workers employed by such representatives of the 
domestic industry, of--
            (1) the adjustment allowances, training, and other benefits 
        available under this part;
            (2) the manner in which to file a petition and apply for 
        such benefits; and
            (3) the availability of assistance in filing such 
        petitions;
            (4) notify the Governor of each State in which one or more 
        employers in such industry are located of the Secretary's 
        determination and the identity of the employers; and
            (5) upon request, provide any assistance that is necessary 
        to file a petition under subsection (a).
    (f) Benefit Information to Workers, Providers of Training.--
            (1) In general.--The Secretary shall provide full 
        information to workers about the adjustment allowances, 
        training, and other benefits available under this part and 
        about the petition and application procedures, and the 
        appropriate filing dates, for such allowances, training and 
        services. The Secretary shall provide whatever assistance is 
        necessary to enable groups of workers to prepare petitions or 
        applications for program benefits. The Secretary shall make 
        every effort to insure that cooperating State agencies fully 
        comply with the agreements entered into under section 426(a) 
        and shall periodically review such compliance. The Secretary 
        shall inform the State Board for Vocational Education or 
        equivalent agency, the one-stop operators or one-stop partners 
        (as defined in section 101 of the Workforce Investment Act of 
        1998 (29 U.S.C. 2801), and other public or private agencies, 
        institutions, and employers, as appropriate, of each 
        certification issued under subsection (d) and of projections, 
        if available, of the needs for training under as a result of 
        such certification.
            (2) Notice by mail.--The Secretary shall provide written 
        notice through the mail of the benefits available under this 
        part to each worker whom the Secretary has reason to believe is 
        covered by a certification made under subsection (d)--
                    (A) at the time such certification is made, if the 
                worker was partially or totally separated from the 
                adversely affected employment before such 
                certification, or--
                    (B) at the time of the total or partial separation 
                of the worker from the adversely affected employment, 
                if subparagraph (A) does not apply.
            (3) Newspapers; website.--The Secretary shall publish 
        notice of the benefits available under this part to workers 
        covered by each certification made under subsection (d) in 
        newspapers of general circulation in the areas in which such 
        workers reside and shall make such information available on the 
        website of the Department of Labor.

SEC. 426. PROGRAM BENEFITS.

    (a) Climate Change Adjustment Allowance.--
            (1) Eligibility.--Payment of a climate change adjustment 
        allowance shall be made to an adversely affected worker covered 
        by a certification under section 425(b) who files an 
        application for such allowance for any week of unemployment 
        which begins on or after the date of such certification, if the 
        following conditions are met:
                    (A) Such worker's total or partial separation 
                before the worker's application under this part 
                occurred--
                            (i) on or after the date, as specified in 
                        the certification under which the worker is 
                        covered, on which total or partial separation 
                        began or threatened to begin in the adversely 
                        affected employment;
                            (ii) before the expiration of the 2-year 
                        period beginning on the date on which the 
                        determination under section 425(d) was made; 
                        and
                            (iii) before the termination date, if any, 
                        determined pursuant to section 425(d)(3).
                    (B) Such worker had, in the 52-week period ending 
                with the week in which such total or partial separation 
                occurred, at least 26 weeks of full-time employment or 
                1,040 hours of part time employment in adversely 
                affected employment, or, if data with respect to weeks 
                of employment are not available, equivalent amounts of 
                employment computed under regulations prescribed by the 
                Secretary. For the purposes of this paragraph, any week 
                in which such worker--
                            (i) is on employer-authorized leave for 
                        purposes of vacation, sickness, injury, 
                        maternity, or inactive duty or active duty 
                        military service for training;
                            (ii) does not work because of a disability 
                        that is compensable under a workmen's 
                        compensation law or plan of a State or the 
                        United States;
                            (iii) had his employment interrupted in 
                        order to serve as a full-time representative of 
                        a labor organization in such firm; or
                            (iv) is on call-up for purposes of active 
                        duty in a reserve status in the Armed Forces of 
                        the United States, provided such active duty is 
                        ``Federal service'' as defined in section 
                        8521(a)(1) of title 5, United States Code,
                shall be treated as a week of employment.
                    (C) Such worker is enrolled in a training program 
                approved by the Secretary under subsection (b)(2).
            (2) Ineligibility for certain other benefits.--An adversely 
        affected worker receiving a payment under this section shall be 
        ineligible to receive any other form of unemployment insurance 
        for the period in which such worker is receiving a climate 
        change adjustment allowance under this section.
            (3) Revocation.--If--
                    (A) the Secretary determines that--
                            (i) the adversely affected worker--
                                    (I) has failed to begin 
                                participation in the training program 
                                the enrollment in which meets the 
                                requirement of paragraph (1)(C); or
                                    (II) has ceased to participate in 
                                such training program before completing 
                                such training program; and
                            (ii) there is no justifiable cause for such 
                        failure or cessation; or
                    (B) the certification made with respect to such 
                worker under section 425(d) is revoked under paragraph 
                (3) of such section,
        no adjustment allowance may be paid to the adversely affected 
        worker under this part for the week in which such failure, 
        cessation, or revocation occurred, or any succeeding week, 
        until the adversely affected worker begins or resumes 
        participation in a training program approved by the Secretary 
        under section (b)(2).
            (4) Waivers of training requirements.--The Secretary may 
        issue a written statement to an adversely affected worker 
        waiving the requirement to be enrolled in training described in 
        subsection (b)(2) if the Secretary determines that it is not 
        feasible or appropriate for the worker, because of 1 or more of 
        the following reasons:
                    (A) Recall.--The worker has been notified that the 
                worker will be recalled by the employer from which the 
                separation occurred.
                    (B) Marketable skills.--
                            (i) In general.--The worker possesses 
                        marketable skills for suitable employment (as 
                        determined pursuant to an assessment of the 
                        worker, which may include the profiling system 
                        under section 303(j) of the Social Security Act 
                        (42 U.S.C. 503(j)), carried out in accordance 
                        with guidelines issued by the Secretary) and 
                        there is a reasonable expectation of employment 
                        at equivalent wages in the foreseeable future.
                            (ii) Marketable skills defined.--For 
                        purposes of clause (i), the term ``marketable 
                        skills'' may include the possession of a 
                        postgraduate degree from an institution of 
                        higher education (as defined in section 102 of 
                        the Higher Education Act of 1965 (20 U.S.C. 
                        1002)) or an equivalent institution, or the 
                        possession of an equivalent postgraduate 
                        certification in a specialized field.
                    (C) Retirement.--The worker is within 2 years of 
                meeting all requirements for entitlement to either--
                            (i) old-age insurance benefits under title 
                        II of the Social Security Act (42 U.S.C. 401 et 
                        seq.) (except for application therefor); or
                            (ii) a private pension sponsored by an 
                        employer or labor organization.
                    (D) Health.--The worker is unable to participate in 
                training due to the health of the worker, except that a 
                waiver under this subparagraph shall not be construed 
                to exempt a worker from requirements relating to the 
                availability for work, active search for work, or 
                refusal to accept work under Federal or State 
                unemployment compensation laws.
                    (E) Enrollment unavailable.--The first available 
                enrollment date for the training of the worker is 
                within 60 days after the date of the determination made 
                under this paragraph, or, if later, there are 
                extenuating circumstances for the delay in enrollment, 
                as determined pursuant to guidelines issued by the 
                Secretary.
                    (F) Training not available.--Training described in 
                subsection (b)(2) is not reasonably available to the 
                worker from either governmental agencies or private 
                sources (which may include area career and technical 
                education schools, as defined in section 3 of the Carl 
                D. Perkins Career and Technical Education Act of 2006 
                (20 U.S.C. 2302), and employers), no training that is 
                suitable for the worker is available at a reasonable 
                cost, or no training funds are available.
            (5) Weekly amounts.--The climate change adjustment 
        allowance payable to an adversely affected worker for a week of 
        unemployment shall be an amount equal to 70 percent of the 
        average weekly wage of such worker, but in no case shall such 
        amount exceed the average weekly wage for all workers in the 
        State where the adversely affected worker resides.
            (6) Maximum duration of benefits.--An eligible worker may 
        receive a climate change adjustment allowance under this 
        subsection for a period of not longer than 156 weeks.
    (b) Employment Services and Training.--
            (1) Information and employment services.--The Secretary 
        shall make available, directly or through agreements with the 
        States under section 427(a) to adversely affected workers 
        covered by a certification under section 425(a) the following 
        information and employment services:
                    (A) Comprehensive and specialized assessment of 
                skill levels and service needs, including through--
                            (i) diagnostic testing and use of other 
                        assessment tools; and
                            (ii) in-depth interviewing and evaluation 
                        to identify employment barriers and appropriate 
                        employment goals.
                    (B) Development of an individual employment plan to 
                identify employment goals and objectives, and 
                appropriate training to achieve those goals and 
                objectives.
                    (C) Information on training available in local and 
                regional areas, information on individual counseling to 
                determine which training is suitable training, and 
                information on how to apply for such training.
                    (D) Information on training programs and other 
                services provided by a State pursuant to title I of the 
                Workforce Investment Act of 1998 and available in local 
                and regional areas, information on individual 
                counseling to determine which training is suitable 
                training, and information on how to apply for such 
                training.
                    (E) Information on how to apply for financial aid, 
                including referring workers to educational opportunity 
                centers described in section 402F of the Higher 
                Education Act of 1965 (20 U.S.C. 1070a-16), where 
                applicable, and notifying workers that the workers may 
                request financial aid administrators at institutions of 
                higher education (as defined in section 102 of such Act 
                (20 U.S.C. 1002)) to use the administrators' discretion 
                under section 479A of such Act (20 U.S.C. 1087tt) to 
                use current year income data, rather than preceding 
                year income data, for determining the amount of need of 
                the workers for Federal financial assistance under 
                title IV of such Act (20 U.S.C. 1070 et seq.).
                    (F) Short-term prevocational services, including 
                development of learning skills, communications skills, 
                interviewing skills, punctuality, personal maintenance 
                skills, and professional conduct to prepare individuals 
                for employment or training.
                    (G) Individual career counseling, including job 
                search and placement counseling, during the period in 
                which the individual is receiving a climate change 
                adjustment allowance or training under this part, and 
                after receiving such training for purposes of job 
                placement.
                    (H) Provision of employment statistics information, 
                including the provision of accurate information 
                relating to local, regional, and national labor market 
                areas, including--
                            (i) job vacancy listings in such labor 
                        market areas;
                            (ii) information on jobs skills necessary 
                        to obtain jobs identified in job vacancy 
                        listings described in subparagraph (A);
                            (iii) information relating to local 
                        occupations that are in demand and earnings 
                        potential of such occupations; and
                            (iv) skills requirements for local 
                        occupations described in subparagraph (C).
                    (I) Information relating to the availability of 
                supportive services, including services relating to 
                child care, transportation, dependent care, housing 
                assistance, and need-related payments that are 
                necessary to enable an individual to participate in 
                training.
            (2) Training.--
                    (A) Approval of and payment for training.--If the 
                Secretary determines, with respect to an adversely 
                affected worker that--
                            (i) there is no suitable employment (which 
                        may include technical and professional 
                        employment) available for an adversely affected 
                        worker;
                            (ii) the worker would benefit from 
                        appropriate training;
                            (iii) there is a reasonable expectation of 
                        employment following completion of such 
                        training;
                            (iv) training approved by the Secretary is 
                        reasonably available to the worker from either 
                        governmental agencies or private sources 
                        (including area career and technical education 
                        schools, as defined in section 3 of the Carl D. 
                        Perkins Career and Technical Education Act of 
                        2006, and employers);
                            (v) the worker is qualified to undertake 
                        and complete such training; and
                            (vi) such training is suitable for the 
                        worker and available at a reasonable cost,
                the Secretary shall approve such training for the 
                worker. Upon such approval, the worker shall be 
                entitled to have payment of the costs of such training 
                (subject to the limitations imposed by this section) 
                paid on the worker's behalf by the Secretary directly 
                or through a voucher system.
                    (B) Distribution.--The Secretary shall establish 
                procedures for the distribution of the funds to States 
                to carry out the training programs approved under this 
                paragraph, and shall make an initial distribution of 
                the funds made available as soon as practicable after 
                the beginning of each fiscal year.
                    (C) Additional rules regarding approval of and 
                payment for training.--
                            (i) For purposes of applying subparagraph 
                        (A)(iii), a reasonable expectation of 
                        employment does not require that employment 
                        opportunities for a worker be available, or 
                        offered, immediately upon the completion of 
                        training approved under such subparagraph.
                            (ii) If the costs of training an adversely 
                        affected worker are paid by the Secretary under 
                        subparagraph (A), no other payment for such 
                        costs may be made under any other provision of 
                        Federal law. No payment may be made under 
                        subparagraph (A) of the costs of training an 
                        adversely affected worker or an adversely 
                        affected incumbent worker if such costs--
                                    (I) have already been paid under 
                                any other provision of Federal law; or
                                    (II) are reimbursable under any 
                                other provision of Federal law and a 
                                portion of such costs have already been 
                                paid under such other provision of 
                                Federal law.
                        The provisions of this clause shall not apply 
                        to, or take into account, any funds provided 
                        under any other provision of Federal law which 
                        are used for any purpose other than the direct 
                        payment of the costs incurred in training a 
                        particular adversely affected worker, even if 
                        such use has the effect of indirectly paying or 
                        reducing any portion of the costs involved in 
                        training the adversely affected worker.
                    (D) Training programs.--The training programs that 
                may be approved under subparagraph (A) include--
                            (i) employer-based training, including--
                                    (I) on-the-job training if approved 
                                by the Secretary under subsection (c); 
                                and
                                    (II) joint labor-management 
                                apprenticeship programs;
                            (ii) any training program provided by a 
                        State pursuant to title I of the Workforce 
                        Investment Act of 1998;
                            (iii) any training program approved by a 
                        private industry council established under 
                        section 102 of such Act;
                            (iv) any programs in career and technical 
                        education described in section 3(5) of the Carl 
                        D. Perkins Career and Technical Education Act 
                        of 2006;
                            (v) any program of remedial education;
                            (vi) any program of prerequisite education 
                        or coursework required to enroll in training 
                        that may be approved under this paragraph;
                            (vii) any training program for which all, 
                        or any portion, of the costs of training the 
                        worker are paid--
                                    (I) under any Federal or State 
                                program other than this part; or
                                    (II) from any source other than 
                                this part;
                            (viii) any training program or coursework 
                        at an accredited institution of higher 
                        education (described in section 102 of the 
                        Higher Education Act of 1965 (20 U.S.C. 1002)), 
                        including a training program or coursework for 
                        the purpose of--
                                    (I) obtaining a degree or 
                                certification; or
                                    (II) completing a degree or 
                                certification that the worker had 
                                previously begun at an accredited 
                                institution of higher education; and
                            (ix) any other training program approved by 
                        the Secretary.
    (3) Supplemental assistance.--The Secretary may, as appropriate, 
authorize supplemental assistance that is necessary to defray 
reasonable transportation and subsistence expenses for separate 
maintenance in a case in which training for a worker is provided in a 
facility that is not within commuting distance of the regular place of 
residence of the worker.
    (c) On-the-Job Training Requirements.--
            (1) In general.--The Secretary may approve on-the-job 
        training for any adversely affected worker if--
                    (A) the Secretary determines that on-the-job 
                training--
                            (i) can reasonably be expected to lead to 
                        suitable employment with the employer offering 
                        the on-the-job training;
                            (ii) is compatible with the skills of the 
                        worker;
                            (iii) includes a curriculum through which 
                        the worker will gain the knowledge or skills to 
                        become proficient in the job for which the 
                        worker is being trained; and
                            (iv) can be measured by benchmarks that 
                        indicate that the worker is gaining such 
                        knowledge or skills; and
                    (B) the State determines that the on-the-job 
                training program meets the requirements of clauses 
                (iii) and (iv) of subparagraph (A).
            (2) Monthly payments.--The Secretary shall pay the costs of 
        on-the-job training approved under paragraph (1) in monthly 
        installments.
            (3) Contracts for on-the-job training.--
                    (A) In general.--The Secretary shall ensure, in 
                entering into a contract with an employer to provide 
                on-the-job training to a worker under this subsection, 
                that the skill requirements of the job for which the 
                worker is being trained, the academic and occupational 
                skill level of the worker, and the work experience of 
                the worker are taken into consideration.
                    (B) Term of contract.--Training under any such 
                contract shall be limited to the period of time 
                required for the worker receiving on-the-job training 
                to become proficient in the job for which the worker is 
                being trained, but may not exceed 156 weeks in any 
                case.
            (4) Exclusion of certain employers.--The Secretary shall 
        not enter into a contract for on-the-job training with an 
        employer that exhibits a pattern of failing to provide workers 
        receiving on-the-job training from the employer with--
                    (A) continued, long-term employment as regular 
                employees; and
                    (B) wages, benefits, and working conditions that 
                are equivalent to the wages, benefits, and working 
                conditions provided to regular employees who have 
                worked a similar period of time and are doing the same 
                type of work as workers receiving on-the-job training 
                from the employer.
    (d) Administrative and Employment Services Funding.--
            (1) Administrative funding.--In addition to any funds made 
        available to a State to carry out this section for a fiscal 
        year, the State shall receive for the fiscal year a payment in 
        an amount that is equal to 15 percent of the amount of such 
        funds and shall--
                    (A) use not more than \2/3\ of such payment for the 
                administration of the climate change adjustment 
                assistance for workers program under this part, 
                including for--
                            (i) processing waivers of training 
                        requirements under subsection (a)(4);
                            (ii) collecting, validating, and reporting 
                        data required under this part; and
                            (iii) administering the Climate Change 
                        Adjustment Assistance Allowance payments; and
                    (B) use not less than \1/3\ of such payment for 
                information and employment services under subsection 
                (b)(1).
            (2) Employment services funding.--
                    (A) In general.--In addition to any funds made 
                available to a State to carry out subsection (b)(2) and 
                the payment under paragraph (1) for a fiscal year, the 
                Secretary shall provide to the State for the fiscal 
                year a reasonable payment for the purpose of providing 
                employment and services under subsection (b)(1).
                    (B) Voluntary return of funds.--A State that 
                receives a payment under subparagraph (A) may decline 
                or otherwise return such payment to the Secretary.
    (e) Job Search Allowances.--The Secretary of Labor may provide 
adversely affected workers a one-time job search allowance in 
accordance with regulations prescribed by the Secretary. Any job search 
allowance provided shall be available only under the following 
circumstances and conditions:
            (1) The worker is no longer eligible for the climate change 
        adjustment allowance under subsection (a) and has completed the 
        training program required by subsection (a)(1)(E).
            (2) The Secretary determines that the worker cannot 
        reasonably be expected to secure suitable employment in the 
        commuting area in which the worker resides.
            (3) An allowance granted shall provide reimbursement to the 
        worker of all necessary job search expenses as prescribed by 
        the Secretary in regulations. Such reimbursement under this 
        subsection may not exceed $1,500 for any worker.
    (f) Relocation Allowance Authorized.--
            (1) In general.--Any adversely affected worker covered by a 
        certification issued under section 425 may file an application 
        for a relocation allowance with the Secretary, and the 
        Secretary may grant the relocation allowance, subject to the 
        terms and conditions of this subsection.
            (2) Conditions for granting allowance.--A relocation 
        allowance may be granted if all of the following terms and 
        conditions are met:
                    (A) Assist an adversely affected worker.--The 
                relocation allowance will assist an adversely affected 
                worker in relocating within the United States.
                    (B) Local employment not available.--The Secretary 
                determines that the worker cannot reasonably be 
                expected to secure suitable employment in the commuting 
                area in which the worker resides.
                    (C) Total separation.--The worker is totally 
                separated from employment at the time relocation 
                commences.
                    (D) Suitable employment obtained.--The worker--
                            (i) has obtained suitable employment 
                        affording a reasonable expectation of long-term 
                        duration in the area in which the worker wishes 
                        to relocate; or
                            (ii) has obtained a bona fide offer of such 
                        employment.
                    (E) Application.--The worker filed an application 
                with the Secretary at such time and in such manner as 
                the Secretary shall specify by regulation.
            (3) Amount of allowance.--The relocation allowance granted 
        to a worker under paragraph (1) includes--
                    (A) all reasonable and necessary expenses 
                (including, subsistence and transportation expenses at 
                levels not exceeding amounts prescribed by the 
                Secretary in regulations) incurred in transporting the 
                worker, the worker's family, and household effects; and
                    (B) a lump sum equivalent to 3 times the worker's 
                average weekly wage, up to a maximum payment of $1,500.
            (4) Limitations.--A relocation allowance may not be granted 
        to a worker unless--
                    (A) the relocation occurs within 182 days after the 
                filing of the application for relocation assistance; or
                    (B) the relocation occurs within 182 days after the 
                conclusion of training, if the worker entered a 
                training program approved by the Secretary under 
                subsection (b)(2).
    (g) Health Insurance Continuation.--Not later than 1 year after the 
date of enactment of this part, the Secretary of Labor shall prescribe 
regulations to provide, for the period in which an adversely affected 
worker is participating in a training program described in subsection 
(b)(2), 80 percent of the monthly premium of any health insurance 
coverage that an adversely affected worker was receiving from such 
worker's employer prior to the separation from employment described in 
section 425(b), to be paid to any health care insurance plan designated 
by the adversely affected worker receiving an allowance under this 
section.

SEC. 427. GENERAL PROVISIONS.

    (a) Agreements With States.--
            (1) In general.--The Secretary is authorized on behalf of 
        the United States to enter into an agreement with any State, or 
        with any State agency (referred to in this section as 
        ``cooperating States'' and ``cooperating States agencies'' 
        respectively). Under such an agreement, the cooperating State 
        agency--
                    (A) as agent of the United States, shall receive 
                applications for, and shall provide, payments on the 
                basis provided in this part;
                    (B) in accordance with paragraph (6), shall make 
                available to adversely affected workers covered by a 
                certification under section 425(d) the employment 
                services described in section 426(b)(1);
                    (C) shall make any certifications required under 
                section 425(d);
                    (D) shall otherwise cooperate with the Secretary 
                and with other State and Federal agencies in providing 
                payments and services under this part.
        Each agreement under this section shall provide the terms and 
        conditions upon which the agreement may be amended, suspended, 
        or terminated.
            (2) Form and manner of data.--Each agreement under this 
        section shall--
                    (A) provide the Secretary with the authority to 
                collect any data the Secretary determines necessary to 
                meet the requirements of this part; and
                    (B) specify the form and manner in which any such 
                data requested by the Secretary shall be reported.
            (3) Relationship to unemployment insurance.--Each agreement 
        under this section shall provide that an adversely affected 
        worker receiving a climate change adjustment allowance under 
        this part shall not be eligible for unemployment insurance 
        otherwise payable to such worker under the laws of the State.
            (4) Review.--A determination by a cooperating State agency 
        with respect to entitlement to program benefits under an 
        agreement is subject to review in the same manner and to the 
        same extent as determinations under the applicable State law 
        and only in that manner and to that extent.
            (5) Coordination.--Any agreement entered into under this 
        section shall provide for the coordination of the 
        administration of the provisions for employment services, 
        training, and supplemental assistance under section 426 and 
        under title I of the Workforce Investment Act of 1998 upon such 
        terms and conditions as are established by the Secretary in 
        consultation with the States and set forth in such agreement. 
        Any agency of the State jointly administering such provisions 
        under such agreement shall be considered to be a cooperating 
        State agency for purposes of this part.
            (6) Responsibilities of cooperating agencies.--Each 
        cooperating State agency shall, in carrying out paragraph 
        (1)(B)--
                    (A) advise each worker who applies for unemployment 
                insurance of the benefits under this part and the 
                procedures and deadlines for applying for such 
                benefits;
                    (B) facilitate the early filing of petitions under 
                section 425(a) for any workers that the agency 
                considers are likely to be eligible for benefits under 
                this part;
                    (C) advise each adversely affected worker to apply 
                for training under section 426(b) before, or at the 
                same time, the worker applies for climate change 
                adjustment allowances under section 426(a);
                    (D) perform outreach to, intake of, and orientation 
                for adversely affected workers and adversely affected 
                incumbent workers covered by a certification under 
                section 426(a) with respect to assistance and benefits 
                available under this part;
                    (E) make employment services described in section 
                426(b)(1) available to adversely affected workers and 
                adversely affected incumbent workers covered by a 
                certification under section 425(d) and, if funds 
                provided to carry out this part are insufficient to 
                make such services available, make arrangements to make 
                such services available through other Federal programs; 
                and
                    (F) provide the benefits and reemployment services 
                under this part in a manner that is necessary for the 
                proper and efficient administration of this part, 
                including the use of state agency personnel employed in 
                accordance with a merit system of personnel 
                administration standards, including--
                            (i) making determinations of eligibility 
                        for, and payment of, climate change 
                        readjustment allowances and health care benefit 
                        replacement amounts;
                            (ii) developing recommendations regarding 
                        payments as a bridge to retirement and lump sum 
                        payments to pension plans in accordance with 
                        this subsection; and
                            (iii) the provision of reemployment 
                        services to eligible workers, including 
                        referral to training services.
            (7) In order to promote the coordination of workforce 
        investment activities in each State with activities carried out 
        under this part, any agreement entered into under this section 
        shall provide that the State shall submit to the Secretary, in 
        such form as the Secretary may require, the description and 
        information described in paragraphs (8) and (14) of section 
        112(b) of the Workforce Investment Act of 1998 (29 U.S.C. 
        2822(b)) and a description of the State's rapid response 
        activities under section 221(a)(2)(A).
            (8) Control measures.--
                    (A) In general.--The Secretary shall require each 
                cooperating State and cooperating State agency to 
                implement effective control measures and to effectively 
                oversee the operation and administration of the climate 
                change adjustment assistance program under this part, 
                including by means of monitoring the operation of 
                control measures to improve the accuracy and timeliness 
                of the data being collected and reported.
                    (B) Definition.--For purposes of subparagraph (A), 
                the term ``control measures'' means measures that--
                            (i) are internal to a system used by a 
                        State to collect data; and
                            (ii) are designed to ensure the accuracy 
                        and verifiability of such data.
            (9) Data reporting.--
                    (A) In general.--Any agreement entered into under 
                this section shall require the cooperating State or 
                cooperating State agency to report to the Secretary on 
                a quarterly basis comprehensive performance 
                accountability data, to consist of--
                            (i) the core indicators of performance 
                        described in subparagraph (B)(i);
                            (ii) the additional indicators of 
                        performance described in subparagraph (B)(ii), 
                        if any; and
                            (iii) a description of efforts made to 
                        improve outcomes for workers under the climate 
                        change adjustment assistance program.
                    (B) Core indicators described.--
                            (i) In general.--The core indicators of 
                        performance described in this subparagraph 
                        are--
                                    (I) the percentage of workers 
                                receiving benefits under this part who 
                                are employed during the second calendar 
                                quarter following the calendar quarter 
                                in which the workers cease receiving 
                                such benefits;
                                    (II) the percentage of such workers 
                                who are employed in each of the third 
                                and fourth calendar quarters following 
                                the calendar quarter in which the 
                                workers cease receiving such benefits; 
                                and
                                    (III) the earnings of such workers 
                                in each of the third and fourth 
                                calendar quarters following the 
                                calendar quarter in which the workers 
                                cease receiving such benefits.
                            (ii) Additional indicators.--The Secretary 
                        and a cooperating State or cooperating State 
                        agency may agree upon additional indicators of 
                        performance for the climate change adjustment 
                        assistance program under this part, as 
                        appropriate.
                    (C) Standards with respect to reliability of 
                data.--In preparing the quarterly report required by 
                subparagraph (A), each cooperating State or cooperating 
                State agency shall establish procedures that are 
                consistent with guidelines to be issued by the 
                Secretary to ensure that the data reported are valid 
                and reliable.
            (10) Verification of eligibility for program benefits.--
                    (A) In general.--An agreement under this section 
                shall provide that the State shall periodically 
                redetermine that a worker receiving benefits under this 
                part who is not a citizen or national of the United 
                States remains in a satisfactory immigration status. 
                Once satisfactory immigration status has been initially 
                verified through the immigration status verification 
                system described in section 1137(d) of the Social 
                Security Act (42 U.S.C. 1320b-7(d)) for purposes of 
                establishing a worker's eligibility for unemployment 
                compensation, the State shall reverify the worker's 
                immigration status if the documentation provided during 
                initial verification will expire during the period in 
                which that worker is potentially eligible to receive 
                benefits under this part. The State shall conduct such 
                redetermination in a timely manner, utilizing the 
                immigration status verification system described in 
                section 1137(d) of the Social Security Act (42 U.S.C. 
                1320b-7(d)).
                    (B) Procedures.--The Secretary shall establish 
                procedures to ensure the uniform application by the 
                States of the requirements of this paragraph.
    (b) Administration Absent State Agreement.--
            (1) In any State where there is no agreement in force 
        between a State or its agency under subsection (a), the 
        Secretary shall promulgate regulations for the performance of 
        all necessary functions under section 426, including provision 
        for a fair hearing for any worker whose application for 
        payments is denied.
            (2) A final determination under paragraph (1) with respect 
        to entitlement to program benefits under section 426 is subject 
        to review by the courts in the same manner and to the same 
        extent as is provided by section 205(g) of the Social Security 
        Act (42 U.S.C. 405(g)).
    (c) Prohibition on Contracting With Private Entities.--Neither the 
Secretary nor a State may contract with any private for-profit or 
nonprofit entity for the administration of the climate change 
adjustment assistance program under this part.
    (d) Payment to the States.--
            (1) In general.--The Secretary shall from time to time 
        certify to the Secretary of the Treasury for payment to each 
        cooperating State the sums necessary to enable such State as 
        agent of the United States to make payments provided for by 
        this part.
            (2) Restriction.--All money paid a State under this 
        subsection shall be used solely for the purposes for which it 
        is paid; and money so paid which is not used for such purposes 
        shall be returned, at the time specified in the agreement under 
        this section, to the Secretary of the Treasury.
            (3) Bonds.--Any agreement under this section may require 
        any officer or employee of the State certifying payments or 
        disbursing funds under the agreement or otherwise participating 
        in the performance of the agreement, to give a surety bond to 
        the United States in such amount as the Secretary may deem 
        necessary, and may provide for the payment of the cost of such 
        bond from funds for carrying out the purposes of this part.
    (e) Labor Standards.--
            (1) Prohibition on displacement.--An individual in an 
        apprenticeship program or on-the-job training program under 
        this part shall not displace (including a partial displacement, 
        such as a reduction in the hours of non-overtime work, wages, 
        or employment benefits) any employed employee.
            (2) Prohibition on impairment of contracts.--An 
        apprenticeship program or on-the-job raining program under this 
        Act shall not impair an existing contract for services or 
        collective bargaining agreement, and no such activity that 
        would be inconsistent with the terms of a collective bargaining 
        agreement shall be undertaken without the written concurrence 
        of the labor organization and employer concerned.
            (3) Additional standards.--The Secretary, or a State acting 
        under an agreement described in subsection (a) may pay the 
        costs of on-the-job training, notwithstanding any other 
        provision of this section, only if--
                    (A) in the case of training which would be 
                inconsistent with the terms of a collective bargaining 
                agreement, the written concurrence of the labor 
                organization concerned has been obtained;
                    (B) the job for which such adversely affected 
                worker is being trained is not being created in a 
                promotional line that will infringe in any way upon the 
                promotional opportunities of currently employed 
                individuals;
                    (C) such training is not for the same occupation 
                from which the worker was separated and with respect to 
                which such worker's group was certified pursuant to 
                section 425(d);
                    (D) the employer is provided reimbursement of not 
                more than 50 percent of the wage rate of the 
                participant, for the cost of providing the training and 
                additional supervision related to the training; and
                    (E) the employer has not received payment under 
                with respect to any other on-the-job training provided 
                by such employer which failed to meet the requirements 
                of subparagraphs (A) through (D).
    (f) Definitions.--As used in this part the following definitions 
apply:
            (1) The term ``adversely affected employment'' means 
        employment at an employment site, if workers at such site are 
        eligible to apply for adjustment assistance under this part.
            (2) The term ``adversely affected worker'' means an 
        individual who has been totally or partially separated from 
        employment and is eligible to apply for adjustment assistance 
        under this part.
            (3) The term ``average weekly wage'' means \1/13\ of the 
        total wages paid to an individual in the quarter in which the 
        individual's total wages were highest among the first 4 of the 
        last 5 completed calendar quarters immediately before the 
        quarter in which occurs the week with respect to which the 
        computation is made. Such week shall be the week in which total 
        separation occurred, or, in cases where partial separation is 
        claimed, an appropriate week, as defined in regulations 
        prescribed by the Secretary.
            (4) The term ``average weekly hours'' means the average 
        hours worked by the individual (excluding overtime) in the 
        employment from which he has been or claims to have been 
        separated in the 52 weeks (excluding weeks during which the 
        individual was sick or on vacation) preceding the week 
        specified in the last sentence of paragraph (4).
            (5) The term ``benefit period'' means, with respect to an 
        individual--
                    (A) the benefit year and any ensuing period, as 
                determined under applicable State law, during which the 
                individual is eligible for regular compensation, 
                additional compensation, or extended compensation; or
                    (B) the equivalent to such a benefit year or 
                ensuing period provided for under the applicable 
                Federal unemployment insurance law.
            (6) The term ``consumer goods manufacturing'' means the 
        electrical equipment, appliance, and component manufacturing 
        industry and transportation equipment manufacturing.
            (7) The term ``employment site'' means a single facility or 
        site of employment.
            (8) The term ``energy-intensive manufacturing industries'' 
        means all industrial sectors, entities, or groups of entities 
        that meet the energy or greenhouse gas intensity criteria in 
        section 765(b)(2)(A)(i) of the Clean Air Act based on the most 
        recent data available.
            (9) The term ``energy producing and transforming 
        industries'' means the coal mining industry, oil and gas 
        extraction, electricity power generation, transmission and 
        distribution, and natural gas distribution.
            (10) The term ``industries dependent on energy industries'' 
        means rail transportation and pipeline transportation.
            (11) The term ``on-the-job training'' means training 
        provided by an employer to an individual who is employed by the 
        employer.
            (12) The terms ``partial separation'' and ``partially 
        separated'' refer, with respect to an individual who has not 
        been totally separated, that such individual has had--
                    (A) his or her hours of work reduced to 80 percent 
                or less of his average weekly hours in adversely 
                affected employment; and
                    (B) his or her wages reduced to 80 percent or less 
                of his average weekly wage in such adversely affected 
                employment.
            (13) The term ``public agency'' means a department or 
        agency of a State or political subdivision of a State or of the 
        Federal government.
            (14) The term ``Secretary'' means the Secretary of Labor.
            (15) The term ``service workers'' means workers supplying 
        support or auxiliary services to an employment site.
            (16) The term ``State agency'' means the agency of the 
        State which administers the State law.
            (17) The term ``State law'' means the unemployment 
        insurance law of the State approved by the Secretary of Labor 
        under section 3304 of the Internal Revenue Code of 1954.
            (18) The terms ``total separation'' and ``totally 
        separated'' refer to the layoff or severance of an individual 
        from employment with an employer in which adversely affected 
        employment exists.
            (19) The term ``unemployment insurance'' means the 
        unemployment compensation payable to an individual under any 
        State law or Federal unemployment compensation law, including 
        chapter 85 of title 5, United States Code, and the Railroad 
        Unemployment Insurance Act. The terms ``regular compensation'', 
        ``additional compensation'', and ``extended compensation'' have 
        the same respective meanings that are given them in section 
        205(2), (3), and (4) of the Federal-State Extended Unemployment 
        Compensation Act of 1970 (26 U.S.C. 3304 note.)
            (20) The term ``week'' means a week as defined in the 
        applicable State law.
            (21) The term ``week of unemployment'' means a week of 
        total, part-total, or partial unemployment as determined under 
        the applicable State law or Federal unemployment insurance law.
    (g) Special Rule With Respect to Military Service.--
            (1) In general.--Notwithstanding any other provision of 
        this part, the Secretary may waive any requirement of this part 
        that the Secretary determines is necessary to ensure that an 
        adversely affected worker who is a member of a reserve 
        component of the Armed Forces and serves a period of duty 
        described in paragraph (2) is eligible to receive a climate 
        change adjustment allowance, training, and other benefits under 
        this part in the same manner and to the same extent as if the 
        worker had not served the period of duty.
            (2) Period of duty described.--An adversely affected worker 
        serves a period of duty described in this paragraph if, before 
        completing training under this part, the worker--
                    (A) serves on active duty for a period of more than 
                30 days under a call or order to active duty of more 
                than 30 days; or
                    (B) in the case of a member of the Army National 
                Guard of the United States or Air National Guard of the 
                United States, performs full-time National Guard duty 
                under section 502(f) of title 32, United States Code, 
                for 30 consecutive days or more when authorized by the 
                President or the Secretary of Defense for the purpose 
                of responding to a national emergency declared by the 
                President and supported by Federal funds.
    (h) Fraud and Recovery of Overpayments.--
            (1) Recovery of payments to which an individual was not 
        entitled.--If the Secretary or a court of competent 
        jurisdiction determines that any person has received any 
        payment under this part to which the individual was not 
        entitled, such individual shall be liable to repay such amount 
        to the Secretary, as the case may be, except that the Secretary 
        shall waive such repayment if such agency or the Secretary 
        determines that--
                    (A) the payment was made without fault on the part 
                of such individual; and
                    (B) requiring such repayment would cause a 
                financial hardship for the individual (or the 
                individual's household, if applicable) when taking into 
                consideration the income and resources reasonably 
                available to the individual (or household) and other 
                ordinary living expenses of the individual (or 
                household).
            (2) Means of recovery.--Unless an overpayment is otherwise 
        recovered, or waived under paragraph (1), the Secretary shall 
        recover the overpayment by deductions from any sums payable to 
        such person under this part, under any Federal unemployment 
        compensation law or other Federal law administered by the 
        Secretary which provides for the payment of assistance or an 
        allowance with respect to unemployment. Any amount recovered 
        under this section shall be returned to the Treasury of the 
        United States.
            (3) Penalties for fraud.--Any person who--
                    (A) makes a false statement of a material fact 
                knowing it to be false, or knowingly fails to disclose 
                a material fact, for the purpose of obtaining or 
                increasing for that person or for any other person any 
                payment authorized to be furnished under this part; or
                    (B) makes a false statement of a material fact 
                knowing it to be false, or knowingly fails to disclose 
                a material fact, when providing information to the 
                Secretary during an investigation of a petition under 
                section 425(c),
shall be imprisoned for not more than one year, or fined under title 
18, United States Code, or both, and be ineligible for any further 
payments under this part.
    (i) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary to carry out the provisions of this part.
    (j) Study on Older Workers.--The Secretary shall conduct a study 
examine the circumstances of older adversely affected workers and the 
ability of such workers to access their retirement benefits. The 
Secretary shall transmit a report to Congress not later than 2 years 
after the date of enactment of this part on the findings of the study 
and the Secretary's recommendations on how to ensure that adversely 
affected workers within 2 years of retirement are able to access their 
retirement benefits.
    [(k) Spending Limit.--For each fiscal year, the total amount of 
funds disbursed for the purposes described in section 426 shall not 
exceed the amount deposited in that fiscal year into the Climate Change 
Worker Assistance Fund established under section [782(j)] of the Clean 
Air Act. The annual spending limit for any succeeding year shall be 
increased by the difference, if any, between the amount of the prior 
year's disbursements and the spending limitation for that year. The 
Secretary shall promulgate rules to ensure that this spending limit is 
not exceeded. Such rules shall provide that workers who receive any of 
the benefits described in section 426 receive full benefits, and shall 
include the establishment of a waiting list for workers in the event 
that the requests for assistance exceed the spending limit.]

                    Subtitle C--Consumer Assistance

SEC. 431. ENERGY REFUND PROGRAM.

    The Social Security Act (42 U.S.C. 201 et seq.) is amended by 
adding at the end the following:

                  ``TITLE XXII--ENERGY REFUND PROGRAM

``SEC. 2201. ENERGY REFUND PROGRAM.

    ``(a) In General.--The Secretary shall formulate and administer the 
program provided for in this section, which shall be known as the 
`Energy Refund Program', and under which eligible low-income households 
are provided cash payments to reimburse the households for the 
estimated loss in their purchasing power resulting from the American 
Clean Energy and Security Act of 2009.
    ``(b) Entitlement of Eligible Households to Cash Payments.--At the 
request of the State agency of a State, each eligible low-income 
household in the State shall be entitled to receive monthly cash 
payments under this section in an amount equal to the monthly energy 
refund amount determined under subsection (d).
    ``(c) Eligibility.--
            ``(1) Eligible households.--A household shall be considered 
        to be an eligible low-income household for purposes of this 
        section if--
                    ``(A) the gross income of the household does not 
                exceed the greater of--
                            ``(i) 150 percent of the poverty line; or
                            ``(ii) the greatest amount of household 
                        gross income in respect of which a benefit 
                        could be payable under subsection (d)(2)(B);
                    ``(B) the State agency of the State in which the 
                household is located determines that the household is 
                participating in--
                            ``(i) the Supplemental Nutrition Assistance 
                        Program authorized by the Food and Nutrition 
                        Act of 2008 (7 U.S.C. 2011 et seq.);
                            ``(ii) the Food Distribution Program on 
                        Indian Reservations authorized by section 4(b) 
                        of such Act (7 U.S.C. 2013(b)); or
                            ``(iii) the program for nutrition 
                        assistance in Puerto Rico or American Samoa 
                        under section 19 of such Act (7 U.S.C. 2028);
                    ``(C) the household consists of a single individual 
                or a married couple, and--
                            ``(i) receives the subsidy described in 
                        section 1860D-14 of this Act (42 U.S.C. 1395w-
                        114); or
                            ``(ii)(I) participates in the program under 
                        title XVIII of this Act; and
                            ``(II) meets the income requirements 
                        described in section 1860D-14(a)(1) or (a)(2) 
                        of this Act (42 U.S.C. 1395w-114(a)(1) or 
                        (a)(2)); or
                    ``(D) the household consists of a single individual 
                or a married couple, and receives benefits under the 
                supplemental security income program under title XVI of 
                this Act (42 U.S.C. 1381-1383f).
            ``(2) Streamlined participation for certain 
        beneficiaries.--The Secretary shall--
                    ``(A) periodically estimate the number of eligible 
                beneficiaries and households, and the number of 
                participating beneficiaries and households, for the 
                Energy Refund Program; and
                    ``(B) develop procedures, in consultation with the 
                Commissioner of Social Security, the Railroad 
                Retirement Board, the Secretary of Veterans Affairs, 
                and the State agencies, to ensure that low-income 
                beneficiaries of the benefit programs administered by 
                such entities receive the energy refund for which the 
                beneficiaries are eligible under the Energy Refund 
                Program.
            ``(3) Limitation.--Notwithstanding any other provision of 
        law, the Secretary shall provide refunds to United States 
        citizens, United States nationals, and individuals lawfully 
        residing in the United States who qualify for a refund under 
        paragraph (1)(A), and shall establish procedures to ensure that 
        other individuals do not receive refunds.
            ``(4) National standards.--The Secretary shall consult with 
        the Secretary of Agriculture and establish uniform national 
        standards of eligibility ensuring that States may seamlessly 
        co-administer the energy refund program with the Supplemental 
        Nutrition Assistance Program in accordance with the provisions 
        of this section. No State agency shall impose any other 
        standard or requirement as a condition of eligibility or refund 
        receipt under the program. Assistance in the Energy Refund 
        Program shall be furnished promptly to all eligible households 
        who make application for such participation or are already 
        enrolled in any program referred to in paragraph (1).
    ``(d) Monthly Energy Refund Amount.--
            ``(1) Estimated annual total loss in purchasing power.--Not 
        later than August 31 of each fiscal year, the Energy 
        Information Administration shall estimate the annual total loss 
        in purchasing power that will result from American Clean Energy 
        and Security Act of 2009 in the next fiscal year for households 
        of each size with gross income equal to 150 percent of the 
        poverty line, based on the projected total market value of all 
        compliance costs (including, but not limited to, the emissions 
        allowances used to demonstrate compliance with title VII of the 
        Clean Air Act in the next fiscal year, and excluding costs that 
        are not projected to be incurred by households as a result of 
        allowances freely allocated and intended for residential 
        consumer assistance pursuant to sections 783 through 785 of the 
        Clean Air Act), in a way generally recognized as suitable by 
        experts.
            ``(2) Monthly energy refund.--The monthly energy refund 
        amount for an eligible household under this section shall be--
                    ``(A) if the gross income of the household does not 
                exceed 150 percent of the poverty line applicable to 
                the household--
                            ``(i) if the household has 1, 2, 3, or 4 
                        members, \1/12\ of the amount estimated under 
                        paragraph (1) for a household of the same size, 
                        rounded to the nearest whole dollar amount; or
                            ``(ii) if the household has 5 or more 
                        members, \1/12\ of the arithmetic mean value of 
                        the amounts estimated under paragraph (1) for 
                        households with 5 or more members, rounded to 
                        the nearest whole dollar amount; or
                    ``(B) if the gross income of the household exceeds 
                150 percent of the poverty line applicable to the 
                household, \1/12\ of the amount (if any) by which--
                            ``(i) the amount estimated under paragraph 
                        (1) for a household of the same size; exceeds
                            ``(ii) 20 percent of the amount by which 
                        the gross income of the household exceeds 150 
                        percent of the poverty line.
    ``(e) Delivery Mechanism.--
            ``(1) Subject to standards and an implementation schedule 
        set by the Secretary, the energy refund shall be provided in 
        monthly installments via--
                    ``(A) direct deposit into the eligible household's 
                designated bank account;
                    ``(B) the State's electronic benefit transfer 
                system; or
                    ``(C) another Federal or State mechanism, if such a 
                mechanism is approved by the Secretary.
            ``(2) Such standards shall include--
                    ``(A)(i) defining the required level of recipient 
                protection regarding privacy;
                    ``(ii) guidance on how recipients are offered 
                choices, when relevant, about the delivery mechanism;
                    ``(iii) guidance on ease of use and access to the 
                refund, including the prohibition of fees charged to 
                recipients for withdrawals or other services; and
                    ``(iv) cost-effective protections against improper 
                accessing of the energy refund;
                    ``(B) operating standards that provide for 
                interoperability between States and law enforcement 
                monitoring; and
                    ``(C) other standards, as determined by the 
                Secretary or the Secretary's designee.
    ``(f) Administration.--
            ``(1) In general.--The State agency of each participating 
        State shall assume responsibility for the certification of 
        applicant households and for the issuance of refunds and the 
        control and accountability thereof.
            ``(2) Procedures.--Under standards established by the 
        Secretary, the State agency shall establish procedures 
        governing the administration of the Energy Refund Program that 
        the State agency determines best serve households in the State, 
        including households with special needs, such as households 
        with elderly or disabled members, households in rural areas, 
        homeless individuals, and households residing on reservations 
        as defined in the Indian Child Welfare Act of 1978 and the 
        Indian Financing Act of 1974. In carrying out this paragraph, a 
        State agency--
                    ``(A) shall provide timely, accurate, and fair 
                service to applicants for, and participants in, the 
                Energy Refund Program;
                    ``(B) shall permit an applicant household to apply 
                to participate in the program at the time that the 
                household first contacts the State agency, and shall 
                consider an application that contains the name, 
                address, and signature of the applicant to be 
                sufficient to constitute an application for 
                participation;
                    ``(C) shall screen any applicant household for the 
                Supplemental Nutrition Assistance Program, the State's 
                medical assistance program under section XIX of this 
                Act, State Childrens Health Insurance Program under 
                section XXI of this Act, and a State program that 
                provides basic assistance under a State program funded 
                under title IV of this Act or with qualified State 
                expenditures as defined in section 409(a)(7) of this 
                Act for eligibility for the Energy Refund Program and, 
                if eligible, shall enroll such applicant household in 
                the Energy Refund Program;
                    ``(D) shall complete certification of and provide a 
                refund to any eligible household not later than 30 days 
                following its filing of an application;
                    ``(E) shall use appropriate bilingual personnel and 
                materials in the administration of the program in those 
                portions of the State in which a substantial number of 
                members of low-income households speak a language other 
                than English; and
                    ``(F) shall utilize State agency personnel who are 
                employed in accordance with the current standards for a 
                Merit System of Personnel Administration or any 
                standards later prescribed by the Office of Personnel 
                Management pursuant to section 208 of the 
                Intergovernmental Personnel Act of 1970 (42 U.S.C. 
                4728) modifying or superseding such standards relating 
                to the establishment and maintenance of personnel 
                standards on a merit basis to make all tentative and 
                final determinations of eligibility and ineligibility.
            ``(3) Regulations.--
                    ``(A) Except as provided in subparagraph (B), the 
                Secretary shall issue such regulations consistent with 
                this section as the Secretary deems necessary or 
                appropriate for the effective and efficient 
                administration of the Energy Refund Program, and shall 
                promulgate all such regulations in accordance with the 
                procedures set forth in section 553 of title 5, United 
                States Code.
                    ``(B) Without regard to section 553 of title 5 of 
                such Code, the Secretary may, during the period 
                beginning with the effective date of this section and 
                ending 2 years after such date, by rule promulgate as 
                final any procedures that are substantially the same as 
                the procedures governing the Supplemental Nutrition 
                Assistance Program in section 273.2, 273.12, or 273.15 
                of title 7, Code of Federal Regulations.
                    ``(C) Notwithstanding subsection (i)(4), the 
                Secretary may promulgate regulations allowing for 
                streamlined eligibility determinations for some or all 
                households which include individuals receiving 
                assistance under a State plan approved under title XIX 
                or XXI of this Act. The regulations may institute 
                procedures whereby the income and family size 
                information used for determining eligibility under such 
                title XIX or XXI may be the basis for determining 
                eligibility for the Energy Refund Program.
                    ``(D) Notwithstanding any other provision of this 
                section, the Secretary may authorize States to provide 
                benefits under this section on a quarterly basis if the 
                Secretary determines that the amount of the benefits 
                that would be provided on a monthly basis to households 
                is insufficient to be efficiently paid on a monthly 
                basis in light of the administrative expenses of the 
                Energy Refund Program.
    ``(g) Treatment.--The value of the refund provided under this 
section shall not be considered income or resources for any purpose 
under any Federal, State, or local laws, including, but not limited to, 
laws relating to an income tax, or public assistance programs 
(including, but not limited to, health care, cash aid, child care, 
nutrition programs, and housing assistance) and no participating State 
or political subdivision thereof shall decrease any assistance 
otherwise provided an individual or individuals because of the receipt 
of a refund under this section.
    ``(h) Program Integrity.--For purposes of ensuring program 
integrity and complying with the requirements of the Improper Payment 
Information Act of 2002, the Secretary shall, to the maximum extent 
possible, rely on and coordinate with the quality control sample and 
review procedures of paragraphs (2), (3), (4), and (5) of section 16(c) 
of the Food and Nutrition Act of 2008 (7 U.S.C. 2025(c)).
    ``(i) Definitions.--
            ``(1) Secretary.--The term `Secretary' means the Secretary 
        of Health and Human Services or the head of another agency 
        designated by the Secretary of Health and Human Services.
            ``(2) Electronic benefit transfer system.--The term 
        `electronic benefit transfer system' means a system by which 
        household benefits or refunds defined under subsection (e) are 
        issued from and stored in a central databank via electronic 
        benefit transfer cards.
            ``(3) Gross income.--The term `gross income' means the 
        gross income of a household that is determined in accordance 
        with standards and procedures established under section 5 of 
        the Food and Nutrition Act of 2008 (7 U.S.C. 2014) and its 
        implementing regulations.
            ``(4) Household.--
                    ``(A) The term `household' means--
                            ``(i) in subparagraphs (A) and (B) of 
                        subsection (c)(1) of this section, except as 
                        provided in subparagraph (C) of this paragraph, 
                        an individual or a group of individuals who are 
                        a household under section 3(n) of the Food and 
                        Nutrition Act of 2008 (7 U.S.C. 2012(n));
                            ``(ii) in subsection (c)(1)(C) of this 
                        section, a single individual or married couple 
                        that receives benefits under section 1860D-14 
                        of this Act (42 U.S.C. 1395w-114); and
                            ``(iii) in subsection (c)(1)(D) of this 
                        section, a single individual or married couple 
                        that receives benefits under the supplemental 
                        security income program under title XVI of this 
                        Act (42 U.S.C. 1381-1383f).
                    ``(B) The Secretary shall establish rules for 
                providing the energy refund in an equitable and 
                administratively simple manner to households where the 
                group of individuals who live together includes members 
                not all of whom are described in a single clause of 
                subparagraph (A), or includes additional members not 
                described in any such clause.
                    ``(C) The Secretary shall establish rules regarding 
                the eligibility and delivery of the energy refund to 
                groups of individuals described in section 3(n)(4) or 
                (5) of the Food and Nutrition Act of 2008 (7 U.S.C. 
                2012(n)).
            ``(5) Poverty line.--The term `poverty line' has the 
        meaning given the term in section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2)), including any 
        revision required by that section.
            ``(6) State.--The term `State' means the 50 States, the 
        District of Columbia, the Commonwealth of Puerto Rico, American 
        Samoa, the United States Virgin Islands, Guam, and the 
        Commonwealth of the Northern Mariana Islands.
            ``(7) State agency.--The term `State agency' means an 
        agency of State government, including the local offices 
        thereof, that has responsibility for administration of the 1 or 
        more federally aided public assistance programs within the 
        State, and in those States where such assistance programs are 
        operated on a decentralized basis, the term shall include the 
        counterpart local agencies administering such programs.
            ``(8) Other terms.--Other terms not defined in this title 
        shall have the same meaning applied in the Supplemental 
        Nutrition Assistance Program authorized by the Food and 
        Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) unless the 
        Secretary finds for good cause that application of a particular 
        definition would be detrimental to the purposes of the Energy 
        Refund Program.''.

SEC. 432. MODIFICATION OF EARNED INCOME CREDIT AMOUNT FOR INDIVIDUALS 
              WITH NO QUALIFYING CHILDREN.

    (a) Increase in Credit Percentage and Phaseout Percentage for 
Individuals With No Children.--The table contained in subparagraph (A) 
of section 32(b)(1) of the Internal Revenue Code of 1986 is amended by 
striking ``7.65'' each place it appears and inserting ``15.3''.
    (b) Increase in Beginning Phaseout Amount.--
            (1) In general.--The table contained in subparagraph (A) of 
        section 32(b)(2) of such Code is amended by striking ``$5,280'' 
        and inserting ``$13,590''.
            (2) Inflation adjustment.--
                    (A) In general.--Subparagraph (B) of section 
                32(j)(1) of such Code is amended by striking ``and'' at 
                the end of clause (i), by redesignating clause (ii) as 
                clause (iii), and by inserting after clause (i) the 
                following new clause:
                            ``(ii) in the case of the $13,590 amount in 
                        subsection (b)(2)(A), by substituting `calendar 
                        year 2011' for `calendar year 1992' in 
                        subparagraph (B) thereof, and''.
                    (B) Conforming amendments.--
                            (i) Clause (i) of section 32(j)(1)(B) of 
                        such Code is amended by inserting ``except as 
                        provided in clause (ii),'' before ``in the case 
                        of''.
                            (ii) Paragraph (1) of section 32(j) of such 
                        Code is amended by inserting ``(2012 in the 
                        case of the $13,590 amount in subsection 
                        (b)(2)(A))'' after ``1996''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2011.

SEC. 433. PROTECTION OF SOCIAL SECURITY AND MEDICARE TRUST FUNDS.

    (a) OASDI Trust Funds.--Section 201 of the Social Security Act (42 
U.S.C. 401) is amended by adding at the end the following new 
subsection:
    ``(o) The Secretary of the Treasury shall transfer from time to 
time to the Federal Old-Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund, from amounts in the general 
fund of the Treasury that are not otherwise appropriated, such sums as 
the Chief Actuary of the Social Security Administration calculates as 
necessary (and so certifies to such Secretary) for any fiscal year, on 
account of changes in benefit costs and changes in tax revenue 
attributable to the provisions of the American Clean Energy and 
Security Act of 2009 and the amendments made thereby, in order to place 
each of such Trust Funds in the same position at the end of such fiscal 
year as the position in which such Trust Fund would have been if such 
changes had not occurred.''.
    (b) HI Trust Fund.--Section 1817 of such Act (42 U.S.C. 1395i) is 
amended by adding at the end the following new subsection:
    ``(l) Transfers to Account for Changes in Benefit Costs and Changes 
in Tax Revenue Attributable to the American Clean Energy and Security 
Act of 2009.--The Secretary of the Treasury shall transfer from time to 
time to the Trust Fund, from amounts in the general fund of the 
Treasury that are not otherwise appropriated, such sums as the Chief 
Actuary of the Centers for Medicare & Medicaid Services calculates as 
necessary (and so certifies to such Secretary) for any fiscal year, on 
account of changes in benefit costs and changes in tax revenue 
attributable to the provisions of the American Clean Energy and 
Security Act of 2009 and the amendments made thereby, in order to place 
the Trust Fund in the same position at the end of such fiscal year as 
the position in which it would have been if such changes had not 
occurred.''.

                 Subtitle D--Exporting Clean Technology

SEC. 441. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Protecting Americans from the impacts of climate change 
        requires global reductions in greenhouse gas emissions.
            (2) Although developing countries are historically least 
        responsible for the cumulative greenhouse gas emissions that 
        are causing climate change and continue to have very low per 
        capita greenhouse gas emissions, their overall greenhouse gas 
        emissions are increasing as they seek to grow their economies 
        and reduce energy poverty for their populations.
            (3) Many developing countries lack the financial and 
        technical resources to adopt clean energy technologies and 
        absent assistance their greenhouse gas emissions will continue 
        to increase.
            (4) Investments in clean energy technology cooperation can 
        substantially reduce global greenhouse gas emissions while 
        providing developing countries with incentives to adopt 
        policies that will address competitiveness concerns related to 
        regulation of United States greenhouse gas emissions.
            (5) Investments in clean technology in developing countries 
        will increase demand for clean energy products, open up new 
        markets for United States companies, spur innovation, and lower 
        costs.
            (6) Under Article 4 of the United Nations Framework 
        Convention on Climate Change, developed country parties, 
        including the United States, committed to ``take all 
        practicable steps to promote, facilitate, and finance, as 
        appropriate, the transfer of, or access to, environmentally 
        sound technologies and know-how to other parties, particularly 
        developing country parties, to enable them to implement the 
        provisions of the Convention''.
            (7) Under the Bali Action Plan, developed country parties 
        to the United Nations Framework Convention on Climate Change, 
        including the United States, committed to ``enhanced action on 
        the provision of financial resources and investment to support 
        action on mitigation and adaptation and technology 
        cooperation,'' including, inter alia, consideration of 
        ``improved access to adequate, predictable, and sustainable 
        financial resources and financial and technical support, and 
        the provision of new and additional resources, including 
        official and concessional funding for developing country 
        parties''.
            (8) Intellectual property rights are a key driver of 
        investment and research and development in, and the global 
        deployment of, clean technologies.
            (9) Innovative clean technologies, including U.S. and 
        multilateral financing mechanisms for their deployment, are 
        critical to mitigating global warming pollution, preventing 
        catastrophic changes to the climate, and developing robust 
        economies around the world.
            (10) Any weakening of intellectual property rights 
        protection poses a substantial competitive risk to U.S. 
        companies and the creation of high-quality U.S. jobs, 
        inhibiting the creation of new ``green'' employment and the 
        transformational shift to the ``Green Economy'' of the 21st 
        Century.
            (11) Any U.S. funding directed toward assisting developing 
        countries with regard to exporting clean technology should 
        promote the robust compliance with and enforcement of existing 
        international legal requirements for the protection of 
        intellectual property rights as formulated in the Agreement on 
        Trade-Related Aspects of Intellectual Property Rights, referred 
        to in section 101(d)(15) of the Uruguay Round Agreements Act 
        (19 U.S.C.3511(d)(15) and in applicable intellectual property 
        provisions of bilateral trade agreements.
    (b) Purposes.--The purposes of this subtitle are--
            (1) to provide United States assistance and leverage 
        private resources to encourage widespread implementation, in 
        developing countries, of activities that reduce, sequester, or 
        avoid greenhouse gas emissions; and
            (2) to provide such assistance in a manner that--
                    (A) encourages such countries to adopt policies and 
                measures, including sector-based and cross-sector 
                policies and measures, that substantially reduce, 
                sequester, or avoid greenhouse gas emissions;
                    (B) promotes the successful negotiation of a global 
                agreement to reduce greenhouse gas emissions under the 
                United Nations Framework Convention on Climate Change; 
                and
                    (C) promotes robust compliance with and enforcement 
                of existing international legal requirements for the 
                protection of intellectual property rights, as 
                formulated in the Agreement on Trade-Related Aspects of 
                Intellectual Property Rights referred to in section 
                101(d)(15) of the Uruguay Round Agreements Act (19 
                U.S.C. 3511(d)(15)) and in applicable intellectual 
                property provisions of bilateral trade agreements.

SEC. 442. DEFINITIONS.

    In this subtitle:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committees on Energy and Commerce, Foreign 
                Affairs, and Financial Services of the House of 
                Representatives; and
                    (B) the Committees on Environment and Public Works, 
                Energy and Natural Resources, and Foreign Relations of 
                the Senate.
            (3) Convention.--The term ``Convention'' means the United 
        Nations Framework Convention on Climate Change, done at New 
        York on May 9, 1992, and entered into force on March 21, 1994.
            (4) Developing country.--The term ``developing country'' 
        means a country eligible to receive official development 
        assistance according to the income guidelines of the 
        Development Assistance Committee of the Organization for 
        Economic Cooperation and Development.
            (5) Eligible country.--The term ``eligible country'' means 
        a developing country that is determined by the interagency 
        group under section 444 to be eligible to receive assistance 
        from the International Clean Technology Account.
            (6) Interagency group.--The term ``interagency group'' 
        means the group established by the President under section 443 
        to administer distributions from the International Clean 
        Technology Account.
            (7) International clean technology account.--The term 
        ``International Clean Technology Account'' means the account to 
        which the Administrator allocates allowances under section 
        782(o) of the Clean Air Act.
            (8) Least developed country.--The term ``least developed 
        country'' means a foreign country the United Nations has 
        identified as among the least developed of developing 
        countries.
            (9) Qualifying activity.--The term ``qualifying activity'' 
        means an activity that meets the criteria in section 445.
            (10) Qualifying entity.--The term ``qualifying entity'' 
        means a national, regional, or local government in, or a 
        nongovernmental organization or private entity located or 
        operating in, an eligible country.

SEC. 443. GOVERNANCE.

    (a) Oversight.--The Secretary of State, or such other Federal 
agency head as the President may designate, in consultation with the 
interagency group established under subsection (b), shall oversee 
distributions of allowances from the International Clean Technology 
Account.
    (b) Interagency Group.--The President shall establish an 
interagency group to administer the International Clean Technology 
Account. The Members of the interagency group shall include--
            (1) the Secretary of State;
            (2) the Administrator of the Environmental Protection 
        Agency;
            (3) the Secretary of Energy;
            (4) the Secretary of the Treasury;
            (5) the Secretary of Commerce;
            (6) the Administrator of the United States Agency for 
        International Development; and
            (7) any other head of a Federal agency or executive branch 
        appointee that the President may designate.
    (c) Chairperson.--The Secretary of State shall serve as the 
chairperson of the interagency group.
    (d) Supplement Not Supplant.--Allowances distributed from the 
International Clean Technology Account shall be used to supplement, and 
not to supplant, any other Federal, State, or local resources available 
to carry out activities that are qualifying activities under this 
subtitle.

SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES.

    (a) In General.--The interagency group shall determine a country to 
be an eligible country for the purposes of this subtitle if a country 
meets the following criteria:
            (1) The country is a developing country that--
                    (A) has entered into an international agreement to 
                which the United States is a party, under which such 
                country agrees to take actions to produce measurable, 
                reportable, and verifiable greenhouse gas emissions 
                mitigation; or
                    (B) is determined by the interagency group to have 
                in force national policies and measures that are 
                capable of producing measurable, reportable, and 
                verifiable greenhouse gas emissions mitigation.
            (2) The country has developed a nationally appropriate 
        mitigation strategy that seeks to achieve substantial 
        reductions, sequestration, or avoidance of greenhouse gas 
        emissions, relative to business-as-usual levels.
            (3) Subject to subsection (b)(1), such other criteria as 
        the President determines will serve the purposes of this 
        subtitle or other United States national security, foreign 
        policy, environmental, or economic objectives including robust 
        compliance with and enforcement of existing international legal 
        requirements for the protection of intellectual property rights 
        for clean technology, as formulated in the Agreement on Trade-
        Related Aspects of Intellectual Property Rights, referred to in 
        section 101(d)(15) of the Uruguay Round Agreements Act (19 
        U.S.C. 3511(d)(15)) and in applicable intellectual property 
        provisions of bilateral trade agreements.
    (b) Exceptions.--
            (1) Subsection (a)(3) applies only to bilateral assistance 
        under section 446(c)(4).
            (2) The eligibility criteria in this section do not apply 
        in the case of least developed countries receiving assistance 
        under section 445(7) for the purpose of building capacity to 
        meet such eligibility criteria.

SEC. 445. QUALIFYING ACTIVITIES.

    Assistance under this subtitle may be provided only to qualifying 
entities for clean technology activities (including building relevant 
technical and institutional capacity) that contribute to substantial, 
measurable, reportable, and verifiable reductions, sequestration, or 
avoidance of greenhouse gas emissions including--
            (1) deployment of technologies to capture and sequester 
        carbon dioxide emissions from electric generating units or 
        large industrial sources (except that assistance under this 
        subtitle for such deployment shall be limited to the cost of 
        retrofitting existing facilities with such technologies or the 
        incremental cost of purchasing and installing such technologies 
        at new facilities);
            (2) deployment of renewable electricity generation from 
        wind, solar, sustainably produced biomass, geothermal, marine, 
        or hydrokinetic sources;
            (3) substantial increases in the efficiency of electricity 
        transmission, distribution, and consumption;
            (4) deployment of low- or zero emissions technologies that 
        are facing financial or other barriers to their widespread 
        deployment which could be addressed through support under this 
        subtitle in order to reduce, sequester, or avoid emission;
            (5) reduction in transportation sector emissions through 
        increased transportation system and vehicle efficiency or use 
        of transportation fuels that have lifecycle greenhouse gas 
        emissions that are substantially lower than those attributable 
        to fossil fuel-based alternatives;
            (6) reduction in black carbon emissions; or
            (7) capacity building activities, including--
                    (A) developing and implementing methodologies and 
                programs for measuring and quantifying greenhouse gas 
                emissions and verifying emissions mitigation;
                    (B) assessing, developing, and implementing 
                technology and policy options for greenhouse gas 
                emissions mitigation and avoidance of future emissions, 
                including sector and cross-sector mitigation 
                strategies; and
                    (C) providing other forms of technical assistance 
                to facilitate the qualification for, and receipt of, 
                assistance under this Act.

SEC. 446. ASSISTANCE.

    (a) In General.--The Secretary of State, or such other Federal 
agency head as the President may designate, is authorized to provide 
assistance, through the distribution of allowances, from the 
International Clean Technology Account for qualifying activities that 
take place in eligible countries.
    (b) Annual Reports.--Not later than March 1, 2012, and annually 
thereafter, the President shall submit to the appropriate congressional 
committees a report on the assistance provided under this subtitle 
during the prior fiscal year. Such report shall include--
            (1) a description of the amount and value of allowances 
        distributed during the prior fiscal year;
            (2) a description of each activity that received assistance 
        during the prior fiscal year, and a description of the 
        anticipated and actual outcomes;
            (3) an assessment of any adverse effects to human health, 
        safety, or welfare, the environment, or natural resources as a 
        result of activities supported under this subtitle;
            (4) an assessment of the success of the assistance provided 
        under this subtitle to improving the technical and 
        institutional capacity to implement substantial emissions 
        reductions;
            (5) an estimate of the greenhouse gas emissions reductions, 
        sequestration, or avoidance achieved by assistance provided 
        under this subtitle during the prior fiscal year; and
            (6) an assessment whether any funds expended for the 
        benefit of any qualifying activity undermined the protection of 
        intellectual property rights for clean technology, as 
        formulated in the Agreement on Trade-Related Aspects of 
        Intellectual Property Rights, referred to in section 101(d)(15) 
        of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)) and 
        applicable intellectual property provisions of bilateral trade 
        agreements.
    (c) Distribution of Allowances.--
            (1) In general.--The Secretary of State, or such other 
        Federal agency head as the President may designate, after 
        consultation with the interagency group, shall distribute 
        allowances from the International Clean Technology Account--
                    (A) in the form of bilateral assistance in 
                accordance with paragraph (4);
                    (B) to multilateral funds or institutions pursuant 
                to the Convention or an agreement negotiated under the 
                Convention; or
                    (C) through some combination of the mechanisms 
                identified in subparagraphs (A) and (B).
            (2) Global environment facility.--For any allowances 
        provided to the Global Environment Facility pursuant to 
        paragraph (1)(B), the President shall designate the Secretary 
        of the Treasury to distribute those allowances to the Global 
        Environment Facility.
            (3) Distribution through international fund or 
        institution.--If allowances are distributed to a multilateral 
        fund or institution, as authorized in paragraph (1), the 
        Secretary of State, or such other Federal agency head as the 
        President may designate, shall seek to ensure the establishment 
        and implementation of adequate mechanisms to--
                    (A) apply and enforce the criteria for 
                determination of eligible countries and qualifying 
                activities under sections 444 and 445, respectively;
                    (B) require public reporting describing the process 
                and methodology for selecting the ultimate recipients 
                of assistance and a description of each activity that 
                received assistance, including the amount of 
                obligations and expenditures for assistance; and
                    (C) require that no funds be expended for the 
                benefit of any qualifying activity where that activity 
                or any activity relating to a qualifying activity under 
                section 445 undermines the robust compliance with and 
                enforcement of existing legal requirements for the 
                protection of intellectual property rights for clean 
                technology, as formulated in the Agreement on Trade-
                Related Aspects of Intellectual Property Rights, 
                referred to in section 101(d)(15) of the Uruguay Round 
                Agreements Act (19 U.S.C. 3511(d)(15)).
            (4) Bilateral assistance.--
                    (A) In general.--Bilateral assistance under 
                paragraph (1) shall be carried out by the Administrator 
                of the United States Agency for International 
                Development, in consultation with the interagency 
                group.
                    (B) Limitations.--Not more than 15 percent of 
                allowances made available to carry out bilateral 
                assistance under this subtitle in any year shall be 
                distributed to support activities in any single 
                country.
                    (C) Selection criteria.--Not later than 2 years 
                after the date of enactment of this subtitle, the 
                Administrator of the United States Agency for 
                International Development, after consultation with the 
                interagency group, shall develop and publish a set of 
                criteria to be used in evaluating activities within 
                eligible countries for bilateral assistance under this 
                subtitle.
                    (D) Criteria requirements.--The criteria under 
                subparagraph (C) shall require that--
                            (i) the activity is a qualifying activity;
                            (ii) the activity will be conducted as part 
                        of an eligible country's nationally appropriate 
                        mitigation strategy or as part of an eligible 
                        country's actions towards providing a 
                        nationally appropriate mitigation strategy to 
                        reduce, sequester, or avoid emissions being 
                        implemented by the eligible country;
                            (iii) the activity will not have adverse 
                        effects on human health, safety, or welfare, 
                        the environment, or natural resources;
                            (iv) any technologies deployed through 
                        bilateral assistance under this subtitle will 
                        be properly implemented and maintained;
                            (v) the activity will not cause any net 
                        loss of United States jobs or displacement of 
                        United States production;
                            (vi) costs of the activity will be shared 
                        by the host country government, private sector 
                        parties, or a multinational development bank, 
                        except that this clause does not apply to least 
                        developed countries;
                            (vii) the activity would not undermine the 
                        protection of intellectual property rights for 
                        clean technology, as formulated in the 
                        Agreement on Trade-Related Aspects of 
                        Intellectual Property Rights, referred to in 
                        section 101(d)(15) of the Uruguay Round 
                        Agreements Act (19 U.S.C. 3511(d)(15)) and 
                        applicable intellectual property provisions of 
                        bilateral trade agreements; and
                            (viii) the activity meets such other 
                        requirements as the interagency group 
                        determines appropriate to further the purposes 
                        of this subtitle.
                    (E) Criteria preferences.--The criteria under 
                subparagraph (C) shall give preference to activities 
                that--
                            (i) promise to achieve large-scale 
                        greenhouse gas reductions, sequestration, or 
                        avoidance at a national, sectoral or cross-
                        sectoral level;
                            (ii) have the potential to catalyze a shift 
                        within the host country towards widespread 
                        deployment of low- or zero-carbon energy 
                        technologies;
                            (iii) build technical and institutional 
                        capacity and other activities that are unlikely 
                        to be attractive to private sector funding; or
                            (iv) maximize opportunities to leverage 
                        other sources of assistance and catalyze 
                        private-sector investment.
    (d) Monitoring, Evaluation, and Enforcement.--The Secretary of 
State, or such other Federal agency head as the President may 
designate, in consultation with the interagency group, shall establish 
and implement a system to monitor and evaluate the performance of 
activities receiving assistance under this subtitle. The Secretary of 
State, or such other Federal agency head as the President may 
designate, shall have the authority to suspend or terminate assistance 
in whole or in part for an activity if it is determined that the 
activity is not operating in compliance with the approved proposal.
    (e) Coordination With U.S. Foreign Assistance.--Subject to the 
direction of the President, the Secretary of State shall, to the extent 
practicable, seek to align activities under this section with broader 
development, poverty alleviation, or natural resource management 
objectives and initiatives in the recipient country.
    (f) Definition.--For the purposes of this section the term ``clean 
technology'' means any technology or service related to the qualifying 
activities identified in section 445.

                 Subtitle E--Adapting to Climate Change

                      PART 1--DOMESTIC ADAPTATION

         Subpart A--National Climate Change Adaptation Program

SEC. 451. GLOBAL CHANGE RESEARCH AND DATA MANAGEMENT.

    (a) Short Title.--This section may be cited as the ``Global Change 
Research and Data Management Act of 2009''.
    (b) Global Change Research.--
            (1) Purpose.--The purpose of this subsection is to provide 
        for the continuation and coordination of a comprehensive and 
        integrated United States observation, research, and outreach 
        program which will assist the Nation and the world to 
        understand, assess, predict, and respond to the effects of 
        human-induced and natural processes of global change.
            (2) Definitions.--For purposes of this subsection--
                    (A) the term ``global change'' means human-induced 
                or natural changes in the global environment (including 
                alterations in climate, land productivity, oceans or 
                other water resources, atmospheric chemistry, 
                biodiversity, and ecological systems) that may alter 
                the capacity of the Earth to sustain life;
                    (B) the term ``global change research'' means 
                study, monitoring, assessment, prediction, and 
                information management activities to describe and 
                understand--
                            (i) the interactive physical, chemical, and 
                        biological processes that regulate the total 
                        Earth system;
                            (ii) the unique environment that the Earth 
                        provides for life;
                            (iii) changes that are occurring in the 
                        Earth system; and
                            (iv) the manner in which such system, 
                        environment, and changes are influenced by 
                        human actions;
                    (C) the term ``interagency committee'' means the 
                interagency committee established under paragraph (3);
                    (D) the term ``Plan'' means the National Global 
                Change Research and Assessment Plan developed under 
                paragraph (5);
                    (E) the term ``Program'' means the United States 
                Global Change Research Program established under 
                paragraph (4); and
                    (F) the term ``regional climate change'' means the 
                natural or human-induced changes manifested in the 
                local or regional environment (including alterations in 
                weather patterns, land productivity, water resources, 
                sea level rise, atmospheric chemistry, biodiversity, 
                and ecological systems) that may alter the capacity of 
                a specific region to support current or future social 
                and economic activity or natural ecosystems.
            (3) Interagency cooperation and coordination.--
                    (A) Establishment.--The President shall establish 
                or designate an interagency committee to ensure 
                cooperation and coordination of all Federal research 
                activities pertaining to processes of global change for 
                the purpose of increasing the overall effectiveness and 
                productivity of Federal global change research efforts. 
                The interagency committee shall include research and 
                program representatives of agencies conducting global 
                change research, agencies with authority over resources 
                likely to be affected by global change, and agencies 
                with authority to mitigate human-induced global change.
                    (B) Functions of the interagency committee.--The 
                interagency committee shall--
                            (i) serve as the forum for developing the 
                        Plan and for overseeing its implementation;
                            (ii) serve as the forum for developing the 
                        vulnerability assessment under paragraph (7);
                            (iii) ensure cooperation among Federal 
                        agencies with respect to global change research 
                        activities;
                            (iv) work with academic, State, industry, 
                        and other groups conducting global change 
                        research, to provide for periodic public and 
                        peer review of the Program;
                            (v) cooperate with the Secretary of State 
                        in--
                                    (I) providing representation at 
                                international meetings and conferences 
                                on global change research in which the 
                                United States participates; and
                                    (II) coordinating the Federal 
                                activities of the United States with 
                                programs of other nations and with 
                                international global change research 
                                activities;
                            (vi) work with appropriate Federal, State, 
                        regional, and local authorities to ensure that 
                        the Program is designed to produce information 
                        needed to develop policies to mitigate human-
                        induced global change and to reduce the 
                        vulnerability of the United States and other 
                        regions to global change;
                            (vii) facilitate ongoing dialog and 
                        information exchange with regional, State, and 
                        local governments and other user communities; 
                        and
                            (viii) identify additional decisionmaking 
                        groups that may use information generated 
                        through the Program.
            (4) United states global change research program.--
                    (A) Establishment.--The President shall establish 
                an interagency United States Global Change Research 
                Program to improve understanding of global change, to 
                respond to the information needs of communities and 
                decisionmakers, and to provide periodic assessments of 
                the vulnerability of the United States and other 
                regions to global and regional climate change. The 
                Program shall be implemented in accordance with the 
                Plan.
                    (B) Lead agency.--The lead agency for the United 
                States Global Change Research Program shall be the 
                Office of Science and Technology Policy.
                    (C) Interagency program activities.--The Director 
                of the Office of Science and Technology Policy, in 
                consultation with the interagency committee, shall 
                identify activities included in the Plan that involve 
                participation by 2 or more agencies in the Program, and 
                that do not fall within the current fiscal year budget 
                allocations of those participating agencies, to fulfill 
                the requirements of this section. The Director of the 
                Office of Science and Technology Policy shall allocate 
                funds to the agencies to conduct the identified 
                interagency activities. Such activities may include--
                            (i) development of scenarios for climate, 
                        land-cover change, population growth, and 
                        socioeconomic development;
                            (ii) calibration and testing of alternative 
                        regional and global climate models;
                            (iii) identification of economic sectors 
                        and regional climatic zones; and
                            (iv) convening regional workshops to 
                        facilitate information exchange and involvement 
                        of regional, State, and local decisionmakers, 
                        non-Federal experts, and other stakeholder 
                        groups in the activities of the Program.
                    (D) Workshops.--The Director shall ensure that at 
                least one workshop is held per year in each region 
                identified by the Plan under paragraph (5)(B)(xi) to 
                facilitate information exchange and outreach to 
                regional, State, and local stakeholders as required by 
                this section.
                    (E) Authorization of appropriations.--There are 
                authorized to be appropriated to the Office of Science 
                and Technology Policy for carrying out this paragraph 
                $10,000,000 for each of the fiscal years 2009 through 
                2014.
            (5) National global change research and assessment plan.--
                    (A) In general.--The President shall develop a 
                National Global Change Research and Assessment Plan for 
                implementation of the Program. The Plan shall contain 
                recommendations for global change research and 
                assessment. The President shall submit an outline for 
                the development of the Plan to the Congress within 1 
                year after the date of enactment of this Act, and shall 
                submit a completed Plan to the Congress within 3 years 
                after the date of enactment of this Act. Revised Plans 
                shall be submitted to the Congress at least once every 
                5 years thereafter. In the development of each Plan, 
                the President shall conduct a formal assessment process 
                under this paragraph to determine the needs of 
                appropriate Federal, State, regional, and local 
                authorities and other interested parties regarding the 
                types of information needed by them in developing 
                policies to mitigate human-induced global change and to 
                reduce society's vulnerability to global change and 
                shall utilize these assessments, including the reviews 
                by the National Academy of Sciences and the National 
                Governors Association under subparagraphs (E) and (F), 
                in developing the Plan.
                    (B) Contents of the plan.--The Plan shall--
                            (i) establish, for the 10-year period 
                        beginning in the year the Plan is submitted, 
                        the goals and priorities for Federal global 
                        change research which most effectively advance 
                        scientific understanding of global change and 
                        provide information of use to Federal, State, 
                        regional, and local authorities in the 
                        development of policies relating to global 
                        change;
                            (ii) describe specific activities, 
                        including efforts to determine user information 
                        needs, research activities, data collection, 
                        database development, and data analysis 
                        requirements, development of regional 
                        scenarios, assessment of model predictability, 
                        assessment of climate change impacts, 
                        participation in international research 
                        efforts, and information management, required 
                        to achieve such goals and priorities;
                            (iii) identify relevant programs and 
                        activities of the Federal agencies that 
                        contribute to the Program directly and 
                        indirectly;
                            (iv) set forth the role of each Federal 
                        agency in implementing the Plan;
                            (v) consider and utilize, as appropriate, 
                        reports and studies conducted by Federal 
                        agencies, the National Research Council, or 
                        other entities;
                            (vi) make recommendations for the 
                        coordination of the global change research and 
                        assessment activities of the United States with 
                        such activities of other nations and 
                        international organizations, including--
                                    (I) a description of the extent and 
                                nature of international cooperative 
                                activities;
                                    (II) bilateral and multilateral 
                                efforts to provide worldwide access to 
                                scientific data and information; and
                                    (III) improving participation by 
                                developing nations in international 
                                global change research and 
                                environmental data collection;
                            (vii) detail budget requirements for 
                        Federal global change research and assessment 
                        activities to be conducted under the Plan;
                            (viii) catalog the type of information 
                        identified by appropriate Federal, State, 
                        regional, and local decisionmakers needed to 
                        develop policies to reduce society's 
                        vulnerability to global change and indicate how 
                        the planned research will meet these 
                        decisionmakers' information needs;
                            (ix) identify the observing systems 
                        currently employed in collecting data relevant 
                        to global and regional climate change research 
                        and prioritize additional observation systems 
                        that may be needed to ensure adequate data 
                        collection and monitoring of global change;
                            (x) describe specific activities designed 
                        to facilitate outreach and data and information 
                        exchange with regional, State, and local 
                        governments and other user communities; and
                            (xi) identify and describe regions of the 
                        United States that are likely to experience 
                        similar impacts of global change or are likely 
                        to share similar vulnerabilities to global 
                        change.
                    (C) Research elements.--The Plan shall include at a 
                minimum the following research elements:
                            (i) Global measurements, establishing 
                        worldwide to regional scale observations 
                        prioritized to understand global change and to 
                        meet the information needs of decisionmakers on 
                        all relevant spatial and time scales.
                            (ii) Information on economic, demographic, 
                        and technological trends that contribute to 
                        changes in the Earth system and that influence 
                        society's vulnerability to global and regional 
                        climate change.
                            (iii) Development of indicators and 
                        baseline databases to document global change, 
                        including changes in species distribution and 
                        behavior, extent of glaciations, and changes in 
                        sea level.
                            (iv) Studies of historical changes in the 
                        Earth system, using evidence from the 
                        geological and fossil record.
                            (v) Assessments of predictability using 
                        quantitative models of the Earth system to 
                        simulate global and regional environmental 
                        processes and trends.
                            (vi) Focused research initiatives to 
                        understand the nature of and interaction among 
                        physical, chemical, biological, land use, and 
                        social processes related to global and regional 
                        climate change.
                            (vii) Focused research initiatives to 
                        determine and then meet the information needs 
                        of appropriate Federal, State, and regional 
                        decisionmakers.
                    (D) Information management.--The Plan shall 
                incorporate, to the extent practicable, the 
                recommendations relating to data acquisition, 
                management, integration, and archiving made by the 
                interagency climate and other global change data 
                management working group established under subsection 
                (c)(3).
                    (E) National academy of sciences evaluation.--The 
                President shall enter into an agreement with the 
                National Academy of Sciences under which the Academy 
                shall--
                            (i) evaluate the scientific content of the 
                        Plan; and
                            (ii) recommend priorities for future global 
                        and regional climate change research and 
                        assessment.
                    (F) National governors association evaluation.--The 
                President shall enter into an agreement with the 
                National Governors Association Center for Best 
                Practices under which that Center shall--
                            (i) evaluate the utility to State, local, 
                        and regional decisionmakers of each Plan and of 
                        the anticipated and actual information outputs 
                        of the Program for development of State, local, 
                        and regional policies to reduce vulnerability 
                        to global change; and
                            (ii) recommend priorities for future global 
                        and regional climate change research and 
                        assessment.
                    (G) Public participation.--In developing the Plan, 
                the President shall consult with representatives of 
                academic, State, industry, and environmental groups. 
                Not later than 90 days before the President submits the 
                Plan, or any revision thereof, to the Congress, a 
                summary of the proposed Plan shall be published in the 
                Federal Register for a public comment period of not 
                less than 60 days.
            (6) Budget coordination.--
                    (A) In general.--The President shall provide 
                general guidance to each Federal agency participating 
                in the Program with respect to the preparation of 
                requests for appropriations for activities related to 
                the Program.
                    (B) Consideration in president's budget.--The 
                President shall submit, at the time of his annual 
                budget request to Congress, a description of those 
                items in each agency's annual budget which are elements 
                of the Program.
            (7) Vulnerability assessment.--
                    (A) Requirement.--Within 1 year after the date of 
                enactment of this Act, and at least once every 5 years 
                thereafter, the President shall submit to the Congress 
                an assessment which--
                            (i) integrates, evaluates, and interprets 
                        the findings of the Program and discusses the 
                        scientific uncertainties associated with such 
                        findings;
                            (ii) analyzes current trends in global 
                        change, both human-induced and natural, and 
                        projects major trends for the subsequent 25 to 
                        100 years;
                            (iii) based on indicators and baselines 
                        developed under paragraph (5)(C)(iii), as well 
                        as other measurements, analyzes changes to the 
                        natural environment, land and water resources, 
                        and biological diversity in--
                                    (I) major geographic regions of the 
                                United States; and
                                    (II) other continents;
                            (iv) analyzes the effects of global change, 
                        including the changes described in clause 
                        (iii), on food and fiber production, energy 
                        production and use, transportation, human 
                        health and welfare, water availability and 
                        coastal infrastructure, and human social and 
                        economic systems, including providing 
                        information about the differential impacts on 
                        specific geographic regions within the United 
                        States, on people of different income levels 
                        within those regions, and for rural and urban 
                        areas within those regions; and
                            (v) summarizes the vulnerability of 
                        different geographic regions of the world to 
                        global change and analyzes the implications of 
                        global change for the United States, including 
                        international assistance, population 
                        displacement, food and resource availability, 
                        and national security.
                    (B) Use of related reports.--To the extent 
                appropriate, the assessment produced pursuant to this 
                paragraph may coordinate with, consider, incorporate, 
                or otherwise make use of related reports, assessments, 
                or information produced by the United States Global 
                Change Research Program, regional, State, and local 
                entities, and international organizations, including 
                the World Meteorological Organization and the 
                Intergovernmental Panel on Climate Change.
            (8) Policy assessment.--Not later than 1 year after the 
        date of enactment of this Act, and at least once every 4 years 
        thereafter, the President shall enter into a joint agreement 
        with the National Academy of Public Administration and the 
        National Academy of Sciences under which the Academies shall--
                    (A) document current policy options being 
                implemented by Federal, State, and local governments to 
                mitigate or adapt to the effects of global and regional 
                climate change;
                    (B) evaluate the realized and anticipated 
                effectiveness of those current policy options in 
                meeting mitigation and adaptation goals;
                    (C) identify and evaluate a range of additional 
                policy options and infrastructure for mitigating or 
                adapting to the effects of global and regional climate 
                change;
                    (D) analyze the adoption rates of policies and 
                technologies available to reduce the vulnerability of 
                society to global change with an evaluation of the 
                market and policy obstacles to their adoption in the 
                United States; and
                    (E) evaluate the distribution of economic costs and 
                benefits of these policy options across different 
                United States economic sectors.
            (9) Annual report.--Each year at the time of submission to 
        the Congress of the President's budget request, the President 
        shall submit to the Congress a report on the activities 
        conducted pursuant to this subsection, including--
                    (A) a description of the activities of the Program 
                during the past fiscal year;
                    (B) a description of the activities planned in the 
                next fiscal year toward achieving the goals of the 
                Plan; and
                    (C) a description of the groups or categories of 
                State, local, and regional decisionmakers identified as 
                potential users of the information generated through 
                the Program and a description of the activities used to 
                facilitate consultations with and outreach to these 
                groups, coordinated through the work of the interagency 
                committee.
            (10) Relation to other authorities.--The President shall--
                    (A) ensure that relevant research, assessment, and 
                outreach activities of the National Climate Program, 
                established by the National Climate Program Act (15 
                U.S.C. 2901 et seq.), are considered in developing 
                national global and regional climate change research 
                and assessment efforts; and
                    (B) facilitate ongoing dialog and information 
                exchange with regional, State, and local governments 
                and other user communities through programs authorized 
                in the National Climate Program Act (15 U.S.C. 2901 et 
                seq.).
            (11) Repeal.--The Global Change Research Act of 1990 (15 
        U.S.C. 2921 et seq.) is amended by striking titles I and III 
        thereof.
            (12) Global change research information.--The President 
        shall establish or designate a Global Change Research 
        Information Exchange to make scientific research and other 
        information produced through or utilized by the Program which 
        would be useful in preventing, mitigating, or adapting to the 
        effects of global change accessible through electronic means.
            (13) Ice sheet study and report.--
                    (A) Study.--
                            (i) Requirement.--The Director of the 
                        National Science Foundation and the 
                        Administrator of National Oceanic and 
                        Atmospheric Administration shall enter into an 
                        arrangement with the National Academy of 
                        Sciences to complete a study of the current 
                        status of ice sheet melt, as caused by climate 
                        change, with implications for global sea level 
                        rise.
                            (ii) Contents.--The study shall take into 
                        consideration--
                                    (I) the past research completed 
                                related to ice sheet melt as reviewed 
                                by Working Group I of the 
                                Intergovernmental Panel on Climate 
                                Change;
                                    (II) additional research completed 
                                since the fall of 2005 that was not 
                                included in the Working Group I report 
                                due to time constraints; and
                                    (III) the need for an accurate 
                                assessment of changes in ice sheet 
                                spreading, changes in ice sheet flow, 
                                self-lubrication, the corresponding 
                                effect on ice sheets, and current 
                                modeling capabilities.
                    (B) Report.--Not later than 18 months after the 
                date of enactment of this Act, the National Academy of 
                Sciences shall transmit to the Committee on Science and 
                Technology of the House of Representatives and the 
                Committee on Commerce, Science, and Transportation of 
                the Senate a report on the key findings of the study 
                conducted under subparagraph (A), along with 
                recommendations for additional research related to ice 
                sheet melt and corresponding sea level rise.
            (14) Hurricane frequency and intensity study and report.--
                    (A) Study.--
                            (i) Requirement.--The Administrator of the 
                        National Oceanic and Atmospheric Administration 
                        and the Director of the National Science 
                        Foundation shall enter into an arrangement with 
                        the National Academy of Sciences to complete a 
                        study of the current state of the science on 
                        the potential impacts of climate change on 
                        patterns of hurricane and typhoon development, 
                        including storm intensity, track, and 
                        frequency, and the implications for hurricane-
                        prone and typhoon-prone coastal regions.
                            (ii) Contents.--The study shall take into 
                        consideration--
                                    (I) the past research completed 
                                related to hurricane and typhoon 
                                development, track, and intensity as 
                                reviewed by Working Groups I and II of 
                                the Intergovernmental Panel on Climate 
                                Change;
                                    (II) additional research completed 
                                since the fall of 2005 that was not 
                                included in the Working Group I and II 
                                reports due to time constraints;
                                    (III) the need for accurate 
                                assessment of potential changes in 
                                hurricane and typhoon intensity, track, 
                                and frequency and of the current 
                                modeling and forecasting capabilities 
                                and the need for improvements in 
                                forecasting of these parameters; and
                                    (IV) the need for additional 
                                research and monitoring to improve 
                                forecasting of hurricanes and typhoons 
                                and to understand the relationship 
                                between climate change and hurricane 
                                and typhoon development.
                    (B) Report.--Not later than 18 months after the 
                date of enactment of this Act, the National Academy of 
                Sciences shall transmit to the Committee on Science and 
                Technology of the House of Representatives and the 
                Committee on Commerce, Science, and Transportation of 
                the Senate a report on the key findings of the study 
                conducted under subparagraph (A).
    (c) Climate and Other Global Change Data Management.--
            (1) Purposes.--The purposes of this subsection are to 
        establish climate and other global change data management and 
        archiving as Federal agency missions, and to establish Federal 
        policies for managing and archiving climate and other global 
        change data.
            (2) Definitions.--For purposes of this subsection--
                    (A) the term ``metadata'' means information 
                describing the content, quality, condition, and other 
                characteristics of climate and other global change 
                data, compiled, to the maximum extent possible, 
                consistent with the requirements of the ``Content 
                Standard for Digital Geospatial Metadata'' (FGDC-STD-
                001-1998) issued by the Federal Geographic Data 
                Committee, or any successor standard approved by the 
                working group; and
                    (B) the term ``working group'' means the 
                interagency climate and other global change data 
                management working group established under paragraph 
                (3).
            (3) Interagency climate and other global change data 
        management working group.--
                    (A) Establishment.--The President shall establish 
                or designate an interagency climate and other global 
                change data management working group to make 
                recommendations for coordinating Federal climate and 
                other global change data management and archiving 
                activities.
                    (B) Membership.--The working group shall include 
                the Administrator of the National Aeronautics and Space 
                Administration, the Administrator of the National 
                Oceanic and Atmospheric Administration, the Secretary 
                of Energy, the Secretary of Defense, the Director of 
                the National Science Foundation, the Director of the 
                United States Geological Survey, the Archivist of the 
                United States, the Administrator of the Environmental 
                Protection Agency, the Secretary of the Smithsonian 
                Institution, or their designees, and representatives of 
                any other Federal agencies the President considers 
                appropriate.
                    (C) Reports.--Not later than 1 year after the date 
                of enactment of this Act, the working group shall 
                transmit a report to the Congress containing the 
                elements described in subparagraph (D). Not later than 
                4 years after the initial report under this 
                subparagraph, and at least once every 4 years 
                thereafter, the working group shall transmit reports 
                updating the previous report. In preparing reports 
                under this subparagraph, the working group shall 
                consult with expected users of the data collected and 
                archived by the Program.
                    (D) Contents.--The reports and updates required 
                under subparagraph (C) shall--
                            (i) include recommendations for the 
                        establishment, maintenance, and accessibility 
                        of a catalog identifying all available climate 
                        and other global change data sets;
                            (ii) identify climate and other global 
                        change data collections in danger of being lost 
                        and recommend actions to prevent such loss;
                            (iii) identify gaps in climate and other 
                        global change data and recommend actions to 
                        fill those gaps;
                            (iv) identify effective and compatible 
                        procedures for climate and other global change 
                        data collection, management, and retention and 
                        make recommendations for ensuring their use by 
                        Federal agencies and other appropriate 
                        entities;
                            (v) develop and propose a coordinated 
                        strategy for funding and allocating 
                        responsibilities among Federal agencies for 
                        climate and other global change data 
                        collection, management, and retention;
                            (vi) make recommendations for ensuring that 
                        particular attention is paid to the collection, 
                        management, and archiving of metadata;
                            (vii) make recommendations for ensuring a 
                        unified and coordinated Federal capital 
                        investment strategy with respect to climate and 
                        other global change data collection, 
                        management, and archiving;
                            (viii) evaluate the data record from each 
                        observing system and make recommendations to 
                        ensure that delivered data are free from time-
                        dependent biases and random errors before they 
                        are transferred to long-term archives; and
                            (ix) evaluate optimal design of observation 
                        system components to ensure a cost-effective, 
                        adequate set of observations detecting and 
                        tracking global change.

SEC. 452. NATIONAL CLIMATE SERVICE.

    (a) Short Title.--This section may be cited as the ``National 
Climate Service Act of 2009''.
    (b) Purpose.--The purpose of this section is to establish a 
National Climate Service and to define the activities to be undertaken 
within the National Oceanic and Atmospheric Administration to--
            (1) advance understanding of climate variability and change 
        at the global, national, regional, and local levels;
            (2) provide forecasts, warnings, and other information to 
        the public on variability and change in weather and climate 
        that affect geographic areas, natural resources, 
        infrastructure, economic sectors, and communities; and
            (3) support development of adaptation and response plans by 
        Federal agencies, State, local, and tribal governments, the 
        private sector, and the public.
    (c) Definitions.--In this section:
            (1) Advisory committee.--The term ``Advisory Committee'' 
        means the Climate Service Advisory Committee established under 
        subsection (f).
            (2) Director.--The term ``Director'' means the Director of 
        the Climate Service Office.
            (3) Representative.--The term ``representative'' means an 
        individual who is not a full-time or part-time employee of the 
        Federal Government and who is appointed to an advisory 
        committee to represent the views of an entity or entities 
        outside the Federal Government.
            (4) Special government employee.--The term ``Special 
        Government Employee'' has the same meaning as in section 202(a) 
        of title 18, United States Code.
            (5) Under secretary.--The term ``Under Secretary'' means 
        the Under Secretary of Commerce for Oceans and Atmosphere.
    (d) Interagency Development of a National Climate Service.--
            (1) In general.--The President shall--
                    (A) initiate a process within 30 days after the 
                date of enactment of this Act through the Committee on 
                Environment and Natural Resources of the National 
                Science and Technology Council and led by the Director 
                of the Office of Science and Technology Policy, to 
                evaluate alternative structures to support a 
                collaborative, interagency research and operational 
                program that will achieve the goal of meeting the needs 
                of decisionmakers in--
                            (i) Federal agencies;
                            (ii) State, local, and tribal governments;
                            (iii) regional entities and other 
                        stakeholders and users,
                for reliable, timely, and relevant information related 
                to climate variability and change;
                    (B) within 1 year after the date of enactment of 
                this Act complete pursuant to paragraph (2) a survey of 
                the needs of current and future users of information 
                related to climate variability and change;
                    (C) within 2 years after the date of enactment of 
                this Act report to Congress under paragraph (3) the 
                results of the evaluation described in subparagraph (A) 
                and provide a plan to establish a collaborative, 
                interagency research and operational program to deliver 
                information related to climate variability and change 
                to all users; and
                    (D) within 3 years after the date of enactment of 
                this Act, and after delivery of the report to Congress 
                required under subparagraph (C), establish a National 
                Climate Service, based upon the information obtained 
                through the process described in subparagraph (A), that 
                meets the goal described in subparagraph (A).
            (2) Survey of need for climate services.--
                    (A) In general.--The Director of the Office of 
                Science and Technology Policy, through the Committee on 
                Environment and Natural Resources, shall provide a 
                report to Congress within 1 year after the date of 
                enactment of this Act that compiles information on the 
                current climate products being delivered by each 
                Federal agency and its partner organizations to users 
                and stakeholders, and on the needs of users and 
                stakeholders for new climate products and services.
                    (B) Contents of the report.--The report shall 
                identify--
                            (i) specific user groups and stakeholders 
                        that currently are served by each Federal 
                        agency and its partner organizations;
                            (ii) the type of climate products and 
                        services currently delivered to specific users 
                        groups and stakeholders, and the specific 
                        Federal agency office, program, or partner 
                        organization that delivers these products and 
                        services;
                            (iii) potential user groups and 
                        stakeholders that may be served by expanding 
                        climate products and services;
                            (iv) specific needs for new climate 
                        products and services to be delivered by each 
                        Federal agency and its partner organizations 
                        identified by user groups and stakeholders;
                            (v) a characterization of the different 
                        user and stakeholder groups that were surveyed 
                        by each Federal agency; and
                            (vi) a list of non-Federal entities that 
                        deliver climate products and services.
            (3) Report to congress.--
                    (A) In general.--Within 2 years after the date of 
                enactment of this Act, the Director of the Office of 
                Science and Technology Policy shall report to the 
                President and the Congress on a proposal, prepared 
                through the Committee on Environment and Natural 
                Resources, to establish and operate a National Climate 
                Service. The report shall include--
                            (i) a description of the alternative 
                        structures considered;
                            (ii) a description of the structure 
                        proposed for a National Climate Service, 
                        including a discussion of the benefits of this 
                        structure as compared to the alternatives 
                        considered;
                            (iii) designation of a specific office or 
                        agency that will lead the National Climate 
                        Service and that shall be accountable for the 
                        daily operation of the National Climate 
                        Service;
                            (iv) a description of the role and 
                        capability of each Federal agency, including a 
                        list of all entities within each agency or 
                        supported with agency funds that currently 
                        provide or may provide climate products or 
                        services;
                            (v) a description of the mechanisms that 
                        will be used to ensure ongoing communication 
                        and information exchange among the Federal 
                        agencies and between Federal agencies and their 
                        respective user and stakeholder communities 
                        including--
                                    (I) mechanisms to facilitate 
                                ongoing dialogue with non-Federal 
                                organizations providing climate 
                                services;
                                    (II) mechanisms to facilitate 
                                ongoing dialogue with regional, State, 
                                local, and tribal governments, the 
                                private sector, and other users and 
                                stakeholders on the development and 
                                delivery of climate services;
                                    (III) mechanisms to collect 
                                information, observations, and other 
                                data relevant for improving climate 
                                products and services; and
                                    (IV) designation of points of 
                                contact for each Federal agency with 
                                responsibilities to deliver climate 
                                services;
                            (vi) a detailed description of the 
                        processes and procedures that will be necessary 
                        to coordinate observations and information 
                        collection by different Federal agencies to 
                        ensure the compatibility of information and to 
                        facilitate data and information exchange among 
                        Federal agencies and with non-Federal entities, 
                        and a designation of the agency or agencies 
                        that would be responsible for ongoing oversight 
                        of these functions;
                            (vii) a detailed description of how 
                        research findings and climate impact 
                        assessments produced through the United States 
                        Global Change Research Program and the other 
                        activities undertaken within the United States 
                        Global Change Research Program would be 
                        integrated with the activities undertaken by a 
                        National Climate Service;
                            (viii) a list of the existing observation 
                        and monitoring systems or programs operated by 
                        each Federal agency that provide data, 
                        observations, and other information that may be 
                        used to develop or improve climate products and 
                        services;
                            (ix) a description of new infrastructure, 
                        equipment, personnel or other resources, by 
                        agency, that may be needed to achieve the goals 
                        of a National Climate Service, and the time 
                        period over which these new resources will be 
                        allocated;
                            (x) an identification of the activities 
                        that may be undertaken in cooperation with 
                        international partners;
                            (xi) the mechanisms established to provide 
                        quality assurance and quality control of 
                        climate service products and services, and the 
                        agency or agencies designated to conduct and 
                        oversee these mechanisms;
                            (xii) an identification of non-Federal 
                        entities that provide climate products and 
                        services, and a description of the relationship 
                        envisioned between a National Climate Service 
                        and the non-Federal entities providing climate 
                        services; and
                            (xiii) responses to the comments received 
                        during the public comment period.
                    (B) Draft report.--Prior to the submission of the 
                final report, the Director of the Office of Science and 
                Technology Policy shall publish a draft report in the 
                Federal Register with a comment period of at least 30 
                days.
                    (C) Consultation.--In developing the report, the 
                Director of the Office of Science and Technology Policy 
                shall consult with State, local, and tribal 
                governments, regional entities, the private sector, and 
                other users and stakeholder groups, and Congress.
            (4) Annual report.--The Director of the Office of Science 
        and Technology Policy shall transmit to the Congress at the 
        time of the President's fiscal year 2013 budget request, and 
        annually thereafter, a report on the annual anticipated cost of 
        carrying out the research and operational activities of the 
        National Climate Service, with a description of the budget for 
        each Federal agency's activities.
    (e) Climate Service Program.--
            (1) In general.--The Under Secretary, building upon the 
        resources of the National Weather Service and other weather and 
        climate programs in the National Oceanic and Atmospheric 
        Administration, shall establish a Climate Service Program.
            (2) Climate service office.--The Under Secretary shall 
        establish a Climate Service Office and shall appoint a Director 
        of the Office to collaborate with the leadership of the 
        National Oceanic and Atmospheric Administration line offices to 
        perform the duties assigned to the Office. The Climate Service 
        Office shall--
                    (A) coordinate programs at the National Oceanic and 
                Atmospheric Administration to ensure the timely 
                production and distribution of data and information on 
                global, national, regional, and local climate 
                variability and change over all time scales relevant 
                for planning and response, including intraseasonal, 
                interannual, decadal, and multidecadal time periods;
                    (B) ensure exchange of information between the 
                research and operational offices at the National 
                Oceanic and Atmospheric Administration to identify 
                research needs for improving climate products and 
                services and ensure the timely and orderly transition 
                of research findings, improved technologies, models, 
                and other tools to the National Oceanic and Atmospheric 
                Administration's operations;
                    (C) ensure operational quality control of all 
                Climate Service Program products including a 
                transparent and open accounting of all the assumptions 
                built into the global, national, regional, and local 
                weather and climate computer models upon which such 
                products are based;
                    (D) ensure a continuous level of high-quality data 
                collected through a national observation and monitoring 
                infrastructure, including at a minimum performing 
                regular maintenance and verification, and periodic 
                upgrades;
                    (E) serve as liaison to and exchange information 
                with other Federal agencies that provide climate 
                services in order to--
                            (i) ensure the timely dissemination of data 
                        and information on weather and climate produced 
                        by the National Oceanic and Atmospheric 
                        Administration to other Federal agencies;
                            (ii) ensure that data and information 
                        collected by other Federal agencies relevant to 
                        improving climate services are made available 
                        to the National Oceanic and Atmospheric 
                        Administration;
                            (iii) facilitate the development and 
                        delivery of climate products and services to 
                        relevant stakeholders; and
                            (iv) obtain information from other Federal 
                        agencies to improve the development and 
                        dissemination by the National Oceanic and 
                        Atmospheric Administration of information on 
                        weather and climate to other Federal agencies 
                        for the development of climate service products 
                        by those agencies;
                    (F) ensure cooperation and collaboration, as 
                appropriate, of the Climate Service Program with State, 
                local, and tribal governments, regional entities, 
                academic and nonprofit research organizations, and 
                private sector entities, including weather information 
                providers and other stakeholders; and
                    (G) ensure exchange of data, information, and 
                research with the United States Global Change Research 
                Program to support the development of assessments 
                required under the Global Change Research Act of 1990 
                (15 U.S.C. 2921 et seq.).
            (3) Climate service program.--
                    (A) In general.--The Under Secretary shall operate 
                the Climate Service Program through a national center, 
                the Climate Service Office, and a network of regional 
                and local facilities, including the established 
                regional and local offices of the National Weather 
                Service, 6 Regional Climate Centers, the offices of the 
                Regional Integrated Sciences and Assessments program, 
                the National Integrated Drought Information System, and 
                any other National Oceanic and Atmospheric 
                Administration or National Oceanic and Atmospheric 
                Administration-supported regional and local entities, 
                as appropriate.
                    (B) Regional climate centers program.--The Under 
                Secretary shall maintain a network of 6 Regional 
                Climate Centers to work cooperatively with the State 
                Climate Offices to--
                            (i) collect and exchange data and 
                        information needed to characterize, understand, 
                        and forecast regional and local weather and 
                        climate;
                            (ii) facilitate collection and exchange of 
                        data and information between the States and 
                        Federal Government on weather and climate in 
                        conjunction with the National Climatic Data 
                        Center;
                            (iii) support research and observations;
                            (iv) obtain input on stakeholder needs for 
                        weather and climate information and products; 
                        and
                            (v) support State and local adaptation and 
                        response planning.
                    (C) Regional integrated sciences and assessments 
                program.--The Under Secretary shall maintain a network 
                of offices as part of the Regional Integrated Sciences 
                and Assessments Program. Such offices shall engage in 
                cooperative research, development, and demonstration 
                projects with the academic community, State Climate 
                Offices, Regional Climate Offices, and other users and 
                stakeholders on climate products, technologies, models, 
                and other tools to improve understanding and 
                forecasting of regional and local climate variability 
                and change and the effects on economic activities, 
                natural resources, and water availability, and other 
                effects on communities, to facilitate development of 
                regional and local adaptation plans to respond to 
                climate variability and change, and any other needed 
                research identified by the Under Secretary or the 
                Advisory Committee.
                    (D) Other offices.--In carrying out the functions 
                of the Climate Service Program, the Under Secretary 
                shall utilize the assets and expertise of--
                            (i) the National Weather Service to--
                                    (I) deliver operational weather and 
                                climate forecasts, warnings, products, 
                                and information through the Climate 
                                Service Programs Division, Local 
                                Weather Forecast Offices, Weather 
                                Service Offices, and River Forecast 
                                Centers; and
                                    (II) develop climate forecast 
                                models and tools through the National 
                                Centers for Environmental Prediction;
                            (ii) the National Environmental Satellite, 
                        Data, and Information Service to provide data 
                        services and support for product development 
                        and operations through the National Climatic 
                        Data Center and the Regional Climate Centers;
                            (iii) the Office of Oceanic and Atmospheric 
                        Research to--
                                    (I) provide research on product 
                                development;
                                    (II) improve weather and climate 
                                forecast models;
                                    (III) provide new technologies and 
                                methods of observation; and
                                    (IV) oversee the National Oceanic 
                                and Atmospheric Administration 
                                supported research performed by the 
                                Joint Cooperative Institutes, 
                                universities, and other non-Federal 
                                entities;
                            (iv) the National Integrated Drought 
                        Information System to--
                                    (I) provide an effective drought 
                                warning system;
                                    (II) coordinate and integrate 
                                Federal research on droughts;
                                    (III) collect and integrate 
                                information on key indicators of 
                                drought;
                                    (IV) make usable, reliable, and 
                                timely forecasts and assessments of 
                                drought, including assessments of the 
                                severity of drought conditions and 
                                effects;
                                    (V) communicate drought forecasts, 
                                conditions, and effects to Federal, 
                                State, tribal, and local governments, 
                                regional entities, the private sector, 
                                and the public; and
                                    (VI) coordinate with State Climate 
                                Offices and RISA teams to assess 
                                management practices and technologies, 
                                and the effects of both, used for 
                                drought mitigation at the local, State, 
                                and regional levels; and
                            (v) any other National Oceanic and 
                        Atmospheric Administration offices or programs, 
                        as appropriate.
                    (E) Mission.--The Under Secretary shall ensure that 
                the core functions and missions of the National Weather 
                Service, the National Integrated Drought Information 
                System, and any other programs within the National 
                Oceanic and Atmospheric Administration are not 
                diminished or neglected by the establishment of the 
                Climate Service Program or the duties imposed on such 
                offices or programs under this paragraph.
                    (F) Program elements.--The Climate Service Program 
                shall--
                            (i) conduct analyses of and studies 
                        relating to the effects of weather and climate 
                        on communities, including effects on 
                        agricultural production, natural resources, 
                        energy supply and demand, recreation, and other 
                        sectors of the economy;
                            (ii) carry out observations, data 
                        collection, and monitoring of atmospheric and 
                        oceanic conditions on a statewide, regional, 
                        national, and global basis;
                            (iii) provide information and technical 
                        support for Federal, regional, State, tribal, 
                        and local government efforts to assess and 
                        respond to climate variability and change;
                            (iv) develop systems for the management and 
                        dissemination of data, information, and 
                        assessments, including mechanisms for 
                        consultation with current and potential users 
                        and other stakeholders;
                            (v) conduct research to improve 
                        forecasting, characterization, and 
                        understanding of weather and climate 
                        variability and change and its effects on 
                        communities, including its effects on 
                        agricultural production, natural resources, 
                        energy supply and demand, recreation, and other 
                        sectors of the economy; and
                            (vi) develop tools to facilitate the use of 
                        climate information by local and regional 
                        stakeholders.
    (f) Climate Service Advisory Committee.--
            (1) In general.--The Under Secretary shall establish a 
        Climate Service Advisory Committee to provide advice on--
                    (A) climate service product development;
                    (B) delivery of services to decisionmakers and 
                other stakeholders;
                    (C) infrastructure to support observations and 
                monitoring;
                    (D) computation and modeling needs, research needs, 
                and other resources needed to develop, distribute, and 
                ensure the utility of climate data, products, and 
                services; and
                    (E) any other topics as may be requested by the 
                Under Secretary or Congress.
            (2) Members.--
                    (A) In general.--The Advisory Committee shall be 
                composed of at least 25 members appointed by the Under 
                Secretary. Each member of the Advisory Committee shall 
                be qualified either--
                            (i) by education, training, and experience 
                        to evaluate scientific and technical 
                        information on matters referred to the Advisory 
                        Committee under this subsection; or
                            (ii) to evaluate the utility and need for 
                        climate products by planners, decisionmakers, 
                        the private sector, and the public.
                    (B) Terms of service.--Members shall be appointed 
                for 3-year terms, renewable once, and shall serve at 
                the discretion of the Under Secretary. Vacancy 
                appointments shall be for the remainder of the 
                unexpired term of the vacancy, and an individual so 
                appointed may subsequently be appointed for 2 full 3-
                year terms if the remainder of the unexpired term is 
                less than one year.
                    (C) Chairperson.--The Under Secretary shall 
                designate a chairperson from among the members of the 
                Advisory Committee. The designated Chairperson shall 
                alternate between a member who is appointed as a 
                representative and a member who is appointed as a 
                Special Government Employee.
                    (D) Subcommittees.--
                            (i) Establishment.--The Advisory Committee 
                        shall establish--
                                    (I) a Subcommittee on Science and 
                                Technology to advise the Climate 
                                Service Program on needed research, 
                                technology development, and additional 
                                observations, and on any other 
                                scientific or technical issues as 
                                appropriate; and
                                    (II) a Subcommittee on Product 
                                Development and Delivery composed 
                                primarily of representatives of the 
                                community of potential users of the 
                                products developed and delivered by the 
                                Climate Service Program.
                        The Advisory Committee may establish such 
                        additional subcommittees of its members as may 
                        be necessary.
                            (ii) Appointment.--
                                    (I) Full advisory committee.--At 
                                least 50 percent of the members of the 
                                Advisory Committee shall be appointed 
                                as Special Government Employees.
                                    (II) Subcommittees.--At least 75 
                                percent of the members of the 
                                Subcommittee on Science and Technology 
                                shall be appointed as Special 
                                Government Employees. Not more than 25 
                                percent of the members of the 
                                Subcommittee on Product Development and 
                                Delivery shall be appointed as Special 
                                Government Employees.
            (3) Administrative provisions.--
                    (A) Reporting.--The Advisory Committee shall report 
                to the Under Secretary and the appropriate requesting 
                party.
                    (B) Administrative support.--The Under Secretary 
                shall provide administrative support to the Advisory 
                Committee.
                    (C) Meetings.--The Advisory Committee shall meet at 
                least twice each year and at other times at the call of 
                the Under Secretary or the Chairperson.
                    (D) Compensation and expenses.--A member of the 
                Advisory Committee shall not be compensated for service 
                on the Advisory Committee, but may be allowed travel 
                expenses, including per diem in lieu of subsistence, in 
                accordance with subchapter I of chapter 57 of title 5, 
                United States Code.
            (4) Expiration.--Section 14 of the Federal Advisory 
        Committee Act (5 U.S.C. App.) shall not apply to the Climate 
        Service Advisory Committee.
    (g) Repeal.--The National Climate Program Act (15 U.S.C. 2901 et 
seq.) is repealed.
    (h) Establishment of Regional Integrated Sciences and Assessments 
Teams.--
            (1) In general.--In maintaining the network of Regional 
        Integrated Sciences and Assessments (RISA) Teams under 
        subsection (e)(3)(C), the Under Secretary shall utilize a 
        competitive, peer-reviewed selection process. Teams shall 
        conduct applied regional climate research and projects to 
        address the needs of local and regional decisionmakers for 
        information and tools to develop adaptation and response plans 
        to climate variability and change. The awards shall be 
        administered through a cooperative agreement between the 
        National Oceanic and Atmospheric Administration and the RISA 
        Team. Each award shall be for a period of five years.
            (2) RISA teams.--Teams shall be composed of multi-
        institutional partnerships whose individual members may 
        include--
                    (A) institutions of higher education, as defined in 
                section 101(a) of the Higher Education Act of 1965 (20 
                U.S.C. 1001(a));
                    (B) minority serving institutions, as defined in 
                section 371(a) of the Higher Education Act of 1965; and
                    (C) nongovernmental research organizations, Federal 
                agencies, State and local agencies, tribal 
                organizations, and for-profit entities.
            (3) Considerations.--In making awards under this 
        subsection, the Under Secretary shall consider--
                    (A) the overall geographic distribution of RISA 
                Teams and existing gaps in applied research to support 
                local and regional decisionmakers;
                    (B) the team's ability to contribute to the 
                National Oceanic and Atmospheric Administration's 
                efforts to deliver climate services in the region; and
                    (C) the team's proposal to integrate social and 
                physical sciences research to address the effects of 
                climate variability and change on the ecology, economy, 
                infrastructure, and communities in the region.
    (i) Survey of Need for Climate Services.--
            (1) In general.--The Under Secretary shall provide a report 
        to Congress within 9 months after the date of enactment of this 
        Act that compiles information on the current climate products 
        being delivered by the National Oceanic and Atmospheric 
        Administration and its partner organizations to users and 
        stakeholders and on the needs of users and stakeholders for new 
        climate products and services.
            (2) Contents of report.--The report shall identify--
                    (A) specific user groups and stakeholders that 
                currently are served by the National Oceanic and 
                Atmospheric Administration and its partner 
                organizations;
                    (B) the type of climate products and services 
                currently delivered to specific user groups and 
                stakeholders and the specific National Oceanic and 
                Atmospheric Administration office or partner 
                organization that delivers these products and services;
                    (C) potential user groups and stakeholders that may 
                be served by expanding climate products and services; 
                and
                    (D) specific needs for new climate products and 
                services identified by user groups and stakeholders.
            (3) Consultation.--The Under Secretary shall consult with 
        the Climate Service Advisory Committee in the preparation of 
        this report.
    (j) Implementation Plan.--
            (1) In general.--The Under Secretary shall prepare a plan 
        for creating a Climate Service Program in the National Oceanic 
        and Atmospheric Administration and delivering climate products 
        and services to the National Oceanic and Atmospheric 
        Administration users and stakeholders. The plan shall be 
        submitted to the President and the Congress within 1 year after 
        the date of enactment of this Act.
            (2) Draft plan.--Prior to the submission of the final plan, 
        the Under Secretary shall publish a draft plan in the Federal 
        Register with a public comment period of at least 30 days.
            (3) Contents.--The plan shall--
                    (A) identify the current gaps in climate services 
                and outline the process and resources the National 
                Oceanic and Atmospheric Administration will use to fill 
                these gaps;
                    (B) describe the roles of the National Oceanic and 
                Atmospheric Administration line offices and the 
                National Oceanic and Atmospheric Administration partner 
                organizations in the development and delivery of 
                climate products and services;
                    (C) describe the development and implementation of 
                quality assurance and control mechanisms for climate 
                products and services delivered by the National Oceanic 
                and Atmospheric Administration and its partner 
                organizations;
                    (D) identify the mechanisms and opportunities for 
                determining user needs and engaging in a two-way 
                dialogue with users that will inform climate product 
                and service development and delivery of authoritative, 
                timely, and useful information on climate variability 
                and change and the effects on local, State, regional, 
                national, and global scales;
                    (E) identify new responsibilities or tasks to be 
                undertaken by existing National Oceanic and Atmospheric 
                Administration line offices and partner organizations;
                    (F) identify new infrastructure, equipment, 
                personnel, or other resources needed to implement the 
                proposed plan; and
                    (G) include responses to the comments received 
                during the public comment period.
            (4) Continuity of service.--During the development of the 
        implementation plan, the public comment period, and final plan, 
        the National Oceanic and Atmospheric Administration shall 
        continue to provide climate services to the user community.
            (5) Consultation.--In developing the plan, the Under 
        Secretary shall consult with user groups and stakeholders, 
        State Climate Offices, Regional Climate Centers, other Federal 
        agencies, the Climate Service Advisory Committee, and Congress.
            (6) Coordination with interagency development of a national 
        climate service.--In preparing the plan required under this 
        subsection, the Under Secretary shall consult with the Director 
        of the Office of Science and Technology Policy to ensure that 
        the program developed by the Agency will serve the needs of a 
        National Climate Service.
    (k) Summer Institutes Program at the Regional Climate Centers.--
            (1) Definitions.--In this subsection:
                    (A) Summer institute.--The term ``summer 
                institute'' means an institute, operated during the 
                summer, that--
                            (i) is hosted by a Regional Climate Center 
                        or an eligible partner;
                            (ii) is operated for a period of not less 
                        than 2 weeks; and
                            (iii) provides direct interaction of middle 
                        school and high school teacher and 
                        undergraduate student participants with 
                        personnel of the Regional Climate Centers or 
                        eligible partners who have scientific expertise 
                        in weather and climate.
                    (B) Eligible partner.--The term ``eligible 
                partner'' means--
                            (i) the science, engineering, or 
                        mathematics department at an institution of 
                        higher education; or
                            (ii) a nonprofit entity with expertise in 
                        providing educational enrichment experiences 
                        for students.
            (2) Summer institutes program authorized.--
                    (A) In general.--The Under Secretary shall 
                establish a summer institutes program, to be conducted 
                in cooperation with the Regional Climate Centers, which 
                may include an eligible partner. The purpose of the 
                program is to provide training and professional 
                enrichment by providing opportunities for interaction 
                between participants and climate scientists in a 
                research and operational setting to--
                            (i) enable middle school and high school 
                        teachers to integrate weather and climate 
                        sciences into their curricula: and
                            (ii) encourage undergraduate students to 
                        pursue further study and careers in weather and 
                        climate sciences.
                    (B) Required activities.--Funds authorized under 
                this subsection shall be used for--
                            (i) providing educational opportunities for 
                        middle school and high school teachers and 
                        undergraduate students not achievable inside 
                        the classroom;
                            (ii) exposing such teachers and students to 
                        researchers, scientists, or engineers who can 
                        demonstrate their daily activities to the 
                        teachers and students;
                            (iii) exposing teachers and students to 
                        scientific methods in a research discovery 
                        setting; and
                            (iv) assisting teachers with curriculum 
                        development in the areas of weather and climate 
                        science.
            (3) Priority.--The Under Secretary shall ensure that each 
        summer institute program authorized under paragraph (2) 
        includes students from groups underrepresented in the fields of 
        science, technology, engineering, and mathematics teaching, 
        including women and members of minority groups.
            (4) Report to congress.--The Under Secretary shall submit 
        to Congress a biennial report on the activities conducted under 
        this subsection, including the number of participants and the 
        new curricula developed in atmospheric and climate sciences.
    (l) Clearinghouse of Federal Climate Service Products and Links to 
Federal Agencies Providing Climate Services.--
            (1) In general.--The Under Secretary shall establish and 
        maintain a clearinghouse to inform State, local, and tribal 
        governments and the public about the information and services 
        available to--
                    (A) assess the impacts of climate variability and 
                change at different geographic scales;
                    (B) characterize and forecast climate variability 
                and change for specific regions, resources, and 
                economic sectors; and
                    (C) develop and implement adaptation strategies to 
                reduce vulnerabilities to climate variability and 
                change.
            (2) Other resources.--The clearinghouse shall include 
        hyperlinks to Internet sites that describe the activities, 
        information, and resources of--
                    (A) the Federal Government;
                    (B) State and local governments;
                    (C) the private sector;
                    (D) nongovernmental and nonprofit entities and 
                organizations; and
                    (E) international organizations.
    (m) Financial Burden.--Nothing in this section shall be construed 
as authorizing the National Climate Service or the Climate Service 
Program at the National Oceanic and Atmospheric Administration to 
require State, tribal, or local governments to develop adaptation or 
response plans or to take any other action in response to variations in 
climate that may result in an increased financial burden to such 
governments.

SEC. 453. STATE PROGRAMS TO BUILD RESILIENCE TO CLIMATE CHANGE IMPACTS.

    (a) Definitions.--For purposes of this section:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act 
        (as added by section 311 of this Act).
            (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (3) Vintage year.--The term ``vintage year'' has the 
        meaning given that term under section 700 of the Clean Air Act 
        (as added by section 312 of this Act).
    (b) Regulations; Coordination.--Not later than 2 years after the 
date of enactment of this Act, the Administrator, or such Federal 
agency head or heads as the President may designate, shall promulgate 
regulations to implement the requirements of this section. If the 
President designates more than 1 Federal agency to implement this 
section, the President shall require such agencies to establish a 
memorandum of understanding providing for coordination of rulemaking 
and other implementing activities, in accordance with the requirements 
of this section.
    (c) Distribution of Allowances.--
            (1) In general.--Not later than September 30 of each of 
        calendar years 2011 through 2049, the Administrator shall 
        distribute, in accordance with this section, allowances 
        allocated for the following vintage year pursuant to section 
        782(l) of the Clean Air Act (as added by section 321 of this 
        Act). The Administrator shall reserve 1 percent of such 
        allowances for distribution to Indian tribes in accordance with 
        subsection (d). The remainder of such allowances shall be 
        distributed ratably among the States based on the product of--
                    (A) each State's population; and
                    (B) each State's allocation factor as determined 
                under paragraph (2).
            (2) State allocation factors.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the allocation factor for a State shall be the 
                quotient of--
                            (i) the per capita income of all 
                        individuals in the United States, divided by
                            (ii) the per capita income of all 
                        individuals in such State.
                    (B) Limitation.--If the allocation factor for a 
                State as calculated under subparagraph (A) would exceed 
                1.2, then the allocation factor for such State shall be 
                1.2. If the allocation factor for a State as calculated 
                under subparagraph (A) would be less than 0.8, then the 
                allocation factor for such State shall be 0.8.
                    (C) Per capita income.--For purposes of this 
                paragraph, per capita income shall be--
                            (i) determined at 2-year intervals; and
                            (ii) subject to subparagraph (D), equal to 
                        the average of the annual per capita incomes 
                        for the most recent period of 3 consecutive 
                        years for which satisfactory data are available 
                        from the Department of Commerce at the time 
                        such determination is made.
                    (D) Revenue directly resulting from a 
                presidentially declared major disaster.--For purposes 
                of this paragraph, per capita income from one or more 
                of the following sources shall be reduced or excluded 
                if the Secretary of Commerce (in consultation with the 
                Administrator and the secretaries or administrators of 
                the departments or agencies involved) determines that 
                the income accrues to persons as the result of a Major 
                Disaster (as declared by the President of the United 
                States) and if the Secretary finds that the inclusion 
                of one or more of these income sources, in whole or in 
                part, results in a transitory, rather than a 
                sustainable, increase in a State's per capita income 
                level relative to the national average:
                            (i) Property and casualty insurance 
                        (including homeowners and renters insurance).
                            (ii) The National Flood Insurance Program 
                        of the Federal Emergency Management Agency.
                            (iii) The Individual and Family Grants 
                        Program of the Federal Emergency Management 
                        Agency.
                            (iv) The Disaster Housing Program of the 
                        Federal Emergency Management Agency.
                            (v) The Community Development Block Grant 
                        Program of the Department of Housing and Urban 
                        Development.
                            (vi) The Disaster Unemployment Assistance 
                        Program of the Department of Labor.
                            (vii) Any other source determined 
                        appropriate by the Administrator.
    (d) Distribution to Indian Tribes.--The Administrator, or such 
Federal agency head or heads as the President may designate, shall 
promulgate regulations establishing a program to distribute allowances 
on a competitive basis to Indian tribes, in accordance with the 
requirements of this section. Such allowances shall be used exclusively 
in accordance with the requirements of subsection (e). Beginning with 
vintage year 2015, Indian tribes with a tribal adaptation plan approved 
pursuant to subsection (f) shall be given priority in selection of 
programs or projects for receipt of emission allowances under this 
subsection.
    (e) Use of Allowances.--
            (1) In general.--States and Indian tribes shall use 
        allowances distributed under this section exclusively for the 
        implementation of projects, programs, or measures to build 
        resilience to the impacts of climate change, including--
                    (A) extreme weather events such as flooding and 
                tropical cyclones;
                    (B) more frequent heavy precipitation events;
                    (C) water scarcity and adverse impacts on water 
                quality;
                    (D) stronger and longer heat waves;
                    (E) more frequent and severe droughts;
                    (F) rises in sea level;
                    (G) ecosystem disruption;
                    (H) increased air pollution; and
                    (I) effects on public health.
            (2) Priority in projects to reduce flood events.--When 
        implementing any project, program, or measure supported under 
        this section and designed to reduce flood events, a State or 
        Indian tribe should consider prioritizing projects that seek 
        to--
                    (A) mitigate the destructive impacts of climate-
                related increases in the duration, frequency, or 
                magnitude of rainfall or runoff, including snowmelt 
                runoff, as well as hurricanes;
                    (B) improve flood protection for densely populated 
                urban areas; and
                    (C) mitigate the destructive impact of ocean-
                related climate change effects, including effects on 
                bays, estuaries, populated barrier islands and other 
                ocean-related features, through a variety of means and 
                measures, including the construction of jetties, 
                levies, and other coastal structures in densely 
                populated coastal areas impacted by climate change.
            (3) State and tribal adaptation plans.--Upon approval of a 
        State or tribal climate adaptation plan under subsection (f), 
        allowances received by a State under this section shall be used 
        in accordance with such plan.
            (4) Supplement, not supplant.--It is the intent of the 
        Congress that allowances distributed to carry out this section 
        should be used to supplement, and not replace, existing sources 
        of funding used to build resilience to the impacts of climate 
        change identified in paragraph (1).
    (f) State and Tribal Climate Adaptation Plans.--
            (1) In general.--The regulations promulgated pursuant to 
        subsection (b) shall include requirements for submission and 
        approval of State or tribal climate adaptation plans under this 
        section. Beginning with vintage year 2015, distribution of 
        allowances to a State pursuant to this section shall be 
        contingent on approval of a State climate adaptation plan for 
        such State that meets the requirements of such regulations. 
        Requirements for tribal climate adaptation plans may vary from 
        those of State adaptation plans to the extent necessary to 
        account for the special circumstances of Indian tribes.
            (2) Requirements.--Regulations promulgated under this 
        section shall require, at minimum, that State and tribal 
        climate adaptation plans--
                    (A) assess and prioritize the State's or Indian 
                tribe's vulnerability to a broad range of impacts of 
                climate change, based on the best available science;
                    (B) include an assessment of potential for carbon 
                reduction through changes to land management policies 
                (including enhancement or protection of forest carbon 
                sinks);
                    (C) identify and prioritize specific cost-effective 
                projects, programs, and measures to build resilience to 
                current and predicted impacts of climate change;
                    (D) ensure that the State or Indian tribe fully 
                considers and undertakes, to the maximum extent 
                practicable, initiatives that--
                            (i) protect or enhance natural ecosystem 
                        functions, including protection, maintenance, 
                        or restoration of natural infrastructure such 
                        as wetlands, reefs, and barrier islands to 
                        buffer communities from floodwaters or storms, 
                        watershed protection to maintain water quality 
                        and groundwater recharge, or floodplain 
                        restoration to improve natural flood control 
                        capacity; or
                            (ii) use non-structural approaches 
                        including practices that utilize, enhance, or 
                        mimic the natural hydrologic cycle processes of 
                        infiltration, evapotranspiration, and reuse;
                    (E) be revised and resubmitted for approval not 
                less frequently than every 5 years; and
                    (F) be consistent with Federal conservation and 
                environmental laws and, to the maximum extent 
                practicable, avoid environmental degradation.
            (3) Coordination with prior planning efforts.--In 
        implementing this subsection, the Administrator, or such 
        Federal agency head or heads as the President may designate, 
        shall--
                    (A) draw upon lessons learned and best practices 
                from preexisting State and tribal climate adaptation 
                planning efforts;
                    (B) seek to avoid duplication of such efforts; and
                    (C) ensure that the plans developed under this 
                section reflect and are fully consistent with State 
                natural resources adaptation plans developed under 
                section 479 of this Act.
    (g) Reporting.--Each State or Indian tribe receiving allowances 
under this section shall submit to the Administrator, or such Federal 
agency head or heads as the President may designate, within 12 months 
after each receipt of such allowances and once every 2 years thereafter 
until the value of any allowances received under this section has been 
fully expended, a report that--
            (1) provides a full accounting for the State's or Indian 
        tribe's use of allowances distributed under this section, 
        including a description of the projects, programs, or measures 
        supported using such allowances;
            (2) includes a report prepared by an independent third 
        party, in accordance with such regulations as are promulgated 
        by the Administrator or such other Federal agency head or heads 
        as the President may designate, evaluating the performance of 
        the projects, programs, or measures supported under this 
        section; and
            (3) identifies any use by the State or Indian tribe of 
        allowances distributed under this section for the reduction of 
        flood and storm damage and the effects of climate change on 
        water and flood protection infrastructure.
    (h) Enforcement.--If the Administrator, or such Federal agency head 
or heads as the President may designate, determines that a State or 
Indian tribe is not in compliance with this section, the Administrator 
or such other agency head may withhold a quantity of the allowances 
equal to up to twice the quantity of allowances that the State or 
Indian tribe failed to use in accordance with the requirements of this 
section, that such State or Indian tribe would otherwise be eligible to 
receive under this section in 1 or more later years. Allowances 
withheld pursuant to this subsection shall be distributed among the 
remaining States or Indian tribes ratably in accordance with the 
formula in subsection (c) in the case of allowances withheld from a 
State, or in accordance with subsection (d) in the case of allowances 
withheld from an Indian tribe.

              Subpart B--Public Health and Climate Change

SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND CLIMATE CHANGE.

    It is the sense of the Congress that the Federal Government, in 
cooperation with international, State, tribal, and local governments, 
concerned public and private organizations, and citizens, should use 
all practicable means and measures--
            (1) to assist the efforts of public health and health care 
        professionals, first responders, States, tribes, 
        municipalities, and local communities to incorporate measures 
        to prepare health systems to respond to the impacts of climate 
        change;
            (2) to ensure--
                    (A) that the Nation's health professionals have 
                sufficient information to prepare for and respond to 
                the adverse health impacts of climate change;
                    (B) the utility and value of scientific research in 
                advancing understanding of--
                            (i) the health impacts of climate change; 
                        and
                            (ii) strategies to prepare for and respond 
                        to the health impacts of climate change;
                    (C) the identification of communities vulnerable to 
                the health effects of climate change and the 
                development of strategic response plans to be carried 
                out by health professionals for those communities;
                    (D) the improvement of health status and health 
                equity through efforts to prepare for and respond to 
                climate change; and
                    (E) the inclusion of health policy in the 
                development of climate change responses;
            (3) to encourage further research, interdisciplinary 
        partnership, and collaboration among stakeholders in order to--
                    (A) understand and monitor the health impacts of 
                climate change; and
                    (B) improve public health knowledge and response 
                strategies to climate change;
            (4) to enhance preparedness activities, and public health 
        infrastructure, relating to climate change and health;
            (5) to encourage each and every American to learn about the 
        impacts of climate change on health; and
            (6) to assist the efforts of developing nations to 
        incorporate measures to prepare health systems to respond to 
        the impacts of climate change.

SEC. 462. RELATIONSHIP TO OTHER LAWS.

    Nothing in this subpart in any manner limits the authority provided 
to or responsibility conferred on any Federal department or agency by 
any provision of any law (including regulations) or authorizes any 
violation of any provision of any law (including regulations), 
including any health, energy, environmental, transportation, or any 
other law or regulation.

SEC. 463. NATIONAL STRATEGIC ACTION PLAN.

    (a) Requirement.--
            (1) In general.--The Secretary of Health and Human 
        Services, within 2 years after the date of the enactment of 
        this Act, on the basis of the best available science, and in 
        consultation pursuant to paragraph (2), shall publish a 
        strategic action plan to assist health professionals in 
        preparing for and responding to the impacts of climate change 
        on public health in the United States and other nations, 
        particularly developing nations.
            (2) Consultation.--In developing or making any revision to 
        the national strategic action plan, the Secretary shall--
                    (A) consult with the Director of the Centers for 
                Disease Control and Prevention, the Administrator of 
                the Environmental Protection Agency, the Director of 
                the National Institutes of Health, the Secretary of 
                Energy, other appropriate Federal agencies, Indian 
                tribes, State and local governments, public health 
                organizations, scientists, and other interested 
                stakeholders; and
                    (B) provide opportunity for public input.
    (b) Contents.--
            (1) In general.--The Secretary, acting through the Director 
        of the Centers for Disease Control and Prevention and other 
        appropriate Federal agencies, shall assist health professionals 
        in preparing for and responding effectively and efficiently to 
        the health effects of climate change through measures 
        including--
                    (A) developing, improving, integrating, and 
                maintaining domestic and international disease 
                surveillance systems and monitoring capacity to respond 
                to health-related effects of climate change, including 
                on topics addressing--
                            (i) water, food, and vector borne 
                        infectious diseases and climate change;
                            (ii) pulmonary effects, including responses 
                        to aeroallergens;
                            (iii) cardiovascular effects, including 
                        impacts of temperature extremes;
                            (iv) air pollution health effects, 
                        including heightened sensitivity to air 
                        pollution;
                            (v) hazardous algal blooms;
                            (vi) mental and behavioral health impacts 
                        of climate change;
                            (vii) the health of refugees, displaced 
                        persons, and vulnerable communities;
                            (viii) the implications for communities 
                        vulnerable to health effects of climate change, 
                        as well as strategies for responding to climate 
                        change within these communities; and
                            (ix) local and community-based health 
                        interventions for climate-related health 
                        impacts;
                    (B) creating tools for predicting and monitoring 
                the public health effects of climate change on the 
                international, national, regional, State, and local 
                levels, and providing technical support to assist in 
                their implementation;
                    (C) developing public health communications 
                strategies and interventions for extreme weather events 
                and disaster response situations;
                    (D) identifying and prioritizing communities and 
                populations vulnerable to the health effects of climate 
                change, and determining actions and communication 
                strategies that should be taken to inform and protect 
                these communities and populations from the health 
                effects of climate change;
                    (E) developing health communication, public 
                education, and outreach programs aimed at public health 
                and health care professionals, as well as the general 
                public, to promote preparedness and response strategies 
                relating to climate change and public health, including 
                the identification of greenhouse gas reduction 
                behaviors that are health-promoting; and
                    (F) developing academic and regional centers of 
                excellence devoted to--
                            (i) researching relationships between 
                        climate change and health;
                            (ii) expanding and training the public 
                        health workforce to strengthen the capacity of 
                        such workforce to respond to and prepare for 
                        the health effects of climate change;
                            (iii) creating and supporting academic 
                        fellowships focusing on the health effects of 
                        climate change; and
                            (iv) training senior health ministry 
                        officials from developing nations to strengthen 
                        the capacity of such nations to--
                                    (I) prepare for and respond to the 
                                health effects of climate change; and
                                    (II) build an international network 
                                of public health professionals with the 
                                necessary climate change knowledge 
                                base;
                    (G) using techniques, including health impact 
                assessments, to assess various climate change public 
                health preparedness and response strategies on 
                international, national, State, regional, tribal, and 
                local levels, and make recommendations as to those 
                strategies that best protect the public health;
                    (H)(i) assisting in the development, 
                implementation, and support of State, regional, tribal, 
                and local preparedness, communication, and response 
                plans (including with respect to the health departments 
                of such entities) to anticipate and reduce the health 
                threats of climate change; and
                    (ii) pursuing collaborative efforts to develop, 
                integrate, and implement such plans;
                    (I) creating a program to advance research as it 
                relates to the effects of climate change on public 
                health across Federal agencies, including research to--
                            (i) identify and assess climate change 
                        health effects preparedness and response 
                        strategies;
                            (ii) prioritize critical public health 
                        infrastructure projects related to potential 
                        climate change impacts that affect public 
                        health; and
                            (iii) coordinate preparedness for climate 
                        change health impacts, including the 
                        development of modeling and forecasting tools;
                    (J) providing technical assistance for the 
                development, implementation, and support of 
                preparedness and response plans to anticipate and 
                reduce the health threats of climate change in 
                developing nations; and
                    (K) carrying out other activities determined 
                appropriate by the Secretary to plan for and respond to 
                the impacts of climate change on public health.
    (c) Revision.--The Secretary shall revise the national strategic 
action plan not later than July 1, 2014, and every 4 years thereafter, 
to reflect new information collected pursuant to implementation of the 
national strategic action plan and otherwise, including information 
on--
            (1) the status of critical environmental health parameters 
        and related human health impacts;
            (2) the impacts of climate change on public health; and
            (3) advances in the development of strategies for preparing 
        for and responding to the impacts of climate change on public 
        health.
    (d) Implementation.--
            (1) Implementation through hhs.--The Secretary shall 
        exercise the Secretary's authority under this subpart and other 
        provisions of Federal law to achieve the goals and measures of 
        the national strategic action plan.
            (2) Other public health programs and initiatives.--The 
        Secretary and Federal officials of other relevant Federal 
        agencies shall administer public health programs and 
        initiatives authorized by provisions of law other than this 
        subpart, subject to the requirements of such statutes, in a 
        manner designed to achieve the goals of the national strategic 
        action plan.
            (3) CDC.--In furtherance of the national strategic action 
        plan, the Secretary, acting through the Director of the Centers 
        for Disease Control and Prevention and the head of any other 
        appropriate Federal agency, shall--
                    (A) conduct scientific research to assist health 
                professionals in preparing for and responding to the 
                impacts of climate change on public health; and
                    (B) provide funding for--
                            (i) research on the health effects of 
                        climate change; and
                            (ii) preparedness planning on the 
                        international, national, State, tribal, 
                        regional, and local levels to respond to or 
                        reduce the burden of health effects of climate 
                        change; and
                    (C) carry out other activities determined 
                appropriate by the Director or the head of such agency 
                to prepare for and respond to the impacts of climate 
                change on public health.

SEC. 464. ADVISORY BOARD.

    (a) Establishment.--The Secretary shall establish a permanent 
science advisory board comprised of not less than 10 and not more than 
20 members.
    (b) Appointment of Members.--The Secretary shall appoint the 
members of the science advisory board from among individuals--
            (1) who have expertise in public health and human services, 
        climate change, and other relevant disciplines; and
            (2) at least \1/2\ of whom are recommended by the President 
        of the National Academy of Sciences.
    (c) Functions.--The science advisory board shall--
            (1) provide scientific and technical advice and 
        recommendations to the Secretary on the domestic and 
        international impacts of climate change on public health, 
        populations and regions particularly vulnerable to the effects 
        of climate change, and strategies and mechanisms to prepare for 
        and respond to the impacts of climate change on public health; 
        and
            (2) advise the Secretary regarding the best science 
        available for purposes of issuing the national strategic action 
        plan.

SEC. 465. REPORTS.

    (a) Needs Assessment.--
            (1) In general.--The Secretary shall seek to enter into, by 
        not later than 6 months after the date of the enactment of this 
        Act, an agreement with the National Research Council and the 
        Institute of Medicine to complete a report that--
                    (A) assesses the needs for health professionals to 
                prepare for and respond to climate change impacts on 
                public health; and
                    (B) recommends programs to meet those needs.
            (2) Submission.--The agreement under paragraph (1) shall 
        require the completed report to be submitted to the Congress 
        and the Secretary and made publicly available not later than 1 
        year after the date of the agreement.
    (b) Climate Change Health Protection and Promotion Reports.--
            (1) In general.--The Secretary, in consultation with the 
        advisory board established under section 464, shall ensure the 
        issuance of reports to aid health professionals in preparing 
        for and responding to the adverse health effects of climate 
        change that--
                    (A) review scientific developments on health 
                impacts of climate change; and
                    (B) recommend changes to the national strategic 
                action plan.
            (2) Submission.--The Secretary shall submit the reports 
        required by paragraph (1) to the Congress and make such reports 
        publicly available not later than July 1, 2013, and every 4 
        years thereafter.

SEC. 466. DEFINITIONS.

    In this subpart:
            (1) Health impact assessment.--The term ``health impact 
        assessment'' means a combination of procedures, methods, and 
        tools by which a policy, program, or project may be judged as 
        to its potential effects on the health of a population, and the 
        distribution of those effects within the population.
            (2) National strategic action plan.--The term ``national 
        strategic action plan'' means the plan issued and revised under 
        section 463.
            (3) Secretary.--Unless otherwise specified, the term 
        ``Secretary'' means the Secretary of Health and Human Services.

SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND PROMOTION FUND.

    (a) Establishment of Fund.--There is hereby established in the 
Treasury a separate account that shall be known as the Climate Change 
Health Protection and Promotion Fund.
    (b) Availability of Amounts.--All amounts deposited into the 
Climate Change Health Protection and Promotion Fund shall be available 
to the Secretary to carry out this subpart subject to further 
appropriation.
    (c) Distribution of Funds by HHS.--In carrying out this subpart, 
the Secretary may make funds deposited in the Climate Change Health 
Protection and Promotion Fund available to--
            (1) other departments, agencies, and offices of the Federal 
        Government;
            (2) foreign, State, tribal, and local governments; and
            (3) such other entities as the Secretary determines 
        appropriate.
    (d) Supplement, Not Replace.--It is the intent of Congress that 
funds made available to carry out this subpart should be used to 
supplement, and not replace, existing sources of funding for public 
health.

                 Subpart C--Natural Resource Adaptation

SEC. 471. PURPOSES.

    The purposes of this subpart are to--
            (1) establish an integrated Federal program to protect, 
        restore, and conserve the Nation's natural resources in 
        response to the threats of climate change and ocean 
        acidification; and
            (2) provide financial support and incentives for programs, 
        strategies, and activities that protect, restore, and conserve 
        the Nation's natural resources in response to the threats of 
        climate change and ocean acidification.

SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION POLICY.

    It is the policy of the Federal Government, in cooperation with 
State and local governments, Indian tribes, and other interested 
stakeholders to use all practicable means and measures to protect, 
restore, and conserve natural resources to enable them to become more 
resilient, adapt to, and withstand the impacts of climate change and 
ocean acidification.

SEC. 473. DEFINITIONS.

    In this subpart:
            (1) Coastal state.--The term ``coastal State'' has the 
        meaning given the term in section 304 of the Coastal Zone 
        Management Act of 1972 (16 U.S.C. 1453).
            (2) Corridors.--The term ``corridors'' means areas that 
        provide connectivity, over different time scales (including 
        seasonal or longer), of habitat or potential habitat and that 
        facilitate the ability of terrestrial, marine, estuarine, and 
        freshwater fish, wildlife, or plants to move within a landscape 
        as needed for migration, gene flow, or dispersal, or in 
        response to the impacts of climate change and ocean 
        acidification or other impacts.
            (3) Ecological processes.--The term ``ecological 
        processes'' means biological, chemical, or physical interaction 
        between the biotic and abiotic components of an ecosystem and 
        includes--
                    (A) nutrient cycling;
                    (B) pollination;
                    (C) predator-prey relationships;
                    (D) soil formation;
                    (E) gene flow;
                    (F) disease epizootiology;
                    (G) larval dispersal and settlement;
                    (H) hydrological cycling;
                    (I) decomposition; and
                    (J) disturbance regimes such as fire and flooding.
            (4) Habitat.--The term ``habitat'' means the physical, 
        chemical, and biological properties that are used by fish, 
        wildlife, or plants for growth, reproduction, survival, food, 
        water, and cover, on a tract of land, in a body of water, or in 
        an area or region.
            (5) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (6) Natural resources.--The term ``natural resources'' 
        means the terrestrial, freshwater, estuarine, and marine fish, 
        wildlife, plants, land, water, habitats, and ecosystems of the 
        United States.
            (7) Natural resources adaptation.--The term ``natural 
        resources adaptation'' means the protection, restoration, and 
        conservation of natural resources to enable them to become more 
        resilient, adapt to, and withstand the impacts of climate 
        change and ocean acidification.
            (8) Resilience.--Each of the terms ``resilience'' and 
        ``resilient'' means the ability to resist or recover from 
        disturbance and preserve diversity, productivity, and 
        sustainability.
            (9) State.--The term ``State'' means--
                    (A) a State of the United States;
                    (B) the District of Columbia; and
                    (C) the Commonwealth of Puerto Rico, Guam, the 
                United States Virgin Islands, the Northern Mariana 
                Islands, and American Samoa.

SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY.

    The Chair of the Council on Environmental Quality shall--
            (1) advise the President on implementation and development 
        of--
                    (A) a Natural Resources Climate Change Adaptation 
                Strategy required under section 476; and
                    (B) Federal natural resource agency adaptation 
                plans required under section 478;
            (2) serve as the Chair of the Natural Resources Climate 
        Change Adaptation Panel established under section 475; and
            (3) coordinate Federal agency strategies, plans, programs, 
        and activities related to protecting, restoring, and 
        maintaining natural resources to become more resilient, adapt 
        to, and withstand the impacts of climate change and ocean 
        acidification.

SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION PANEL.

    (a) Establishment.--Not later than 90 days after the date of the 
enactment of this subpart, the President shall establish a Natural 
Resources Climate Change Adaptation Panel, consisting of--
            (1) the head, or their designee, of each of--
                    (A) the National Oceanic and Atmospheric 
                Administration;
                    (B) the Forest Service;
                    (C) the National Park Service;
                    (D) the United States Fish and Wildlife Service;
                    (E) the Bureau of Land Management;
                    (F) the United States Geological Survey;
                    (G) the Bureau of Reclamation;
                    (H) the Bureau of Indian Affairs;
                    (I) the Environmental Protection Agency; and
                    (J) the Army Corps of Engineers;
            (2) the Chair of the Council on Environmental Quality; and
            (3) the heads of such other Federal agencies or departments 
        with jurisdiction over natural resources of the United States, 
        as determined by the President.
    (b) Functions.--The Panel shall serve as a forum for interagency 
consultation on and the coordination of the development and 
implementation of a national Natural Resources Climate Change 
Adaptation Strategy required under section 476.
    (c) Chair.--The Chair of the Council on Environmental Quality shall 
serve as the Chair of the Panel.

SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION STRATEGY.

    (a) In General.--Not later than one year after the date of the 
enactment of this subpart, the President, through the Natural Resources 
Climate Change Adaptation Panel established under section 475, shall 
develop a Natural Resources Climate Change Adaptation Strategy to 
protect, restore, and conserve natural resources to enable them to 
become more resilient, adapt to, and withstand the impacts of climate 
change and ocean acidification and to identify opportunities to 
mitigate those impacts.
    (b) Development and Revision.--In developing and revising the 
Strategy, the Panel shall--
            (1) base the strategy on the best available science;
            (2) develop the strategy in close cooperation with States 
        and Indian tribes;
            (3) coordinate with other Federal agencies as appropriate;
            (4) consult with local governments, conservation 
        organizations, scientists, and other interested stakeholders;
            (5) provide public notice and opportunity for comment; and
            (6) review and revise the Strategy every 5 years to 
        incorporate new information regarding the impacts of climate 
        change and ocean acidification on natural resources and 
        advances in the development of strategies for becoming more 
        resilient and adapting to those impacts.
    (c) Contents.--The National Resources Adaptation Strategy shall 
include--
            (1) an assessment of the vulnerability of natural resources 
        to climate change and ocean acidification, including the short-
        term, medium-term, long-term, cumulative, and synergistic 
        impacts;
            (2) a description of current research, observation, and 
        monitoring activities at the Federal, State, tribal, and local 
        level related to the impacts of climate change and ocean 
        acidification on natural resources, as well as identification 
        of research and data needs and priorities;
            (3) identification of natural resources that are likely to 
        have the greatest need for protection, restoration, and 
        conservation because of the adverse effects of climate change 
        and ocean acidification;
            (4) specific protocols for integrating climate change and 
        ocean acidification adaptation strategies and activities into 
        the conservation and management of natural resources by Federal 
        departments and agencies to ensure consistency across agency 
        jurisdictions and resources;
            (5) specific actions that Federal departments and agencies 
        shall take to protect, conserve, and restore natural resources 
        to become more resilient, adapt to, and withstand the impacts 
        of climate change and ocean acidification, including a timeline 
        to implement those actions;
            (6) specific mechanisms for ensuring communication and 
        coordination among Federal departments and agencies, and 
        between Federal departments and agencies and State natural 
        resource agencies, United States territories, Indian tribes, 
        private landowners, conservation organizations, and other 
        nations that share jurisdiction over natural resources with the 
        United States;
            (7) specific actions to develop and implement consistent 
        natural resources inventory and monitoring protocols through 
        interagency coordination and collaboration; and
            (8) a process for guiding the development of detailed 
        agency- and department-specific adaptation plans required under 
        section 478 to address the impacts of climate change and ocean 
        acidification on the natural resources in the jurisdiction of 
        each agency.
    (d) Implementation.--Consistent with its authorities under other 
laws and with Federal trust responsibilities with respect to Indian 
lands, each Federal department or agency with representation on the 
National Resources Climate Change Adaptation Panel shall consider the 
impacts of climate change and ocean acidification and integrate the 
elements of the strategy into agency plans, environmental reviews, 
programs, and activities related to the conservation, restoration, and 
management of natural resources.

SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE AND INFORMATION.

    (a) Coordination.--Not later than 90 days after the date of the 
enactment of this subpart, the Secretary of Commerce, acting through 
the Administrator of the National Oceanic and Atmospheric 
Administration, and the Secretary of the Interior, acting through the 
Director of the United States Geological Survey, shall establish a 
coordinated process for developing and providing science and 
information needed to assess and address the impacts of climate change 
and ocean acidification on natural resources. The process shall be led 
by the National Climate Change and Wildlife Science Center established 
within the United States Geological Survey under subsection (d) and the 
National Climate Service of the National Oceanic and Atmospheric 
Administration.
    (b) Functions.--The Secretaries shall ensure that such process 
avoids duplication and that the National Oceanic and Atmospheric 
Administration and the United States Geological Survey shall--
            (1) provide technical assistance to Federal departments and 
        agencies, State and local governments, Indian tribes, and 
        interested private landowners in their efforts to assess and 
        address the impacts of climate change and ocean acidification 
        on natural resources;
            (2) conduct and sponsor research and provide Federal 
        departments and agencies, State and local governments, Indian 
        tribes, and interested private landowners with research 
        products, decision and monitoring tools and information, to 
        develop strategies for assisting natural resources to become 
        more resilient, adapt to, and withstand the impacts of climate 
        change and ocean acidification; and
            (3) assist Federal departments and agencies in the 
        development of the adaptation plans required under section 478.
    (c) Survey.--Not later than one year after the date of enactment of 
this subpart and every 5 years thereafter, the Secretary of Commerce 
and the Secretary of the Interior shall undertake a climate change and 
ocean acidification impact survey that--
            (1) identifies natural resources considered likely to be 
        adversely affected by climate change and ocean acidification;
            (2) includes baseline monitoring and ongoing trend 
        analysis;
            (3) uses a stakeholder process to identify and prioritize 
        needed monitoring and research that is of greatest relevance to 
        the ongoing needs of natural resource managers to address the 
        impacts of climate change and ocean acidification; and
            (4) identifies decision tools necessary to develop 
        strategies for assisting natural resources to become more 
        resilient and adapt to and withstand the impacts of climate 
        change and ocean acidification.
    (d) National Climate Change and Wildlife Science Center.--
            (1) Establishment.--The Secretary of the Interior shall 
        establish the National Climate Change and Wildlife Science 
        Center within the United States Geological Survey.
            (2) Functions.--The Center shall, in collaboration with 
        Federal and State natural resources agencies and departments, 
        Indian tribes, universities, and other partner organizations--
                    (A) assess and synthesize current physical and 
                biological knowledge and prioritize scientific gaps in 
                such knowledge in order to forecast the ecological 
                impacts of climate change on fish and wildlife at the 
                ecosystem, habitat, community, population, and species 
                levels;
                    (B) develop and improve tools to identify, 
                evaluate, and, where appropriate, link scientific 
                approaches and models for forecasting the impacts of 
                climate change and adaptation on fish, wildlife, 
                plants, and their habitats, including monitoring, 
                predictive models, vulnerability analyses, risk 
                assessments, and decision support systems to help 
                managers make informed decisions;
                    (C) develop and evaluate tools to adaptively manage 
                and monitor the effects of climate change on fish and 
                wildlife at national, regional, and local scales; and
                    (D) develop capacities for sharing standardized 
                data and the synthesis of such data.
    (e) Science Advisory Board.--
            (1) Establishment.--Not later than 180 days after the date 
        of enactment of this subpart, the Secretary of Commerce and the 
        Secretary of the Interior shall establish and appoint the 
        members of a Science Advisory Board, to be comprised of not 
        fewer than 10 and not more than 20 members--
                    (A) who have expertise in fish, wildlife, plant, 
                aquatic, and coastal and marine biology, ecology, 
                climate change, ocean acidification, and other relevant 
                scientific disciplines;
                    (B) who represent a balanced membership among 
                Federal, State, Indian tribes, and local 
                representatives, universities, and conservation 
                organizations; and
                    (C) at least \1/2\ of whom are recommended by the 
                President of the National Academy of Sciences.
            (2) Duties.--The Science Advisory Board shall--
                    (A) advise the Secretaries on the state-of-the-
                science regarding the impacts of climate change and 
                ocean acidification on natural resources and scientific 
                strategies and mechanisms for protecting, restoring, 
                and conserving natural resources to enable them to 
                become more resilient, adapt to, and withstand the 
                impacts of climate change and ocean acidification; and
                    (B) identify and recommend priorities for ongoing 
                research needs on such issues.
            (3) Collaboration.--The Science Advisory Board shall 
        collaborate with other climate change and ecosystem research 
        entities in other Federal agencies and departments.
            (4) Availability to the public.--The advice and 
        recommendations of the Science Advisory Board shall be made 
        available to the public.

SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTATION PLANS.

    (a) Development.--Not later than 1 year after the date of the 
development of a Natural Resources Climate Change Adaptation Strategy 
under section 476, each department or agency that has a representative 
on the Natural Resources Climate Change Adaptation Panel established 
under section 475 shall--
            (1) complete an adaptation plan for that department or 
        agency, respectively, implementing the Natural Resources 
        Climate Change Adaptation Strategy under section 476 and 
        consistent with the Natural Resources Climate Change Adaptation 
        Policy under section 472, detailing the department's or 
        agency's current and projected efforts to address the potential 
        impacts of climate change and ocean acidification on natural 
        resources within the department's or agency's jurisdiction and 
        necessary additional actions, including a timeline for 
        implementation of those actions;
            (2) provide opportunities for review and comment on that 
        adaptation plan by the public, including in the case of a plan 
        by the Bureau of Indian Affairs, review by Indian tribes; and
            (3) submit such plan to the President for approval.
    (b) Review by President and Submission to Congress.--
            (1) Review by president.--The President shall--
                    (A) approve an adaptation plan submitted under 
                subsection (a)(3) if the plan meets the requirements of 
                subsection (c) and is consistent with the strategy 
                developed under section 476;
                    (B) decide whether to approve the plan within 60 
                days after submission; and
                    (C) if the President disapproves a plan, direct the 
                department or agency to submit a revised plan to the 
                President under subsection (a)(3) within 60 days after 
                such disapproval.
            (2) Submission to congress.--Not later than 30 days after 
        the date of approval of such adaptation plan by the President, 
        the department or agency shall submit the approved plan to the 
        Committee on Natural Resources of the House of Representatives, 
        the Committee on Energy and Natural Resources of the Senate, 
        and the committees of the House of Representatives and the 
        Senate with principal jurisdiction over the department or 
        agency.
    (c) Requirements.--Each adaptation plan shall--
            (1) establish programs for assessing the current and future 
        impacts of climate change and ocean acidification on natural 
        resources within the department's or agency's, respectively, 
        jurisdiction, including cumulative and synergistic effects, and 
        for identifying and monitoring those natural resources that are 
        likely to be adversely affected and that have need for 
        conservation;
            (2) identify and prioritize the department's or agency's 
        strategies and specific conservation actions to address the 
        current and future impacts of climate change and ocean 
        acidification on natural resources within the scope of the 
        department's or agency's jurisdiction and to develop and 
        implement strategies to protect, restore, and conserve such 
        resources to become more resilient, adapt to, and better 
        withstand those impacts, including--
                    (A) the protection, restoration, and conservation 
                of terrestrial, marine, estuarine, and freshwater 
                habitats and ecosystems;
                    (B) the establishment of terrestrial, marine, 
                estuarine, and freshwater habitat linkages and 
                corridors;
                    (C) the restoration and conservation of ecological 
                processes;
                    (D) the protection of a broad diversity of native 
                species of fish, wildlife, and plant populations across 
                their range; and
                    (E) the protection of fish, wildlife, and plant 
                health, recognizing that climate can alter the 
                distribution and ecology of parasites, pathogens, and 
                vectors;
            (3) describe how the department or agency will integrate 
        such strategies and conservation activities into plans, 
        programs, activities, and actions of the department or agency, 
        related to the conservation and management of natural resources 
        and establish new plans, programs, activities, and actions as 
        necessary;
            (4) establish methods for assessing the effectiveness of 
        strategies and conservation actions taken to protect, restore, 
        and conserve natural resources to enable them to become more 
        resilient, adapt to, and withstand the impacts of climate 
        change and ocean acidification, and for updating those 
        strategies and actions to respond to new information and 
        changing conditions;
            (5) include a description of current and proposed 
        mechanisms to enhance cooperation and coordination of natural 
        resources adaptation efforts with other Federal agencies, State 
        and local governments, Indian tribes, and nongovernmental 
        stakeholders;
            (6) include specific written guidance to resource managers 
        to--
                    (A) explain how managers are expected to address 
                the effects of climate change and ocean acidification;
                    (B) identify how managers are to obtain any site-
                specific information that may be necessary; and
                    (C) reflect best practices shared among relevant 
                agencies, while also recognizing the unique missions, 
                objectives, and responsibilities of each agency; and
            (7) identify and assess data and information gaps necessary 
        to develop natural resources adaptation plans and strategies.
    (d) Implementation.--
            (1) In general.--Upon approval by the President, each 
        department or agency that serves on the Natural Resources 
        Climate Change Adaptation Panel shall implement its adaptation 
        plan through existing and new plans, policies, programs, 
        activities, and actions to the extent not inconsistent with 
        existing authority.
            (2) Consideration of impacts.--
                    (A) In general.--To the maximum extent practicable 
                and consistent with applicable law, every natural 
                resource management decision made by the department or 
                agency shall consider the impacts of climate change and 
                ocean acidification on those natural resources.
                    (B) Guidance.--The Council on Environmental Quality 
                shall issue guidance for Federal departments and 
                agencies for considering those impacts.
    (e) Revision and Review.--Not less than every 5 years, each 
adaptation plan under this section shall be reviewed and revised to 
incorporate the best available science and other information regarding 
the impacts of climate change and ocean acidification on natural 
resources.

SEC. 479. STATE NATURAL RESOURCES ADAPTATION PLANS.

    (a) Requirement.--In order to be eligible for funds under section 
480, not later than 1 year after the development of a Natural Resources 
Climate Change Adaptation Strategy required under section 476 each 
State shall prepare a State natural resources adaptation plan detailing 
the State's current and projected efforts to address the potential 
impacts of climate change and ocean acidification on natural resources 
and coastal areas within the State's jurisdiction.
    (b) Review or Approval.--
            (1) In general.--Each State adaptation plan shall be 
        reviewed and approved or disapproved by the Secretary of the 
        Interior and, as applicable, the Secretary of Commerce. Such 
        approval shall be granted if the plan meets the requirements of 
        subsection (c) and is consistent with the Natural Resources 
        Climate Change Adaptation Strategy required under section 476.
            (2) Approval or disapproval.--Within 180 days after 
        transmittal of such a plan, or a revision to such a plan, the 
        Secretary of the Interior and, as applicable, the Secretary of 
        Commerce shall approve or disapprove the plan by written 
        notice.
            (3) Resubmittal.--Within 90 days after transmittal of a 
        resubmitted adaptation plan as a result of disapproval under 
        paragraph (3), the Secretary of the Interior and, as 
        applicable, the Secretary of Commerce, shall approve or 
        disapprove the plan by written notice.
    (c) Contents.--A State natural resources adaptation plan shall--
            (1) include a strategy for addressing the impacts of 
        climate change and ocean acidification on terrestrial, marine, 
        estuarine, and freshwater fish, wildlife, plants, habitats, 
        ecosystems, wildlife health, and ecological processes, that--
                    (A) describes the impacts of climate change and 
                ocean acidification on the diversity and health of the 
                fish, wildlife and plant populations, habitats, 
                ecosystems, and associated ecological processes;
                    (B) establishes programs for monitoring the impacts 
                of climate change and ocean acidification on fish, 
                wildlife, and plant populations, habitats, ecosystems, 
                and associated ecological processes;
                    (C) describes and prioritizes proposed conservation 
                actions to assist fish, wildlife, plant populations, 
                habitats, ecosystems, and associated ecological 
                processes in becoming more resilient, adapting to, and 
                better withstanding those impacts;
                    (D) includes strategies, specific conservation 
                actions, and a time frame for implementing conservation 
                actions for fish, wildlife, and plant populations, 
                habitats, ecosystems, and associated ecological 
                processes;
                    (E) establishes methods for assessing the 
                effectiveness of strategies and conservation actions 
                taken to assist fish, wildlife, and plant populations, 
                habitats, ecosystems, and associated ecological 
                processes in becoming more resilient, adapt to, and 
                better withstand the impacts of climate changes and 
                ocean acidification and for updating those strategies 
                and actions to respond appropriately to new information 
                or changing conditions;
                    (F) is incorporated into a revision of the State 
                wildlife action plan (also known as the State 
                comprehensive wildlife strategy)--
                            (i) that has been submitted to the United 
                        States Fish and Wildlife Service; and
                            (ii) that has been approved by the Service 
                        or on which a decision on approval is pending; 
                        and
                    (G) is developed--
                            (i) with the participation of the State 
                        fish and wildlife agency, the State coastal 
                        agency, the State agency responsible for 
                        administration of Land and Water Conservation 
                        Fund grants, the State Forest Legacy program 
                        coordinator, and other State agencies 
                        considered appropriate by the Governor of such 
                        State; and
                            (ii) in coordination with the Secretary of 
                        the Interior, and where applicable, the 
                        Secretary of Commerce and other States that 
                        share jurisdiction over natural resources with 
                        the State; and
            (2) include, in the case of a coastal State, a strategy for 
        addressing the impacts of climate change and ocean 
        acidification on the coastal zone that--
                    (A) identifies natural resources that are likely to 
                be impacted by climate change and ocean acidification 
                and describes those impacts;
                    (B) identifies and prioritizes continuing research 
                and data collection needed to address those impacts 
                including--
                            (i) acquisition of high resolution coastal 
                        elevation and nearshore bathymetry data;
                            (ii) historic shoreline position maps, 
                        erosion rates, and inventories of shoreline 
                        features and structures;
                            (iii) measures and models of relative rates 
                        of sea level rise or lake level changes, 
                        including effects on flooding, storm surge, 
                        inundation, and coastal geological processes;
                            (iv) habitat loss, including projected 
                        losses of coastal wetlands and potentials for 
                        inland migration of natural shoreline habitats;
                            (v) ocean and coastal species and ecosystem 
                        migrations, and changes in species population 
                        dynamics;
                            (vi) changes in storm frequency, intensity, 
                        or rainfall patterns;
                            (vii) saltwater intrusion into coastal 
                        rivers and aquifers;
                            (viii) changes in chemical or physical 
                        characteristics of marine and estuarine 
                        systems;
                            (ix) increased harmful algal blooms; and
                            (x) spread of invasive species;
                    (C) identifies and prioritizes adaptation 
                strategies to protect, restore, and conserve natural 
                resources to enable them to become more resilient, 
                adapt to, and withstand the impacts of climate change 
                and ocean acidification, including--
                            (i) protection, maintenance, and 
                        restoration of ecologically important coastal 
                        lands, coastal and ocean ecosystems, and 
                        species biodiversity and the establishment of 
                        habitat buffer zones, migration corridors, and 
                        climate refugia; and
                            (ii) improved planning, siting policies, 
                        and hazard mitigation strategies;
                    (D) establishes programs for the long-term 
                monitoring of the impacts of climate change and ocean 
                acidification on the ocean and coastal zone and to 
                assess and adjust, when necessary, such adaptive 
                management strategies;
                    (E) establishes performance measures for assessing 
                the effectiveness of adaptation strategies intended to 
                improve resilience and the ability of natural resources 
                in the coastal zone to adapt to and withstand the 
                impacts of climate change and ocean acidification and 
                of adaptation strategies intended to minimize those 
                impacts on the coastal zone and to update those 
                strategies to respond to new information or changing 
                conditions; and
                    (F) is developed with the participation of the 
                State coastal agency and other appropriate State 
                agencies and in coordination with the Secretary of 
                Commerce and other appropriate Federal agencies.
    (d) Public Input.--States shall provide for solicitation and 
consideration of public and independent scientific input in the 
development of their plans.
    (e) Coordination With Other Plans.--The State plan shall take into 
consideration research and information contained in, and coordinate 
with and integrate the goals and measures identified in, as 
appropriate, other natural resources conservation strategies, 
including--
            (1) the national fish habitat action plan;
            (2) plans under the North American Wetlands Conservation 
        Act (16 U.S.C. 4401 et seq.);
            (3) the Federal, State, and local partnership known as 
        ``Partners in Flight'';
            (4) federally approved coastal zone management plans under 
        the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
        seq.);
            (5) federally approved regional fishery management plants 
        and habitat conservation activities under the Magnuson-Stevens 
        Fishery Conservation and Management Act (16 U.S.C. 1801 et 
        seq.);
            (6) the national coral reef action plan;
            (7) recovery plans for threatened species and endangered 
        species under section 4(f) of the Endangered Species Act of 
        1973 (16 U.S.C. 1533(f));
            (8) habitat conservation plans under section 10 of that Act 
        (16 U.S.C. 1539);
            (9) other Federal, State, and tribal plans for imperiled 
        species;
            (10) State or tribal hazard mitigation plans;
            (11) State or tribal water management plans; and
            (12) other State-based strategies that comprehensively 
        implement adaptation activities to remediate the effects of 
        climate change and ocean acidification on terrestrial, marine, 
        and freshwater fish, wildlife, plants, and other natural 
        resources.
    (f) Updating.--Each State plan shall be updated not less than every 
5 years.
    (g) Funding.--
            (1) In general.--Funds allocated to States under section 
        480 shall be used only for activities that are consistent with 
        a State natural resources adaptation plan that has been 
        approved by the Secretaries of Interior and Commerce.
            (2) Funding prior to the approval of a state plan.--Until 
        the earlier of the date that is 3 years after the date of the 
        enactment of this subpart or the date on which a State receives 
        approval for the State strategy, a State shall be eligible to 
        receive funding under section 480 for adaptation activities 
        that are--
                    (A) consistent with the comprehensive wildlife 
                strategy of the State and, where appropriate, other 
                natural resources conservation strategies; and
                    (B) in accordance with a workplan developed in 
                coordination with--
                            (i) the Secretary of the Interior; and
                            (ii) the Secretary of Commerce, for any 
                        coastal State subject to the condition that 
                        coordination with the Secretary of Commerce 
                        shall be required only for those portions of 
                        the strategy relating to activities affecting 
                        the coastal zone.
            (3) Pending approval.--During the period for which approval 
        by the applicable Secretary of a State plan is pending, the 
        State may continue receiving funds under section 480 pursuant 
        to the workplan described in paragraph (2)(B).

SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION FUND.

    (a) Allocations to States.--100 percent of the emission allowances 
made available for each year to carry out this subpart shall be 
provided to States to carry out natural resources adaptation activities 
in accordance with State natural resources adaptation plans approved 
under section 479. Specifically--
            (1) 84.4 percent shall be available to State wildlife 
        agencies in accordance with the apportionment formula 
        established under the second subsection (c) of section 4 of the 
        Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669c), as 
        added by section 902(e) of H.R. 5548 as introduced in the 106th 
        Congress and enacted into law by section 1(a)(2) of Public Law 
        106-553 (114 Stat. 2762A-119); and
            (2) 15.6 percent shall be available to State coastal 
        agencies pursuant to the formula established by the Secretary 
        of Commerce under section 306(c) of the Coastal Management Act 
        of 1972 (16 U.S.C. 1455(c)).
    (b) Establishment of Fund.--
            (1) Establishment.--There is hereby established in the 
        Treasury a separate account that shall be known as the Natural 
        Resources Climate Change Adaptation Fund.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated for subsection (c) such sums as are 
        deposited in the Natural Resources Climate Change Fund, and the 
        amounts appropriated for subsection (c) shall be no less than 
        the total estimated annual deposits in the Natural Resources 
        Climate Change Adaptation Fund. Such appropriations shall be 
        offset by the amounts deposited in such fund pursuant to 
        section 782(m) of the Clean Air Act.
    (c) Allocations to Federal Agencies.--
            (1) Department of the interior.--Of the amounts made 
        available for each fiscal year to carry out this subpart--
                    (A) 27.6 percent shall be allocated to the 
                Secretary of the Interior for use in funding--
                            (i) natural resources adaptation activities 
                        carried out--
                                    (I) under endangered species, 
                                migratory species, and other fish and 
                                wildlife programs administered by the 
                                National Park Service, the United 
                                States Fish and Wildlife Service, the 
                                Bureau of Indian Affairs, and the 
                                Bureau of Land Management;
                                    (II) on wildlife refuges, National 
                                Park Service land, and other public 
                                land under the jurisdiction of the 
                                United States Fish and Wildlife 
                                Service, the Bureau of Land Management, 
                                the Bureau of Indian Affairs, or the 
                                National Park Service; or
                                    (III) within Federal water managed 
                                by the Bureau of Reclamation and the 
                                National Park Service; and
                            (ii) for the implementation of the National 
                        Fish and Wildlife Habitat and Corridors 
                        Identification Program pursuant to section 481;
                    (B) 8.1 percent shall be allocated to the Secretary 
                of the Interior for natural resources adaptation 
                activities carried out under cooperative grant 
                programs, including--
                            (i) the cooperative endangered species 
                        conservation fund authorized under section 6 of 
                        the Endangered Species Act of 1973 (16 U.S.C. 
                        1535);
                            (ii) programs under the North American 
                        Wetlands Conservation Act (16 U.S.C. 4401 et 
                        seq.);
                            (iii) the Neotropical Migratory Bird 
                        Conservation Fund established by section 478(a) 
                        of the Neotropical Migratory Bird Conservation 
                        Act (16 U.S.C. 6108(a));
                            (iv) the Coastal Program of the United 
                        States Fish and Wildlife Service;
                            (v) the National Fish Habitat Action Plan;
                            (vi) the Partners for Fish and Wildlife 
                        Program;
                            (vii) the Landowner Incentive Program;
                            (viii) the Wildlife Without Borders Program 
                        of the United States Fish and Wildlife Service; 
                        and
                            (ix) the Migratory Species Program and Park 
                        Flight Migratory Bird Program of the National 
                        Park Service; and
                    (C) 4.9 percent shall be allocated to the Secretary 
                of the Interior to provide financial assistance to 
                Indian tribes to carry out natural resources adaptation 
                activities through the Tribal Wildlife Grants Program 
                of the United States Fish and Wildlife Service.
            (2) Land and water conservation fund.--
                    (A) Deposits.--
                            (i) In general.--Of the amounts made 
                        available for each fiscal year to carry out 
                        this subpart, 19.5 percent shall be deposited 
                        into the Land and Water Conservation Fund 
                        established under section 2 of the Land and 
                        Water Conservation Fund Act of 1965 (16 U.S.C. 
                        460l-5).
                            (ii) Use of deposits.-- (I) Deposits into 
                        the Land and Water Conservation Fund under this 
                        paragraph shall be supplemental to 
                        authorizations provided under section 3 of the 
                        Land and Water Conservation Fund Act of 1965 
                        (16 U.S.C. 460l-6), which shall remain 
                        available for nonadaptation needs.
                            (II) There are authorized to be 
                        appropriated for activities in this subpart 
                        such sums as are deposited in the Land and 
                        Water Conservation Fund pursuant to section 
                        480(c)(3)(A)(ii), and the amounts appropriated 
                        for this paragraph shall be no less than the 
                        total estimated annual deposits in the Land and 
                        Water Conservation Fund. Such appropriations 
                        shall be offset by the amounts deposited in 
                        such Fund pursuant to section 782(m).
                    (B) Allocations.--Of the amounts deposited under 
                this paragraph into the Land and Water Conservation 
                Fund--
                            (i) \1/6\ shall be allocated to the 
                        Secretary of the Interior and made available on 
                        a competitive basis to carry out natural 
                        resources adaptation activities through the 
                        acquisition of land and interests in land under 
                        section 6 of the Land and Water Conservation 
                        Fund Act of 1965 (16 U.S.C. 460l-8)--
                                    (I) to States in accordance with 
                                their natural resources adaptation 
                                plans, and to Indian tribes;
                                    (II) notwithstanding section 5 of 
                                that Act (16 U.S.C. 460l-7); and
                                    (III) in addition to any funds 
                                provided pursuant to annual 
                                appropriations Acts, the Energy Policy 
                                Act of 2005 (42 U.S.C. 15801 et seq.), 
                                or any other authorization for 
                                nonadaptation needs;
                            (ii) \1/3\ shall be allocated to the 
                        Secretary of the Interior to carry out natural 
                        resources adaptation activities through the 
                        acquisition of lands and interests in land 
                        under section 7 of the Land and Water 
                        Conservation Fund Act of 1965 (16 U.S.C. 460l-
                        9);
                            (iii) \1/6\ shall be allocated to the 
                        Secretary of Agriculture and made available to 
                        the States and Indian tribes to carry out 
                        natural resources adaptation activities through 
                        the acquisition of land and interests in land 
                        under section 7 of the Forest Legacy Program 
                        under the Cooperative Forestry Assistance Act 
                        of 1978 (16 U.S.C. 2103c); and
                            (iv) \1/3\ shall be allocated to the 
                        Secretary of Agriculture to carry out natural 
                        resources adaptation activities through the 
                        acquisition of land and interests in land under 
                        section 7 of the Land and Water Conservation 
                        Fund Act of 1965 (16 U.S.C. 460l-9).
                    (C) Expenditure of funds.--In allocating funds 
                under subparagraph (B), the Secretary of the Interior 
                and the Secretary of Agriculture shall take into 
                consideration factors including--
                            (i) the availability of non-Federal 
                        contributions from State, local, or private 
                        sources;
                            (ii) opportunities to protect fish and 
                        wildlife corridors or otherwise to link or 
                        consolidate fragmented habitats;
                            (iii) opportunities to reduce the risk of 
                        catastrophic wildfires, drought, extreme 
                        flooding, or other climate-related events that 
                        are harmful to fish and wildlife and people; 
                        and
                            (iv) the potential for conservation of 
                        species or habitat types at serious risk due to 
                        climate change, ocean acidification, and other 
                        stressors.
            (3) Forest service.--Of the amounts made available for each 
        fiscal year to carry out this subpart, 8.1 percent shall be 
        allocated to the Secretary of Agriculture for use in funding 
        natural resources adaptation activities carried out on national 
        forests and national grasslands under the jurisdiction of the 
        Forest Service.
            (4) Department of commerce.--Of the amounts made available 
        for each fiscal year to carry out this subpart, 11.5 percent 
        shall be allocated to the Secretary of Commerce for use in 
        funding natural resources adaptation activities to protect, 
        maintain, and restore coastal, estuarine, and marine resources, 
        habitats, and ecosystems, including such activities carried out 
        under--
                    (A) the coastal and estuarine land conservation 
                program;
                    (B) the community-based restoration program;
                    (C) the Coastal Zone Management Act of 1972 (16 
                U.S.C. 1451 et seq.), that are specifically designed to 
                strengthen the ability of coastal, estuarine, and 
                marine resources, habitats, and ecosystems to adapt to 
                and withstand the impacts of climate change and ocean 
                acidification;
                    (D) the Open Rivers Initiative;
                    (E) the Magnuson-Stevens Fishery Conservation and 
                Management Act (16 U.S.C. 1801 et seq.);
                    (F) the Marine Mammal Protection Act of 1972 (16 
                U.S.C. 1361 et seq.);
                    (G) the Endangered Species Act of 1973 (16 U.S.C. 
                1531 et seq.);
                    (H) the Marine Protection, Research, and 
                Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.);
                    (I) the Coral Reef Conservation Act of 2000 (16 
                U.S.C. 6401 et seq.); and
                    (J) the Estuary Restoration Act of 2000 (33 U.S.C. 
                2901 et seq.).
            (5) Environmental protection agency.--Of the amounts made 
        available each fiscal year to carry out this section, 12.2 
        percent shall be allocated to the Administrator for use in 
        natural resources adaptation activities restoring and 
        protecting--
                    (A) large-scale freshwater aquatic ecosystems, such 
                as the Everglades, the Great Lakes, Flathead Lake, the 
                Missouri River, the Mississippi River, the Colorado 
                River, the Sacramento-San Joaquin Rivers, the Ohio 
                River, the Columbia-Snake River System, the 
                Apalachicola, Chattahoochee, and Flint River System, 
                the Connecticut River, and the Yellowstone River;
                    (B) large-scale estuarine ecosystems, such as 
                Chesapeake Bay, Long Island Sound, Puget Sound, the 
                Mississippi River Delta, the San Francisco Bay Delta, 
                Narragansett Bay, and Albemarle-Pamlico Sound; and
                    (C) freshwater and estuarine ecosystems, 
                watersheds, and basins identified as priorities by the 
                Administrator, working in cooperation with other 
                Federal agencies, States, Indian tribes, local 
                governments, scientists, and other conservation 
                partners.
            (6) Corps of engineers.--Of the amounts made available each 
        fiscal year to carry out this section, 8.1 percent shall be 
        available to the Secretary of the Army for use by the Corps of 
        Engineers to carry out natural resources adaptation activities 
        restoring--
                    (A) large-scale freshwater aquatic ecosystems, such 
                as the ecosystems described in paragraph (5)(A);
                    (B) large-scale estuarine ecosystems, such as the 
                ecosystems described in paragraph (5)(B);
                    (C) freshwater and estuarine ecosystems, 
                watersheds, and basins identified as priorities by the 
                Corps of Engineers, working in cooperation with other 
                Federal agencies, States, Indian tribes, local 
                governments, scientists, and other conservation 
                partners; and
                    (D) habitats and ecosystems through the 
                implementation of estuary habitat restoration projects 
                authorized by the Estuary Restoration Act of 2000 (33 
                U.S.C. 2901 et seq.), project modifications for 
                improvement of the environment, aquatic restoration and 
                protection projects authorized by section 206 of the 
                Water Resources Development Act of 1996 (33 U.S.C. 
                2330), and other appropriate programs and activities.
    (d) Use of Funds by Federal Departments and Agencies.--Funds 
allocated to Federal departments and agencies under this section shall 
only be used for natural resources adaptation activities that are 
consistent with an adaptation plan developed and approved by the 
President under section 478.
    (e) State Cost Sharing.--Notwithstanding any other provision of 
law, a State that receives a grant with amounts allocated under this 
section shall use funds from non-Federal sources to pay at least 10 
percent of the costs of each activity carried out using amounts 
provided under the grant.

SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS INFORMATION PROGRAM.

     (a) Establishment.--Within 6 months of the date of enactment of 
this subpart, the Secretary of the Interior, in cooperation with the 
States and Indian tribes, shall establish a National Fish and Wildlife 
Habitat and Corridors Information Program in accordance with the 
requirements of this section.
    (b) Purpose.--The purpose of this program is to--
            (1) support States and Indian tribes in the development of 
        a geographic information system database of fish and wildlife 
        habitat and corridors that would inform planning and 
        development decisions within each State and Indian tribe, 
        enable each State and Indian tribe to model climate impacts and 
        adaptation, and provide geographically specific enhancements of 
        State and tribal wildlife action plans;
            (2) ensure the collaborative development, with the States 
        and Indian tribes, of a comprehensive, national geographic 
        information system database of maps, models, data, surveys, 
        informational products, and other geospatial information 
        regarding fish and wildlife habitat and corridors, that--
                    (A) is based on consistent protocols for sampling 
                and mapping across landscapes that take into account 
                regional differences; and
                    (B) that utilizes--
                            (i) existing and planned State- and tribal-
                        based geographic information system databases; 
                        and
                            (ii) existing databases, analytical tools, 
                        metadata activities, and other information 
                        products available through the National 
                        Biological Information Infrastructure 
                        maintained by the Secretary and nongovernmental 
                        organizations; and
            (3) facilitate the use of such databases by Federal, State, 
        local, and tribal decisionmakers to incorporate qualitative 
        information on fish and wildlife habitat and corridors at the 
        earliest possible stage to--
                    (A) prioritize and target natural resources 
                adaptation strategies and activities;
                    (B) avoid, minimize, and mitigate the impacts on 
                fish and wildlife habitat and corridors in siting 
                energy development, water, transmission, 
                transportation, and other land use projects;
                    (C) assess the impacts of existing development on 
                habitats and corridors; and
                    (D) develop management strategies to enhance the 
                ability of fish, wildlife, and plant species to migrate 
                or respond to shifting habitats within existing 
                habitats and corridors.
    (c) Habitat and Corridors Information System.--
            (1) In general.--The Secretary, in cooperation with the 
        States and Indian tribes, shall develop a Habitat and Corridors 
        Information System.
            (2) Contents.--The System shall--
                    (A) include maps, data, and descriptions of fish 
                and wildlife habitat and corridors, that--
                            (i) have been developed by Federal 
                        agencies, State wildlife agencies and natural 
                        heritage programs, Indian tribes, local 
                        governments, nongovernmental organizations, and 
                        industry;
                            (ii) meet accepted Geospatial 
                        Interoperability Framework data and metadata 
                        protocols and standards;
                    (B) include maps and descriptions of projected 
                shifts in habitats and corridors of fish and wildlife 
                species in response to climate change;
                    (C) assure data quality and make the data, models, 
                and analyses included in the System available at scales 
                useful to decisionmakers--
                            (i) to prioritize and target natural 
                        resources adaptation strategies and activities;
                            (ii) to assess the impacts of proposed 
                        energy development, water, transmission, 
                        transportation, and other land use projects and 
                        avoid, minimize, and mitigate those impacts on 
                        habitats and corridors;
                            (iii) to assess the impacts of existing 
                        development on habitats and corridors; and
                            (iv) to develop management strategies to 
                        enhance the ability of fish, wildlife, and 
                        plant species to migrate or respond to shifting 
                        habitats within existing habitats and 
                        corridors;
                    (D) establish a process for updating maps and other 
                information as landscapes, habitats, corridors, and 
                wildlife populations change or as other information 
                becomes available;
                    (E) encourage the development of collaborative 
                plans by Federal and State agencies and Indian tribes 
                to monitor and evaluate the efficacy of the System to 
                meet the needs of decisionmakers;
                    (F) identify gaps in habitat and corridor 
                information, mapping, and research that should be 
                addressed to fully understand and assess current data 
                and metadata, and to prioritize research and future 
                data collection activities for use in updating the 
                System and provide support for those activities;
                    (G) include mechanisms to support collaborative 
                research, mapping, and planning of habitats and 
                corridors by Federal and State agencies, Indian tribes, 
                and other interested stakeholders;
                    (H) incorporate biological and geospatial data on 
                species and corridors found in energy development and 
                transmission plans, including renewable energy 
                initiatives, transportation, and other land use plans;
                    (I) be based on the best scientific information 
                available; and
                    (J) identify, prioritize, and describe key parcels 
                of non-Federal land located within the boundaries of 
                units of the National Park System, National Wildlife 
                Refuge System, National Forest System, or National 
                Grassland System that are critical to maintenance of 
                wildlife habitat and migration corridors.
    (d) Financial and Other Support.--The Secretary may provide support 
to the States and Indian tribes, including financial and technical 
assistance, for activities that support the development and 
implementation of the System.
    (e) Coordination.--The Secretary, in cooperation with the States 
and Indian tribes, shall make recommendations on how the information 
developed in the System may be incorporated into existing relevant 
State and Federal plans affecting fish and wildlife, including land 
management plans, the State Comprehensive Wildlife Conservation 
Strategies, and appropriate tribal conservation plans, to ensure that 
they--
            (1) prevent unnecessary habitat fragmentation and 
        disruption of corridors;
            (2) promote the landscape connectivity necessary to allow 
        wildlife to move as necessary to meet biological needs, adjust 
        to shifts in habitat, and adapt to climate change; and
            (3) minimize the impacts of energy, development, water, 
        transportation, and transmission projects and other activities 
        expected to impact habitat and corridors.
    (f) Definitions.--In this section:
            (1) Geospatial interoperability framework.--The term 
        ``Geospatial Interoperability Framework'' means the strategy 
        utilized by the National Biological Information Infrastructure 
        that is based upon accepted standards, specifications, and 
        protocols adopted through the International Standards 
        Organization, the Open Geospatial Consortium, and the Federal 
        Geographic Data Committee, to manage, archive, integrate, 
        analyze, and make accessible geospatial and biological data and 
        metadata.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN TRIBES.

    (a) Federal Trust Responsibility.--Nothing in this subpart is 
intended to amend, alter, or give priority over the Federal trust 
responsibility to Indian tribes.
    (b) Exemption From FOIA.--Information received by a Federal agency 
pursuant to this Act relating to the location, character, or ownership 
of human remains of a person of Indian ancestry; or resources, cultural 
items, uses, or activities identified by an Indian tribe as traditional 
or cultural because of the long-established significance or ceremonial 
nature to the Indian tribe; shall not be subject to disclosure under 
section 552 of title 5, United States Code, if the head of the agency, 
in consultation with the Secretary of the Interior and an affected 
Indian tribe, determines that disclosure may--
            (1) cause a significant invasion of privacy;
            (2) risk harm to the human remains or resources, cultural 
        items, uses, or activities; or
            (3) impede the use of a traditional religious site by 
        practitioners.
    (c) Application of Other Law.--The Secretary of the Interior may 
apply the provisions of Public Law 93-638 where appropriate in the 
implementation of this subpart.

        PART 2--INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM

SEC. 491. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Global climate change is a potentially significant 
        national and global security threat multiplier and is likely to 
        exacerbate competition and conflict over agricultural, 
        vegetative, marine, and water resources and to result in 
        increased displacement of people, poverty, and hunger within 
        developing countries.
            (2) The strategic, social, political, economic, cultural, 
        and environmental consequences of global climate change are 
        likely to have disproportionate adverse impacts on developing 
        countries, which have less economic capacity to respond to such 
        impacts.
            (3) The countries most vulnerable to climate change, due 
        both to greater exposure to harmful impacts and to lower 
        capacity to adapt, are developing countries with very low 
        industrial greenhouse gas emissions that have contributed less 
        to climate change than more affluent countries.
            (4) To a much greater degree than developed countries, 
        developing countries rely on the natural and environmental 
        systems likely to be affected by climate change for sustenance, 
        livelihoods, and economic growth and stability.
            (5) Within developing countries there may be varying 
        climate change adaptation and resilience needs among different 
        communities and populations, including impoverished 
        communities, children, women, and indigenous peoples.
            (6) The consequences of global climate change, including 
        increases in poverty and destabilization of economies and 
        societies, are likely to pose long-term challenges to the 
        national security, foreign policy, and economic interests of 
        the United States.
            (7) It is in the national security, foreign policy, and 
        economic interests of the United States to recognize, plan for, 
        and mitigate the international strategic, social, political, 
        cultural, environmental, health, and economic effects of 
        climate change and to assist developing countries to increase 
        their resilience to those effects.
            (8) Under Article 4 of the United Nations Framework 
        Convention on Climate Change, developed country parties, 
        including the United States, committed to ``assist the 
        developing country parties that are particularly vulnerable to 
        the adverse effects of climate change in meeting costs of 
        adaptation to those adverse effects''.
            (9) Under the Bali Action Plan, developed country parties 
        to the United Nations Framework Convention on Climate Change, 
        including the United States, committed to ``enhanced action on 
        the provision of financial resources and investment to support 
        action on mitigation and adaptation and technology 
        cooperation,'' including, inter alia, consideration of 
        ``improved access to adequate, predictable, and sustainable 
        financial resources and financial and technical support, and 
        the provision of new and additional resources, including 
        official and concessional funding for developing country 
        parties''.
    (b) Purposes.--The purposes of this part are--
            (1) to provide new and additional assistance from the 
        United States to the most vulnerable developing countries, 
        including the most vulnerable communities and populations 
        therein, in order to support the development and implementation 
        of climate change adaptation programs and activities that 
        reduce the vulnerability and increase the resilience of 
        communities to climate change impacts, including impacts on 
        water availability, agricultural productivity, flood risk, 
        coastal resources, timing of seasons, biodiversity, economic 
        livelihoods, health and diseases, and human migration; and
            (2) to provide such assistance in a manner that protects 
        and promotes the national security, foreign policy, 
        environmental, and economic interests of the United States to 
        the extent such interests may be advanced by minimizing, 
        averting, or increasing resilience to climate change impacts.

SEC. 492. DEFINITIONS.

    In this part:
            (1) Allowance.--The term ``allowance'' means an emission 
        allowance established under section 721 of the Clean Air Act.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committees on Energy and Commerce, 
                Financial Services, and Foreign Affairs of the House of 
                Representatives; and
                    (B) the Committees on Environment and Public Works 
                and Foreign Relations of the Senate.
            (3) Developing country.--The term ``developing country'' 
        means a country eligible to receive official development 
        assistance according to the income guidelines of the 
        Development Assistance Committee of the Organization for 
        Economic Cooperation and Development.
            (4) Most vulnerable developing countries.--The term ``most 
        vulnerable developing countries'' means, as determined by the 
        Administrator of USAID, developing countries that are at risk 
        of substantial adverse impacts of climate change and have 
        limited capacity to respond to such impacts, considering the 
        approaches included in any international treaties and 
        agreements.
            (5) Most vulnerable communities and populations.--The term 
        ``most vulnerable communities and populations'' means 
        communities and populations that are at risk of substantial 
        adverse impacts of climate change and have limited capacity to 
        respond to such impacts, including impoverished communities, 
        children, women, and indigenous peoples.
            (6) Program.--The term ``Program'' means the International 
        Climate Change Adaptation Program established under section 
        493.
            (7) USAID.--The term ``USAID'' means the United States 
        Agency for International Development.
            (8) United nations framework convention on climate 
        change.--The term ``United Nations Framework Convention on 
        Climate Change'' or ``Convention'' means the United Nations 
        Framework Convention on Climate Change done at New York on May 
        9, 1992, and entered into force on March 21, 1994.

SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.

    (a) Establishment.--The Secretary of State, in consultation with 
the Administrator of USAID, the Secretary of the Treasury, and the 
Administrator of the Environmental Protection Agency, shall establish 
an International Climate Change Adaptation Program in accordance with 
the requirements of this part.
    (b) Allowance Account.--Allowances allocated pursuant to section 
782(n) of the Clean Air Act shall be available for distribution to 
carry out the Program established under subsection (a).
    (c) Supplement Not Supplant.--Assistance provided under this part 
shall be used to supplement, and not to supplant, any other Federal, 
State, or local resources available to carry out activities of the type 
carried out under the Program.

SEC. 494. DISTRIBUTION OF ALLOWANCES.

    (a) In General.--The Secretary of State, or such other Federal 
agency head as the President may designate, after consultation with the 
Secretary of the Treasury, the Administrator of USAID, and the 
Administrator of the Environmental Protection Agency, shall direct the 
distribution of allowances to carry out the Program--
            (1) in the form of bilateral assistance pursuant to the 
        requirements under section 495;
            (2) to multilateral funds or international institutions 
        pursuant to the Convention or an agreement negotiated under the 
        Convention; or
            (3) through a combination of the mechanisms identified 
        under paragraphs (1) and (2).
    (b) Limitation.--
            (1) Conditional distribution to multilateral funds or 
        international institutions.--In any fiscal year, the Secretary 
        of State, or such other Federal agency head as the President 
        may designate, in consultation with the Administrator of USAID, 
        the Secretary of the Treasury, and the Administrator of the 
        Environmental Protection Agency, shall distribute at least 40 
        percent and up to 60 percent of the allowances available to 
        carry out the Program to one or more multilateral funds or 
        international institutions that meet the requirements of 
        paragraph (2), if any such fund or institution exists, and 
        shall annually certify in a report to the appropriate 
        congressional committees that any multilateral fund or 
        international institution receiving allowances under this 
        section meets the requirements of paragraph (2) or that no 
        multilateral fund or international institution that meets the 
        requirements of paragraph (2) exists, as the case may be. The 
        Secretary of State shall notify the appropriate congressional 
        committees not less than 15 days prior to any transfer of 
        allowances to a multilateral fund or international institution 
        pursuant to this section.
            (2) Multilateral fund or international institution 
        eligibility.--A multilateral fund or international institution 
        is eligible to receive allowances available to carry out the 
        Program--
                    (A) if--
                            (i) such fund or institution is established 
                        pursuant to--
                                    (I) the Convention; or
                                    (II) an agreement negotiated under 
                                the Convention; or
                            (ii) the allowances are directed to one or 
                        more multilateral development banks or 
                        international development institutions, 
                        pursuant to an agreement negotiated under such 
                        Convention; and
                    (B) if such fund or institution--
                            (i) specifies the terms and conditions 
                        under which the United States is to provide 
                        allowances to the fund or institution, and 
                        under which the fund or institution is to 
                        provide assistance to recipient countries;
                            (ii) ensures that assistance from the 
                        United States to the fund or institution and 
                        the principal and income of the fund or 
                        institution are disbursed only for purposes 
                        that are consistent with those described in 
                        section 491(b)(1);
                            (iii) requires a regular meeting of a 
                        governing body of the fund or institution that 
                        includes representation from countries among 
                        the most vulnerable developing countries and 
                        provides public access;
                            (iv) requires that local communities and 
                        indigenous peoples in areas where any 
                        activities or programs are planned are engaged 
                        through adequate disclosure of information, 
                        public participation, and consultation; and
                            (v) prepares and makes public an annual 
                        report that--
                                    (I) describes the process and 
                                methodology for selecting the 
                                recipients of assistance from the fund 
                                or institution, including assessments 
                                of vulnerability;
                                    (II) describes specific programs 
                                and activities supported by the fund or 
                                institution and the extent to which the 
                                assistance is addressing the adaptation 
                                needs of the most vulnerable developing 
                                countries, and the most vulnerable 
                                communities and populations therein;
                                    (III) describes the performance 
                                goals for assistance authorized under 
                                the fund or institution and expresses 
                                such goals in an objective and 
                                quantifiable form, to the extent 
                                practicable;
                                    (IV) describes the performance 
                                indicators to be used in measuring or 
                                assessing the achievement of the 
                                performance goals described in 
                                subclause (III);
                                    (V) provides a basis for 
                                recommendations for adjustments to 
                                assistance authorized under this part 
                                to enhance the impact of such 
                                assistance; and
                                    (VI) describes the participation of 
                                other nations and international 
                                organizations in supporting and 
                                governing the fund or institution.
    (c) Oversight.--
            (1) Distribution to multilateral funds or international 
        institutions.--The Secretary of State, or such other Federal 
        agency head as the President may designate, in consultation 
        with the Administrator of USAID, shall oversee the distribution 
        of allowances available to carry out the Program to a 
        multilateral fund or international institution under subsection 
        (b).
            (2) Bilateral assistance.--The Administrator of USAID, in 
        consultation with the Secretary of State, shall oversee the 
        distribution of allowances available to carry out the Program 
        for bilateral assistance under section 495.

SEC. 495. BILATERAL ASSISTANCE.

    (a) Activities and Foreign Aid.--
            (1) In general.--In order to achieve the purposes of this 
        part, the Administrator of USAID may carry out programs and 
        activities and distribute allowances to any private or public 
        group (including international organizations and faith-based 
        organizations), association, or other entity engaged in 
        peaceful activities to--
                    (A) provide assistance to the most vulnerable 
                developing countries for--
                            (i) the development of national or regional 
                        climate change adaptation plans, including a 
                        systematic assessment of socioeconomic 
                        vulnerabilities in order to identify the most 
                        vulnerable communities and populations;
                            (ii) associated national policies; and
                            (iii) planning, financing, and execution of 
                        adaptation programs and activities;
                    (B) support investments, capacity-building 
                activities, and other assistance, to reduce 
                vulnerability and promote community-level resilience 
                related to climate change and its impacts in the most 
                vulnerable developing countries, including impacts on 
                water availability, agricultural productivity, flood 
                risk, coastal resources, timing of seasons, 
                biodiversity, economic livelihoods, health, human 
                migration, or other social, economic, political, 
                cultural, or environmental matters;
                    (C) support climate change adaptation research in 
                or for the most vulnerable developing countries;
                    (D) reduce vulnerability and provide increased 
                resilience to climate change for local communities and 
                livelihoods in the most vulnerable developing countries 
                by encouraging--
                            (i) the protection and rehabilitation of 
                        natural systems;
                            (ii) the enhancement and diversification of 
                        agricultural, fishery, and other livelihoods; 
                        and
                            (iii) the reduction of disaster risks;
                    (E) support the deployment of technologies to help 
                the most vulnerable developing countries respond to the 
                destabilizing impacts of climate change and encourage 
                the identification and adoption of appropriate 
                renewable and efficient energy technologies that are 
                beneficial in increasing community-level resilience to 
                the impacts of global climate change in those 
                countries; and
                    (F) encourage the engagement of local communities 
                through disclosure of information, consultation, and 
                the communities' informed participation relating to the 
                development of plans, programs, and activities to 
                increase community-level resilience to climate change 
                impacts.
            (2) Limitations.--Not more than 10 percent of the 
        allowances made available to carry out bilateral assistance 
        under this part in any year shall be distributed to support 
        activities in any single country.
            (3) Prioritizing assistance.--In providing assistance under 
        this section, the Administrator of USAID shall give priority to 
        countries, including the most vulnerable communities and 
        populations therein, that are most vulnerable to the adverse 
        impacts of climate change, determined by the likelihood and 
        severity of such impacts and the country's capacity to adapt to 
        such impacts.
    (b) Community Engagement.--
            (1) In general.--The Administrator of USAID shall ensure 
        that local communities, including the most vulnerable 
        communities and populations therein, in areas where any 
        programs or activities are carried out pursuant to this section 
        are engaged in, through disclosure of information, public 
        participation, and consultation, the design, implementation, 
        monitoring, and evaluation of such programs and activities.
            (2) Consultation and disclosure.--For each country 
        receiving assistance under this section, the Administrator of 
        USAID shall establish a process for consultation with, and 
        disclosure of information to, local, national, and 
        international stakeholders regarding any programs and 
        activities carried out pursuant to this section.
    (c) Coordination.--
            (1) Alignment of activities.--Subject to the direction of 
        the President and the Secretary of State, the Administrator of 
        USAID shall, to the extent practicable, seek to align 
        activities under this section with broader development, poverty 
        alleviation, or natural resource management objectives and 
        initiatives in the recipient country.
            (2) Coordination of activities.--The Administrator of USAID 
        shall ensure that there is coordination among the activities 
        under this section, subtitle D of this title, and part E of 
        title VII of the Clean Air Act, in order to maximize the 
        effectiveness of United States assistance to developing 
        countries.
    (d) Reporting.--
            (1) Initial report.--Not later than 180 days after the date 
        of enactment of this part, the Administrator of USAID, in 
        consultation with the Secretary of State, shall submit to the 
        President and the appropriate congressional committees an 
        initial report that--
                    (A) based on the most recent information available 
                from reliable public sources or knowledge obtained by 
                USAID on a reliable basis, as determined by the 
                Administrator of USAID, identifies the developing 
                countries, including the most vulnerable communities 
                and populations therein, that are most vulnerable to 
                climate change impacts and in which assistance may have 
                the greatest and most sustainable benefit in reducing 
                vulnerability to climate change; and
                    (B) describes the process and methodology for 
                selecting the recipients of assistance under subsection 
                (a)(1).
            (2) Annual reports.--Not later than 18 months after the 
        date on which the initial report is submitted pursuant to 
        paragraph (1), and annually thereafter, the Administrator of 
        USAID, in consultation with the Secretary of State, shall 
        submit to the President and the appropriate congressional 
        committees a report that--
                    (A) describes the extent to which global climate 
                change, through its potential negative impacts on 
                sensitive populations and natural resources in the most 
                vulnerable developing countries, may threaten, cause, 
                or exacerbate political, economic, environmental, 
                cultural, or social instability or international 
                conflict in those regions;
                    (B) describes the ramifications of any potentially 
                destabilizing impacts climate change may have on the 
                national security, foreign policy, and economic 
                interests of the United States, including--
                            (i) the creation of environmental migrants 
                        and internally displaced peoples;
                            (ii) international or internal armed 
                        conflicts over water, food, land, or other 
                        resources;
                            (iii) loss of agricultural and other 
                        livelihoods, cultural stability, and other 
                        causes of increased poverty and economic 
                        destabilization;
                            (iv) decline in availability of resources 
                        needed for survival, including water;
                            (v) increased impact of natural disasters 
                        (including droughts, flooding, and other severe 
                        weather events);
                            (vi) increased prevalence or virulence of 
                        climate-related diseases; and
                            (vii) intensified urban migration;
                    (C) describes how allowances available under this 
                section were distributed during the previous fiscal 
                year to enhance the national security, foreign policy, 
                and economic interests of the United States and assist 
                in avoiding the economically, politically, 
                environmentally, culturally, and socially destabilizing 
                impacts of climate change in most vulnerable developing 
                countries;
                    (D) identifies and recommends the developing 
                countries, including the most vulnerable communities 
                and populations therein, that are most vulnerable to 
                climate change impacts and in which assistance may have 
                the greatest and most sustainable benefit in reducing 
                vulnerability to climate change, including in the form 
                of deploying technologies, investments, capacity-
                building activities, and other types of assistance for 
                adaptation to climate change impacts and approaches to 
                reduce greenhouse gases in ways that may also provide 
                community-level resilience to climate change impacts; 
                and
                    (E) describes cooperation undertaken with other 
                nations and international organizations to carry out 
                this part.
    (e) Monitoring and Evaluation.--
            (1) In general.--The Administrator of USAID shall establish 
        and implement a system to monitor and evaluate the 
        effectiveness and efficiency of assistance provided under this 
        section in order to maximize the long-term sustainable 
        development impact of such assistance, including the extent to 
        which such assistance is meeting the purposes of this part and 
        addressing the adaptation needs of developing countries.
            (2) Requirements.--In carrying out paragraph (1), the 
        Administrator of USAID shall--
                    (A) in consultation with national governments in 
                recipient countries, establish performance goals for 
                assistance authorized under this section and express 
                such goals in an objective and quantifiable form, to 
                the extent practicable;
                    (B) establish performance indicators to be used in 
                measuring or assessing the achievement of the 
                performance goals described in subparagraph (A), 
                including an evaluation of--
                            (i) the extent to which assistance under 
                        this section provided for disclosure of 
                        information to, consultation with, and informed 
                        participation by local communities;
                            (ii) the extent to which local communities 
                        participated in the design, implementation, and 
                        evaluation of programs and activities 
                        implemented pursuant to this section; and
                            (iii) the impacts of such participation on 
                        the goals and objectives of the programs and 
                        activities implemented under this section;
                    (C) provide a basis for recommendations for 
                adjustments to assistance authorized under this section 
                to enhance the impact of such assistance; and
                    (D) include, in the annual report to the 
                appropriate congressional committees and other relevant 
                agencies required under subsection (d)(2), findings 
                resulting from the monitoring and evaluation of 
                programs and activities under this section.
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