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ment 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 diox-
ide equivalent value of each listed class II, group II sub-
stance, 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 car-
bon 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 sub-
stance; and 
‘‘(B) publish in the Federal Register the results 
of that review and any revisions. 
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‘‘(3) A revised determination published in the Federal 
Register under paragraph (2)(B) shall take effect for pro-
duction 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 Janu-
ary 1 of the first calendar year starting at least 9 months 
after the date on which the revised determination was pub-
lished. 
‘‘(4) The Administrator may decrease the frequency 
of review and revision under paragraph (2) if the Adminis-
trator 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 sub-
sections (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 deter-
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mined by the Administrator, each person who pro-
duced, 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 per-
manently ceases production, importation, and expor-
tation 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 multilat-
eral agreement, including any amendment to the 
Montreal Protocol on Substances That Deplete the 
Ozone Layer, that restricts the production and con-
sumption 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 
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products containing any class II, group II substance 
restricted by such agreement or amendment, after 
April 1 of the calendar year following the year dur-
ing which such agreement or amendment enters into 
force. 
‘‘(2) BASELINE REPORTS FOR CLASS II, GROUP 
II SUBSTANCES.— 
‘‘(A) IN GENERAL.—Unless such informa-
tion has been previously reported to the Admin-
istrator, on the date on which the first report 
under paragraph (1) of this subsection is re-
quired to be filed, each person who produced, 
imported, or exported a class II, group II sub-
stance, 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 re-
port with the Administrator setting forth the 
amount of such substance that such person pro-
duced, imported, exported, or that was con-
tained in products imported by that person, 
during each of calendar years 2004, 2005, and 
2006. 
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‘‘(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 pur-
chases 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 Ad-
ministrator; 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 nec-
essary 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 per-
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son who produced, imported, exported, or im-
ported 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 sub-
stance 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 PROTEC-
TION 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 de-
posit all proceeds from the auction and non-auction 
sale of allowances under this section into the Strato-
spheric Ozone and Climate Protection Fund. 
‘‘(3) USE.—Amounts deposited into the Strato-
spheric Ozone and Climate Protection Fund shall be 
available, subject to appropriations, exclusively for 
the following purposes: 
‘‘(A) RECOVERY, RECYCLING, AND
REC-
LAMATION.—The Administrator may utilize 
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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 ad-
heres to a multilateral agreement, including any 
amendment to the Montreal Protocol on Sub-
stances That Deplete the Ozone Layer, which 
restricts the production and consumption of 
class II, group II substances, the Administrator 
may utilize funds to meet any related contribu-
tion obligation of the United States to the Mul-
tilateral Fund for the Implementation of the 
Montreal Protocol or similar multilateral fund 
established under such multilateral agreement. 
‘‘(C) BEST-IN-CLASS APPLIANCES DEPLOY-
MENT PROGRAM.—The Secretary of Energy is 
authorized to utilize funds to carry out the pur-
poses of section 214 of the American Clean En-
ergy and Security Act of 2009. 
‘‘(D) LOW
GLOBAL
WARMING
PRODUCT 
TRANSITION ASSISTANCE PROGRAM.— 
‘‘(i) IN
GENERAL.—The Adminis-
trator, in consultation with the Secretary 
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of Energy, may utilize funds in fiscal years 
2012 through 2022 to establish a program 
to provide financial assistance to manufac-
turers of products containing class II, 
group II substances to facilitate the transi-
tion to products that contain or utilize al-
ternative substances with no or low carbon 
dioxide equivalent value and no ozone de-
pletion potential. 
‘‘(ii) DEFINITION.—In this subpara-
graph, the term ‘products’ means refrig-
erators, freezers, dehumidifiers, air condi-
tioners, foam insulation, technical aerosols, 
fire protection systems, and semiconduc-
tors. 
‘‘(iii) FINANCIAL
ASSISTANCE.—The 
Administrator may provide financial assist-
ance to manufacturers pursuant to clause 
(i) for— 
‘‘(I) the design and configuration 
of new consumer products that use al-
ternative substances with no or low 
carbon dioxide equivalent value and 
no ozone depletion potential; and 
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‘‘(II) the redesign and retooling 
of facilities for the manufacture of 
consumer products in the United 
States that use alternative substances 
with no or low carbon dioxide equiva-
lent value and no ozone depletion po-
tential. 
‘‘(iv) REPORTS.—For any fiscal year 
during which the Administrator provides 
financial assistance pursuant to this sub-
paragraph, 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 pro-
vided.’’ 
(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); 
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(2) by striking the period at the end of para-
graph (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 sup-
pression agent for nonresidential applications in ac-
cordance 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’’. 
(2) Section 609 of the Clean Air Act (42 U.S.C. 
7671h) is amended by adding the following new sub-
section after subsection (e): 
‘‘(f) CLASS II, GROUP II SUBSTANCES.— 
‘‘(1) REPAIR.—The Administrator may promul-
gate regulations establishing requirements for repair 
of motor vehicle air conditioners prior to adding a 
class II, group II substance. 
‘‘(2) SMALL CONTAINERS.—(A) The Adminis-
trator may promulgate regulations establishing serv-
icing practices and procedures for recovery of class 
II, group II substances from containers which con-
tain less than 20 pounds of such class II, group II 
substances. 
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‘‘(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 emis-
sions and leaks during the transfer of refrigerant 
from the container to the motor vehicle air condi-
tioner or issue a determination that such require-
ments are not necessary or appropriate. 
‘‘(C) Not later than 18 months after enactment 
of this subsection, the Administrator shall promul-
gate regulations establishing requirements for con-
sumer education materials on best practices associ-
ated 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 con-
sumer education materials consistent with such re-
quirements are displayed and available at point-of- 
sale locations, provided to the consumer, or included 
in or on the packaging of the container which con-
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tain less than 20 pounds of a class II, group II sub-
stance. 
‘‘(D) The Administrator may, through rule-
making, 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 Janu-
ary 1, 2014, no person may sell or distribute or offer 
to sell or distribute or otherwise introduce into inter-
state commerce any motor vehicle air conditioner re-
frigerant 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 the light absorbing component of 
carbonaceous aerosols. 
(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 
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appropriate Federal agencies, submit to Congress a report 
regarding black carbon emissions. The report shall include 
the following: 
(1) A summary of the current 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 cur-
rent and projected future emissions; and 
(ii) the net climate forcing of the 
emissions from such sources, including 
consideration of co-emissions of other pol-
lutants; 
(B) effective and cost-effective control 
technologies, operations, and strategies for ad-
ditional domestic and international black carbon 
emissions reductions, such as diesel retrofit 
technologies on existing on-road and off-road 
engines and programs to address residential 
cookstoves, forest burning, and other agri-
culture-based burning; 
(C) potential metrics quantifying the cli-
matic effects of black carbon emissions, includ-
ing its radiative forcing and warming effects, 
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that may be used to compare the climate bene-
fits of different mitigation strategies, including 
an assessment of the uncertainty in such 
metrics; 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, mod-
eling, 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 
(C) actions, in addition to those identified 
by the Administrator under section 851 of the 
Clean Air Act (as amended 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: 
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‘‘PART E—BLACK CARBON 
‘‘SEC. 851. BLACK CARBON. 
‘‘(a) DOMESTIC BLACK CARBON MITIGATION.—Not 
later than one year 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 warming, the 
Arctic, and other snow and ice-covered surfaces, shall pro-
pose 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. 
‘‘(b) INTERNATIONAL
BLACK
CARBON
MITIGA-
TION.— 
‘‘(1) REPORT.—Not later than one year after 
the date of enactment of this section, the Adminis-
trator, in coordination with the Secretary of State 
and other appropriate Federal agencies, shall trans-
mit a report to Congress on the amount, type, and 
direction of all present United States financial, tech-
nical, and related assistance to foreign countries to 
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reduce, mitigate, and otherwise abate black carbon 
emissions. 
‘‘(2) OTHER OPPORTUNITIES.—The report re-
quired under paragraph (1) shall also identify oppor-
tunities 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 resi-
dents 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, environ-
mental, and economic impacts of black carbon 
emissions from these sources by— 
‘‘(i) identifying key regions for large- 
scale demonstration efforts, and key part-
ners 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 
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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 Ad-
ministrator); and 
‘‘(III) reduce the incidence of se-
vere pneumonia in children under 5 
years old by over 30 percent (or such 
other goal as determined by the Ad-
ministrator); 
‘‘(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 alter-
natives exist; 
‘‘(D) reduce unnecessary fossil fuel burn-
ing that produces black carbon where feasible 
alternatives exist; 
‘‘(E) reduce other sources of black carbon 
emissions; and 
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‘‘(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 nec-
essary 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 pollu-
tion’ 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 of this Act) the following new part: 
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‘‘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 polit-
ical subdivision issues a limited number of tradable instru-
ments 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 tar-
get 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 num-
ber of tradable instruments in the nature of emission al-
lowances, nor does it include any other standard, limit, 
regulation, or program to reduce greenhouse gas emissions 
that is not implemented through the issuance and sur-
render 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 in-
clude, among other things, fleet-wide motor vehicle emis-
sion requirements that allow greater emissions with in-
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creased vehicle production, or requirements that fuels, or 
other products, meet an average pollution emission rate 
or lifecycle greenhouse gas standard.’’. 
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 paragraph at the end thereof: 
‘‘(3) If the court determines that any action of 
the Administrator is arbitrary, capricious, or other-
wise 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.’’. 
(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 Adminis-
trator shall take final action on such petition, in-
cluding promulgation of final action either revising 
or determining not to revise the action for which re-
consideration is sought, within 150 days after the 
petition is received by the Administrator or the peti-
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tion shall be deemed denied for the purpose of judi-
cial 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 Ad-
ministrator, in response to a petition for reconsider-
ation, 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), 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 strato-
spheric ozone control),’’ and inserting ‘‘title VI 
(relating to stratospheric ozone control), or title 
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VII or VIII (relating to reduction of greenhouse 
gas emissions),’’; and 
(B) in the first sentence of paragraph (3), 
by striking ‘‘or VI’’ and inserting ‘‘VI, VII, 
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 in-
serting ‘‘of moving sources), and 861 (preempting 
certain State greenhouse gas programs for a limited 
time)’’. 
(c) INSPECTIONS, MONITORING, AND ENTRY.—Sec-
tion 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)’’. 
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(d) ENFORCEMENT.—Subsection (f) of section 304 of 
the Clean Air Act (42 U.S.C. 7604(f)) is amended as fol-
lows: 
(1) By striking ‘‘; or’’ at the end of paragraph 
(3) thereof and inserting a comma. 
(2) By striking the period at the end of para-
graph (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 subpara-
graph (S) to read as follows: 
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‘‘(S) the promulgation or revision of any 
regulation under title VII or VIII,’’. 
Subtitle D—Carbon Market 
Assurance 
SEC. 341. CARBON MARKET ASSURANCE. 
The Federal Power Act (16 U.S.C. 791a and fol-
lowing) is amended by adding at the end the following: 
‘‘PART IV—CARBON MARKET ASSURANCE 
‘‘SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MAR-
KETS. 
‘‘(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 en-
tity’ shall have the meaning given in section 700 of 
the Clean Air Act. 
‘‘(3) FUTURE DELIVERY.—The term ‘future de-
livery’ does not include any sale of any cash com-
modity 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. 
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‘‘(5) REGULATED ALLOWANCE.—The term ‘reg-
ulated allowance’ means any emission allowance, 
compensatory allowance, offset credit, or renewable 
energy credit established or issued under the Amer-
ican 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 com-
monly known to the trade as, a ‘put op-
tion’, ‘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 con-
tract; and 
‘‘(B) the value of which, in whole or in 
part, is expressly linked to the price of a regu-
lated 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.— 
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‘‘(1) AUTHORITY.—The Commission shall pro-
mulgate regulations for the establishment, operation, 
and oversight of markets for regulated allowances 
not later than 18 months after the date of the enact-
ment of this section, and from time to time there-
after as may be appropriate. 
‘‘(2) REGULATIONS.—The regulations promul-
gated pursuant to paragraph (1) shall— 
‘‘(A) provide for effective and comprehen-
sive market oversight; 
‘‘(B) prohibit fraud, market manipulation 
(including an entity’s fraudulent or manipula-
tive conduct with respect to regulated allowance 
derivatives that benefits the entity in regulated 
allowance markets), and excess speculation, and 
provide measures to limit unreasonable fluctua-
tion 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 rec-
ordkeeping deemed necessary and appropriate 
by the Commission to provide for efficient price 
discovery; prevention of fraud, market manipu-
lation, and excess speculation; and compliance 
with title VII of the Clean Air Act and section 
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610 of the Public Utility Regulatory Policies 
Act; 
‘‘(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 re-
quirements are established for each class of reg-
ulated allowances; 
‘‘(G) provide for the formation and oper-
ation of a fair, orderly and liquid national mar-
ket 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; 
‘‘(I) establish standards for qualification 
as, and operation of, trading facilities for regu-
lated 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 fa-
cilitate compliance with title VII of the Clean 
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Air Act and section 610 of the Public Utility 
Regulatory Policies Act and the regulations pro-
mulgated under such title and such section. 
‘‘(3) ENFORCEMENT.— 
‘‘(A) IN GENERAL.—If the Commission de-
termines, after notice and an opportunity for a 
hearing on the record, that any entity has vio-
lated any rule or order issued by the Commis-
sion under this subsection, the Commission may 
issue an order— 
‘‘(i) prohibiting the entity from trad-
ing on a trading facility for regulated al-
lowances 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, sus-
pending for a period of not more than 6 
months, or revoking, the registration of the 
entity; 
‘‘(iii) assessing the entity a civil pen-
alty of not more than $1,000,000 per day 
per violation for as long as the violation 
continues (and in determining the amount 
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of a civil penalty, the Commission shall 
take into account the nature and serious-
ness 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 Com-
mission, or both. 
‘‘(B) AUTHORITY TO SUSPEND OR REVOKE 
REGISTRATION.—The Commission may suspend 
for a period of not more than 6 months, or re-
voke, the registration of a trading facility for 
regulated allowances or of a clearing organiza-
tion registered by the Commission if, after no-
tice 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.— 
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‘‘(i) IN GENERAL.—If the Commission 
determines that any entity may be vio-
lating, may have violated, or may be about 
to violate any provision of this part, or any 
regulation promulgated by, or any restric-
tion, condition, or order made or imposed 
by, the Commission under this part, and if 
the Commission finds that the alleged vio-
lation or threatened violation, or the con-
tinuation 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 enti-
ty— 
‘‘(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 Commis-
sion determines to be appropriate— 
‘‘(aa) significant harm to 
covered entities or market par-
ticipants; 
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‘‘(bb) significant harm to 
the public interest; and 
‘‘(cc) frustration of the abil-
ity 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 
tem-
porary order issued under clause (i) 
shall— 
‘‘(I) become effective upon serv-
ice upon the entity; and 
‘‘(II) unless set aside, limited, or 
suspended by the Commission or a 
court of competent jurisdiction, re-
main effective and enforceable pend-
ing the completion of the proceedings. 
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‘‘(D) PROCEEDINGS REGARDING DISSIPA-
TION OR CONVERSION OF ASSETS.— 
‘‘(i) IN
GENERAL.—In a proceeding 
involving an alleged violation of a regula-
tion or order promulgated or issued by the 
Commission, if the Commission determines 
that the alleged violation or related cir-
cumstances are likely to result in signifi-
cant 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 
tem-
porary order issued under clause (i) 
shall— 
‘‘(I) become effective upon serv-
ice upon the respondent; and 
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‘‘(II) unless set aside, limited, or 
suspended by the Commission or a 
court of competent jurisdiction, re-
main effective and enforceable pend-
ing 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 conver-
sion of assets pursuant to subparagraph 
(D), the respondent may apply to the Com-
mission to have the order set aside, lim-
ited, or suspended. 
‘‘(ii) NO
PRIOR
HEARING.—If a re-
spondent 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 
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application at the earliest practicable 
time. 
‘‘(iii) JUDICIAL REVIEW.— 
‘‘(I) IN
GENERAL.—An entity 
shall not be required to submit a re-
quest 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 en-
tered with a prior hearing of the Com-
mission, or 10 days after the date on 
which the Commission renders a deci-
sion 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 hav-
ing jurisdiction over the circuit in 
which the respondent resides or 
has a principal place of business, 
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or in the United States Court of 
Appeals for the District of Co-
lumbia Circuit, for an order set-
ting aside, limiting, or sus-
pending the effectiveness or en-
forcement 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 sub-
clause (II) except after a hearing and 
decision by the Commission on the ap-
plication 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). 
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‘‘(v) NO AUTOMATIC STAY OF TEM-
PORARY
ORDER.—The commencement of 
proceedings under clause (iii) shall not, un-
less specifically ordered by the court, oper-
ate as a stay of the order of the Commis-
sion. 
‘‘(F) ACTIONS
TO
COLLECT
CIVIL
PEN-
ALTIES.—If any person fails to pay a civil pen-
alty 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. 
In any such action, the validity or appropriate-
ness of the final assessment order or judgment 
shall not be subject to review. 
‘‘(4) TRANSACTION FEES.— 
‘‘(A) 
IN
GENERAL.—The 
Commission 
shall, in accordance with this paragraph, estab-
lish and collect transaction fees designed to re-
cover the costs to the Federal Government of 
the supervision and regulation of regulated al-
lowance markets and market participants, in-
cluding related costs for enforcement activities, 
policy and rulemaking activities, administration, 
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legal services, and international regulatory ac-
tivities. 
‘‘(B) INITIAL
FEE
RATE.—Each trading 
facility on or through which regulated allow-
ances are transacted shall pay to the Commis-
sion 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 Rep-
resentatives and the Committee on Energy and 
Natural Resources of the Senate on the ade-
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quacy of the transaction fees in providing fund-
ing for the Commission to regulate the regu-
lated allowance markets. 
‘‘(5) JUDICIAL REVIEW.—Judicial review of ac-
tions taken by the Commission under this subsection 
shall be pursuant to part III. 
‘‘(6) 
INFORMATION-SHARING.—Within 
months after a Federal agency with jurisdiction over 
regulated allowance derivatives is delegated author-
ity 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 re-
quests 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 propri-
etary information. 
‘‘(7) ADDITIONAL EMPLOYEES REPORT AND AP-
POINTMENT.—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 
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the Senate, a report that contains recommendations 
as to how many additional employees would be nec-
essary to provide robust oversight and enforcement 
of the regulations promulgated under this sub-
section. As soon as practicable after the completion 
of the report, subject to appropriations, the Commis-
sion shall appoint the recommended number of addi-
tional employees for such purposes. 
‘‘(c) DELEGATION OF AUTHORITY BY THE PRESI-
DENT.— 
‘‘(1) DELEGATION.—The President, taking into 
consideration the recommendations of the inter-
agency 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 estab-
lishment, operation, and oversight of all markets for 
regulated allowance derivatives. 
‘‘(2) REGULATIONS.—The regulations promul-
gated pursuant to paragraph (1) shall— 
‘‘(A) provide for effective and comprehen-
sive market oversight; 
‘‘(B) prohibit fraud, market manipulation, 
and excess speculation, and provide measures to 
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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 rec-
ordkeeping necessary to provide for efficient 
price discovery; prevention of fraud, market ma-
nipulation, and excess speculation; and compli-
ance with title VII of the Clean Air Act and 
section 610 of the Public Utility Regulatory 
Policies Act; 
‘‘(E) ensure that position limitations for 
individual market participants are established 
with respect to each regulated allowance deriva-
tive and aggregate position limitations for indi-
vidual market participants are established with 
respect to all regulated allowance derivative 
markets; 
‘‘(F) ensure that margin requirements are 
established for each regulated allowance deriva-
tive; 
‘‘(G) provide for the formation and oper-
ation of a market system that allows for best 
execution in the trading of regulated allowance 
derivatives; 
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‘‘(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 asso-
ciated with over-the-counter trading, and pro-
mulgate reporting and market transparency 
rules for large traders; 
‘‘(I) ensure that market participants do 
not evade position limits or otherwise under-
mine the integrity and effectiveness of the regu-
lations 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 facili-
ties for regulated allowance derivatives; 
‘‘(K) establish standards, as necessary, for 
qualification as, and operation of, clearing orga-
nizations for trading facilities for regulated al-
lowance derivatives; 
‘‘(L) provide boards of trade designated as 
contract markets under the Commodity Ex-
change Act, and market participants, with an 
adequate transition period for compliance with 
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any new regulatory requirements established 
under this paragraph; 
‘‘(M) determine whether and to what ex-
tent offset creation contracts, to the extent in-
corporating regulated allowance derivatives, 
should be governed by the same regulations 
that apply to other regulated allowance deriva-
tives; and 
‘‘(N) include such other requirements as 
necessary to preserve market integrity and fa-
cilitate compliance with title VII of the Clean 
Air Act and section 610 of the Public Utility 
Regulatory Policies Act and the regulations pro-
mulgated under such title and such section. 
‘‘(3) DEADLINE.—The agencies authorized to 
promulgate regulations for the establishment, oper-
ation, and oversight of markets for regulated allow-
ance derivatives pursuant to paragraph (1) shall 
promulgate such regulations not later than 18 
months after the date of enactment of this section, 
and from time to time thereafter as may be appro-
priate. 
‘‘(4) DEFAULT RULES.— 
‘‘(A) An individual market participant, di-
rectly or in concert with another participant, 
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shall not control more than 10 percent of the 
open interest in any regulated allowance deriva-
tive. 
‘‘(B) All contracts for the purchase or sale 
of any regulated allowance derivative shall be 
executed on or through a board of trade des-
ignated as a contract market under the Com-
modity Exchange Act. 
‘‘(C) To the extent that regulations pro-
mulgated under this subsection provide dif-
ferent rules with respect to the matters de-
scribed in subparagraph (A) or (B), the regula-
tions 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 in-
clude the Administrator of the Environmental Pro-
tection Agency and representatives of other relevant 
agencies, to make recommendations to the President 
regarding proposed regulations for the establish-
ment, operation, and oversight of markets for regu-
lated allowance derivatives. 
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‘‘(2) REPORT.—Not later than 180 days after 
the date of the enactment of this section, and bienni-
ally thereafter, the interagency working group shall 
submit a written report to the President and Con-
gress that includes its recommendations to the 
President regarding proposed regulations for the es-
tablishment, operation, and oversight of markets for 
regulated 
allowance 
derivatives 
and 
any 
rec-
ommendations 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 Fed-
eral agency that promulgates under subsection (c) a regu-
lation of conduct with respect to a regulated allowance de-
rivative shall have the same authority to enforce compli-
ance with the regulation as the Commodity Futures Trad-
ing Commission has to enforce compliance with any regu-
lation of similar conduct with respect to a contract, agree-
ment, or transaction over which the Commodity Futures 
Trading Commission has jurisdiction, except that any en-
forcement by the Federal Energy Regulatory Commission 
shall be pursuant to section 222 and Part III. 
‘‘(f) PROHIBITION ON PRICE OR MARKET MANIPULA-
TION, FRAUD, AND FALSE OR MISLEADING STATEMENTS 
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OR REPORTS.—(1) It shall be a felony punishable by a 
fine of not more than $25,000,000 (or $5,000,000 in the 
case of a person who is an individual) or imprisonment 
for not more than 20 years, or both, together with the 
costs of prosecution for any person, directly or indirectly— 
‘‘(A) in connection with a transaction involving 
a regulated instrument, to knowingly— 
‘‘(i) use any manipulative or deceptive de-
vice or contrivance in violation of regulations 
promulgated pursuant to this section; 
‘‘(ii) corner or attempt to corner the regu-
lated instrument; or 
‘‘(iii) cheat or defraud, or attempt to cheat 
or defraud, any other person; 
‘‘(B) to knowingly deliver or cause to be deliv-
ered a false, misleading, or inaccurate report con-
cerning information or conditions that affect or tend 
to affect the price of a regulated instrument; 
‘‘(C) to knowingly make, or cause to be made, 
in an application, report, or document required to be 
filed under any regulation promulgated pursuant to 
this section, a statement which is false or misleading 
with respect to a material fact, or to omit any mate-
rial fact required to be stated therein or necessary 
to make the statements therein not misleading; or 
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‘‘(D) to knowingly falsify, conceal, or cover up 
by any trick, scheme, or artifice a material fact, 
make any false, fictitious, or fraudulent statements 
or representations, or make or use any false writing 
or document that contains a false, fictitious, or 
fraudulent statement or entry, to an entity on or 
through which transactions in regulated instruments 
occur, or are settled or cleared, acting in furtherance 
of its official duties under this section or regulations 
promulgated under this section. 
‘‘(2) If a person is found guilty of a felony established 
in paragraph (1), the person may be prohibited from hold-
ing or trading regulated instruments for a period of not 
more than 5 years pursuant to the regulations promul-
gated under this section, except that, if the person is a 
covered entity, the person shall be allowed to hold suffi-
cient regulated allowances to meet its compliance obliga-
tions. 
‘‘(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 en-
force any unfair competition, antitrust, consumer protec-
tion, securities, commodities or any other law or regula-
tion, except that no such State law or regulation may re-
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lieve any person of any requirement otherwise applicable 
under this section. 
‘‘(h) MARKET REPORTS.— 
‘‘(1) COLLECTION AND ANALYSIS OF INFORMA-
TION.—The Commission, in conjunction with the 
Federal agency with jurisdiction over regulated al-
lowance derivatives pursuant to subsection (c)(1), 
shall, on a continuous basis, collect and analyze the 
following information on the functioning of the mar-
kets 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 deriva-
tives, and the spot and futures markets for en-
ergy commodities, including electricity. 
‘‘(D) Evidence of fraud or manipulation in 
any such market, the effects on any such mar-
ket of any such fraud or manipulation (or 
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threat of fraud or manipulation) that the Com-
mission, in conjunction with the Federal agen-
cy, has identified, and the effectiveness of cor-
rective measures undertaken by the Commis-
sion, 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 de-
creases 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 invest-
ment responses to the markets. 
‘‘(H) Any other issue related to the mar-
kets 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 cal-
endar 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 
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available to the public, a report on the matters de-
scribed in paragraph (1) with respect to the year, in-
cluding recommendations for any administrative or 
statutory measures the Commission, in conjunction 
with the Federal agency, considers necessary to ad-
dress any threats to the transparency, fairness, or 
integrity of the markets in regulated instruments.’’. 
Subtitle E—Additional Market 
Assurance 
SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DE-
RIVATIVES INVOLVING ENERGY COMMOD-
ITIES. 
(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 para-
graphs (14) through (22) and paragraphs (24) 
through (36), respectively; 
(3) by inserting after paragraph (12) the fol-
lowing: 
‘‘(13) ENERGY COMMODITY.—The term ‘energy 
commodity’ means— 
‘‘(A) coal; 
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‘‘(B) crude oil, gasoline, diesel fuel, jet 
fuel, heating oil, and propane; 
‘‘(C) electricity (excluding financial trans-
mission rights which are subject to regulation 
and oversight by the Federal Energy Regu-
latory 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 ap-
propriate.’’; and 
(4) by inserting after paragraph (22) (as so re-
designated 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 
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2(g) of such Act (7 U.S.C. 2(g)) is amended by inserting 
‘‘or an energy commodity’’ after ‘‘agricultural com-
modity’’. 
(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 IN-
CLUDED ENERGY TRANSACTIONS ON FOREIGN BOARDS 
OF TRADE.—Section 4 of such Act (7 U.S.C. 6) is amend-
ed— 
(1) in subsection (a), by inserting ‘‘, and which 
is not an included energy transaction’’ after ‘‘terri-
tories 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 AUTHOR-
ITY OF THE CFTC WITH RESPECT TO INCLUDED EN-
ERGY 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: 
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‘‘(6) The Commission may not exempt any in-
cluded energy transaction from the requirements of 
subsection (a), unless the Commission provides 60 
days advance notice to the Congress and the Posi-
tion Limit Energy Advisory Group and solicits pub-
lic comment about the exemption request and any 
proposed Commission action.’’. 
(2) NULLIFICATION OF NO-ACTION LETTER EX-
EMPTIONS 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 en-
ergy transactions (as defined in section 1a(13) of 
the Commodity Exchange Act) to be conducted with-
out regard to the requirements of section 4(a) of 
such Act shall be null and void. 
(f) REQUIREMENT TO ESTABLISH UNIFORM SPECU-
LATIVE 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 aggre-
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gate 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 ‘‘, con-
sistent with the 3rd sentence,’’ after ‘‘Commis-
sion’’; 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 con-
vene 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 de-
rivatives 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 en-
ergy commodity. 
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‘‘(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 CON-
TRACTS.—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 para-
graph and section 4a(a)’’ after ‘‘(B) 
through (D)’’; and 
(II) by inserting ‘‘of this para-
graph’’ before the period; and 
(ii) in subparagraph (C)(ii)(IV)— 
(I) in the heading, by striking 
‘‘LIMITATIONS OR’’; and 
(II) by striking ‘‘position limita-
tions or’’. 
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(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 ‘‘LIMI-
TATIONS OR’’; and 
(ii) by striking ‘‘position limitations 
or’’. 
(C) CONTRACTS TRADED ON OR THROUGH 
DERIVATIVES TRANSACTION EXECUTION FACILI-
TIES.—Section 5a(d)(4) of such Act (7 U.S.C. 
7a(d)(4)) is amended— 
(i) in the heading by striking ‘‘LIMI-
TATIONS OR’’; and 
(ii) by striking ‘‘position limits or’’. 
(g) ELIMINATION OF THE SWAPS LOOPHOLE.—Sec-
tion 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 fol-
lowing: 
‘‘(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 posi-
tion that— 
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‘‘(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 chan-
nel; 
‘‘(ii) is economically appropriate to the reduc-
tion 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 an-
ticipates incurring; or 
‘‘(III) services that a person provides, pur-
chases, or anticipates providing or purchasing; 
or 
‘‘(B) reduces risks attendant to a position re-
sulting from a transaction that— 
‘‘(i) was executed pursuant to subsection 
(d), (g), (h)(1), or (h)(2) of section 2, or an ex-
emption issued by the Commission by rule, reg-
ulation or order; and 
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‘‘(ii) was executed opposite a counterparty 
for which the transaction would qualify as a 
bona fide hedging transaction pursuant to para-
graph (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 RE-
PORTING.—The Commission shall issue a proposed 
rule defining and classifying index traders and swap 
dealers (as those terms are defined by the Commis-
sion) 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 signifi-
cant price discovery contracts not later than 120 
days after the date of the enactment of this sub-
section, and issue a final rule within 180 days after 
such date of enactment. 
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‘‘(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 Commis-
sion shall disaggregate and make public weekly— 
‘‘(A) the number of positions and total no-
tional 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 EXCES-
SIVE SPECULATION IN INDEXES.— 
(1) IN GENERAL.—Section 4a of such Act (7 
U.S.C. 6a) is amended by adding at the end the fol-
lowing: 
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‘‘(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 fa-
cility with respect to a significant price discovery contract, 
in the same manner in which this section applies to con-
tracts 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 EN-
ERGY REGULATORY COMMISSION. 
Section 2 of the Commodity Exchange Act (7 U.S.C. 
2) is amended by adding at the end the following:. 
‘‘(j) NO EFFECT ON FERC AUTHORITY.—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 Commis-
sion 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 ac-
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tions, or otherwise carry out the responsibilities of the 
Federal Energy Regulatory Commission.’’. 
SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FU-
TURES TRADING COMMISSION. 
(a) ELEVATION OF OFFICE.— 
(1) INCLUSION OF CFTC IN DEFINITION OF ES-
TABLISHMENT.— 
(A) Section 11(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 Commis-
sions established under section 15301 of title 
40, United States Code; or the Chairman of the 
Commodity Futures Trading Commission;’’. 
(B) Section 11(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 Com-
mission,’’. 
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(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 Fu-
tures Trading Commission,’’. 
(b) 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 sec-
tion 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 amend-
ments made by this section; and 
(B) shall, while serving under subpara-
graph (A), remain subject to the provisions of 
section 8G of such Act which apply with respect 
to the Commodity Futures Trading Commis-
sion. 
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SEC. 354. SETTLEMENT AND CLEARING THROUGH REG-
ISTERED DERIVATIVES CLEARING ORGANIZA-
TIONS. 
(a) IN GENERAL.— 
(1) APPLICATION
TO
EXCLUDED
DERIVATIVE 
TRANSACTIONS.— 
(A) Section 2(d)(1) of the Commodity Ex-
change 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 fol-
lowing: 
‘‘(C) except as provided in section 4(f), the 
agreement, contract, or transaction is settled 
and cleared through a derivatives clearing orga-
nization 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 
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(iii) by adding at the end the fol-
lowing: 
‘‘(D) except as provided in section 4(f), the 
agreement, contract, or transaction is settled 
and cleared through a derivatives clearing orga-
nization registered with the Commission.’’. 
(2) APPLICATION
TO
CERTAIN
SWAP
TRANS-
ACTIONS.—Section 2(g) of such Act (7 U.S.C. 2(g)) 
is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (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 organiza-
tion 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); 
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(ii) by striking the period at the end 
of subparagraph (B) and inserting ‘‘; 
and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(C) except as provided in section 4(f), is 
settled and cleared through a derivatives clear-
ing organization registered with the Commis-
sion.’’. 
(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 fol-
lowing: 
‘‘(C) except as provided in section 4(f), set-
tled and cleared through a derivatives clearing 
organization registered with the Commission.’’. 
(4) GENERAL
EXEMPTIVE
AUTHORITY.—Sec-
tion 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 
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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.—Sec-
tion 2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is 
amended by striking the heading for the subpara-
graph and all that follows through ‘‘As part of’’ and 
inserting the following: 
‘‘(D) REVIEW OF IMPLEMENTATION.—As 
part of’’. 
(b) ALTERNATIVES TO CLEARING THROUGH DES-
IGNATED 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 DES-
IGNATED CLEARING ORGANIZATIONS.— 
‘‘(1) SETTLEMENT
AND
CLEARING
THROUGH 
CERTAIN OTHER REGULATED ENTITIES.—An agree-
ment, contract, or transaction, or class thereof, re-
lating to an excluded commodity, that would other-
wise 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 
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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 trans-
action, 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 orga-
nization 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 Re-
serve 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 Sys-
tem serve as the primary regulator. 
‘‘(C) Before granting an exemption pursu-
ant to subparagraph (A), the Commission shall 
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find that the agreement, contract, or trans-
action, or class thereof— 
‘‘(i) is highly customized as to its ma-
terial terms and conditions; 
‘‘(ii) is transacted infrequently; 
‘‘(iii) does not serve a significant 
price-discovery function in the market-
place; and 
‘‘(iv) is being entered into by parties 
who can demonstrate the financial integ-
rity of the agreement, contract, or trans-
action and their own financial integrity, as 
such terms and standards are determined 
by the Commission. The standards may in-
clude, with respect to any federally regu-
lated financial entity for which net capital 
requirements are imposed, a net capital re-
quirement associated with any agreement, 
contract, or transaction subject to an ex-
emption from the clearing requirement 
that is higher than the net capital require-
ment that would be associated with such a 
transaction were it cleared 
‘‘(D) Any agreement, contract, or trans-
action, or class thereof, which is exempted pur-
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suant to subparagraph (A) shall be reported to 
the Commission in a manner designated by the 
Commission, or to such other entity the Com-
mission deems appropriate. 
‘‘(E) The Commission, the Securities and 
Exchange Commission and the Board of Gov-
ernors of the Federal Reserve System shall 
enter into a memorandum of understanding by 
which the information reported to the Commis-
sion 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 Sys-
tem serve as the primary regulator may be pro-
vided to the other agencies. 
‘‘(g) SPOT AND FORWARD EXCLUSION.—The settle-
ment 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 ship-
ment 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 
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(7 U.S.C. 7a-1(c)(2)) is amended by adding at the end 
the following: 
‘‘(O) DISCLOSURE OF GENERAL INFORMA-
TION.—The applicant shall disclose publicly and 
to the Commission information concerning— 
‘‘(i) the terms and conditions of con-
tracts, 
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 finan-
cial 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 IN-
FORMATION.—The applicant shall make public 
daily information on settlement prices, volume, 
and open interest for contracts settled or 
cleared pursuant to the requirements of 
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 appli-
cant if the Commission determines that the 
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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 dis-
ciplinary committee, and members of the appli-
cant, 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 subpara-
graph.’’. 
(d) AMENDMENTS.— 
(1) Section 409 of the Federal Deposit Insur-
ance 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 or 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 clear-
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ing 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 agree-
ments’’. 
(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 enact-
ment, 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 Com-
mission, or to such other entity as the Commission deems 
appropriate. 
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SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A 
CREDIT DEFAULT SWAP. 
(a) IN GENERAL.—Section 4c of the Commodity Ex-
change 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 per-
son— 
‘‘(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 es-
tablished 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 
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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.—Sec-
tion 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 ‘cred-
it 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 trad-
ed on or cleared by a registered entity shall be ex-
cluded 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 Ex-
change Act of 1934, except it shall be deemed a se-
curity 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) 
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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 Ex-
change 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 fol-
lowing: 
‘‘(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 di-
rectly 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 
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which the fee rate is to be applied on the trans-
actions subject to the fee, or delegate the au-
thority to make the determination to any appro-
priate derivatives clearing organization. 
‘‘(3) EXEMPTIONS.—The Commision 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 in-
terest 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 Secu-
rities Act of 1933 or the Securities Ex-
change Act of 1934. 
‘‘(4) DATES FOR PAYMENT OF FEES.—The fees 
imposed under paragraph (1) shall be paid on or be-
fore— 
‘‘(A) March 15 of each year, with respect 
to transactions occurring on or after the pre-
ceding September 1 and on or before the pre-
ceding December 31; and 
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‘‘(B) September 15 of each year, with re-
spect to transactions occurring on or after the 
preceding January 1 and on or before the pre-
ceding 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 esti-
mated 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 clear-
ing organizations during the fiscal year, as 
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estimated by the Commission, after con-
sultation with the Office of Management 
and Budget, using the methodology re-
quired 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 re-
ceipt amount’ means, with respect to a fis-
cal 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 suc-
ceeding fiscal year, and any estimate or projection 
on which the fee rates are based. 
‘‘(7) INAPPLICABILITY
OF
CERTAIN
PROCE-
DURAL
RULES.—Section 553 of title 5, United 
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States Code, shall not apply with respect to any ex-
ercise of authority under this subsection. 
‘‘(8) ESTABLISHMENT
OF
FUTURES
AND
OP-
TIONS
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 enact-
ment of this Act, by substituting ‘‘August 31’’ for ‘‘April 
30’’. 
SEC. 357. NO EFFECT ON AUTHORITY OF THE FEDERAL 
TRADE COMMISSION. 
Nothing in this subtitle shall be interpreted to affect 
or diminish the jurisdiction or authority of the Federal 
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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 carry out the respon-
sibilities of the Federal Trade Commission. 
SEC. 358. REGULATION OF CARBON DERIVATIVES MAR-
KETS. 
(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 reg-
ulations that apply under this Act to included energy 
transactions.’’. 
(b) PRESIDENTIAL DETERMINATIONS.—To the ex-
tent that the President delegates the authority to promul-
gate 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 Fed-
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eral Power Act, such determination shall supersede sub-
section (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 regu-
lations shall supersede subsection (a). Nothing in this sec-
tion shall be construed to affect the operation of the de-
fault rules established in section 401(c)(4) of the Federal 
Power Act. 
TITLE IV—TRANSITIONING TO A 
CLEAN ENERGY ECONOMY 
Subtitle A—Industrial Sector 
SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL 
EMISSIONS. 
Title VII of the Clean Air Act is amended by insert-
ing 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 signifi-
cantly reduce greenhouse gas emissions, and, 
through this global effort, stabilize greenhouse gas 
concentrations in the atmosphere at a level that will 
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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 in-
curred under this title. 
‘‘(b) PURPOSES OF SUBPART 1.—The purposes of 
subpart 1 are additionally— 
‘‘(1) to rebate the owners and operators of enti-
ties in eligible domestic 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 innova-
tion and facility-level investments in energy effi-
ciency performance improvements; and 
‘‘(3) to eliminate or reduce distribution of emis-
sion allowances under this part when such distribu-
tion 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 effec-
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tively addressed and achieved through agreements nego-
tiated 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 Na-
tions 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 for-
eign 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 for 
which the President has made a determination described 
in section 767(c). 
‘‘SEC. 763. DEFINITIONS. 
‘‘In this part: 
‘‘(1) CARBON
LEAKAGE.—The term ‘carbon 
leakage’ means any substantial increase (as deter-
mined by the Administrator) in greenhouse gas 
emissions by industrial entities located in other 
countries if such increase is caused by an incre-
mental cost of production increase in the United 
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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 sec-
tion 764(b) to be eligible to receive emission allow-
ance rebates under subpart 1. 
‘‘(3) INDUSTRIAL SECTOR.—The term ‘indus-
trial sector’ means any sector that is in the manu-
facturing 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 eligi-
ble industrial sector that is— 
‘‘(A) iron, steel, steel mill products (includ-
ing pipe and tube), aluminum, cement, glass 
(including flat, container, and specialty glass 
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and fiberglass), pulp, paper, chemicals, or in-
dustrial ceramics; or 
‘‘(B) any other manufactured product that 
is sold in bulk for purposes of further manufac-
ture 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 produc-
tion 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 Feb-
ruary 1, 2013, and every four years thereafter, the 
Administrator shall publish in the Federal Register 
an updated version of the list published under para-
graph (1). 
‘‘(b) ELIGIBLE INDUSTRIAL SECTORS.— 
‘‘(1) IN GENERAL.—Not later than June 30, 
2011, the Administrator shall promulgate a rule des-
ignating, based on the criteria under paragraph (2), 
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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 in-
cluded 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 Admin-
istrator, 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 di-
viding— 
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‘‘(aa) the number 20 multi-
plied by the number of tons of 
carbon dioxide equivalent green-
house gas emissions (including 
direct emissions from fuel com-
bustion, process emissions, and 
indirect emissions from the gen-
eration of electricity used to 
produce the output of the sector) 
of the sector; by 
‘‘(bb) the value of the ship-
ments of the sector, based on 
data described in subparagraph 
(E). 
‘‘(ii) TRADE
INTENSITY.—As deter-
mined 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 sec-
tor 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 GREEN-
HOUSE GAS INTENSITY.—As determined by 
the Administrator, the industrial sector 
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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.—The Ad-
ministrator shall consider as in different indus-
trial sectors— 
‘‘(i) entities using integrated iron and 
steelmaking technologies (including coke 
ovens, blast furnaces, and other iron-mak-
ing technologies); and 
‘‘(ii) entities using electric arc furnace 
technologies. 
‘‘(C) METAL
PRODUCTION
CLASSIFIED 
UNDER MORE THAN ONE NAICS CODE.—In de-
termining eligibility under this subsection, the 
Administrator shall— 
‘‘(i) 
aggregate 
data 
for 
the 
beneficiation or other processing of iron 
and copper ores with subsequent steps in 
the process of metal manufacturing regard-
less of the NAICS code under which such 
activity is classified; and 
‘‘(ii) aggregate data for the manufac-
turing of steel with the manufacturing of 
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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 Adminis-
trator 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 indus-
trial classification level of Energy Informa-
tion Agency’s Manufacturing Energy Con-
sumption 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 
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Manufacturing Energy Consumption Sur-
vey 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 Con-
sumption 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 in-
dustrial sector. 
‘‘(ii) IMPORTS
AND
EXPORTS.—The 
Administrator shall base the value of im-
ports and exports under this subsection on 
United States International Trade Com-
mission 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 Adminis-
trator shall round the energy intensity, 
greenhouse gas intensity, and trade inten-
sity percentages under subparagraph (A) 
to the nearest whole number. 
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‘‘(iv) GREENHOUSE
GAS
EMISSION 
CALCULATIONS.—When 
calculating 
the 
tons of carbon dioxide equivalent green-
house gas emissions for each sector under 
subparagraph (A)(i)(II)(aa), the Adminis-
trator may, to the extent necessary with 
respect to a sector, use economic and engi-
neering models and the best available in-
formation on technology performance levels 
for such sector. 
‘‘(3) ADMINISTRATIVE DETERMINATION OF AD-
DITIONAL ELIGIBLE INDUSTRIAL SECTORS.— 
‘‘(A) INDIVIDUAL SHOWING PETITION.— 
‘‘(i) PETITION.—The owner or oper-
ator of an entity in an industrial sector 
may petition the Administrator to des-
ignate as eligible industrial sectors under 
this subpart an entity or a group of enti-
ties 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 para-
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graph (2)(A), or the eligibility criteria 
in clause (iii) of paragraph (2)(A). 
‘‘(ii) DATA.—In making a determina-
tion under this subparagraph, the Admin-
istrator 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
DETER-
MINATION.—The Administrator shall de-
termine 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 proc-
ess by which the products are manufac-
tured, 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 recy-
cled material. 
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‘‘(iv) FINAL ACTION.—The Adminis-
trator shall take final action on such peti-
tion no later than 6 months after the peti-
tion is received by the Administrator. 
‘‘(B) 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. 
‘‘(C) USE OF MOST RECENT DATA.—In de-
termining whether to designate a sector or sub-
sector as an eligible industrial sector under this 
paragraph, the Administrator shall use the 
most recent data available from the sources de-
scribed 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. 
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‘‘SEC. 765. DISTRIBUTION OF EMISSION ALLOWANCE RE-
BATES. 
‘‘(a) DISTRIBUTION SCHEDULE.— 
‘‘(1) IN GENERAL.—For each vintage year, the 
Administrator shall distribute allowances pursuant 
to this section no later than October 31 of the pre-
ceding calendar year. The Administrator shall make 
such annual distributions to the owners and opera-
tors 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 en-
tity’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; 
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‘‘(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 sub-
section, then the reduction schedule set forth in 
paragraph (1)(B) of this subsection shall begin in 
the next vintage year, with the percentage reduction 
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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 peti-
tion for eligibility was granted under section 
764(b)(3). 
‘‘(b) CALCULATION OF DIRECT AND INDIRECT CAR-
BON FACTORS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) COVERED ENTITIES.—Except as pro-
vided in subsection (a), for covered entities, 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 
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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 gov-
erning the distribution of emission allowance re-
bates 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 allow-
ance rebates to such entities based on com-
parable 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 appro-
priate data been available. 
‘‘(2) DIRECT CARBON FACTOR.—The direct car-
bon factor for a covered entity for a vintage year is 
the product of— 
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‘‘(A) the average output of the covered en-
tity for the two years preceding the year of the 
distribution; and 
‘‘(B) the most recent calculation of the av-
erage direct greenhouse gas emissions (ex-
pressed 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 calendar year is the 
product obtained by multiplying the average 
output of the entity for the two years preceding 
the years of the distribution by both the elec-
tricity emissions intensity factor determined 
pursuant to subparagraph (B) and the elec-
tricity 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 oper-
ator of the entity and the Administrator, on an 
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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 cost the person selling 
the electricity passes to the entity per 
ton of carbon dioxide equivalent emit-
ted by the electricity provider per kilo-
watt hour, taking into account the en-
tity’s retail rate arrangements, by 
‘‘(ii) the total kilowatt hours of elec-
tricity 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 
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based on the best available data, including data 
provided under paragraph (6). 
‘‘(D) INDIRECT CARBON FACTOR REDUC-
TION.—If an electricity provider received a free 
allocation of emission allowances pursuant to 
section ø782¿, the Administrator shall adjust 
the indirect carbon factor to avoid rebates to 
the eligible entity for costs that the Adminis-
trator determines were not incurred by the in-
dustrial entity because the allowances were free-
ly allocated to the eligible entity’s electricity 
provider and used for the benefit of industrial 
consumers. 
‘‘(4) GREENHOUSE
GAS
INTENSITY
CALCULA-
TIONS.—The Administrator shall calculate the aver-
age direct greenhouse gas emissions (expressed in 
tons of carbon dioxide equivalent) per unit of output 
for all covered entities in each eligible industrial sec-
tor 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 Ad-
ministrator shall— 
‘‘(A) limit the average direct greenhouse 
gas emissions per unit of output, calculated 
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under paragraph (4), for any eligible industrial 
sector to an amount that is not greater than it 
was in any previous calculation under this sub-
section; and 
‘‘(B) limit the electric 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 depart-
ment, 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.—Notwith-
standing subsections (a) and (b), the Administrator shall 
not distribute more allowances for any vintage year pursu-
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ant to this section than are allocated for use under this 
part pursuant to section ø782¿ 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 ø782¿, 
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 ø782¿. 
‘‘Subpart 2—International Reserve Allowance 
Program 
‘‘SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PRO-
GRAM. 
‘‘(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 regula-
tions— 
‘‘(A) determining an appropriate price for 
and offering for sale to United States importers 
international reserve allowances; 
‘‘(B) requiring the submission of appro-
priate amounts of such allowances in conjunc-
tion with the importation into the United States 
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of a primary product produced or manufactured 
by that sector; 
‘‘(C) exempting from the requirements of 
subparagraph (B) primary products produced 
in— 
‘‘(i) foreign countries that the United 
Nations has identified as among the least 
developed of developing countries; or 
‘‘(ii) foreign countries that the Presi-
dent has determined to be responsible for 
less than 0.5 percent of total global green-
house gas emissions; and 
‘‘(D) prohibiting the introduction into 
interstate commerce of a primary product with-
out submitting the required number of inter-
national reserve allowances in accordance with 
such regulations, unless the product was pro-
duced 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 Adminis-
trator 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 
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producing or manufacturing primary products in in-
dustrial sectors resulting from the difference be-
tween— 
‘‘(A) the direct and indirect costs of com-
plying with this title; and 
‘‘(B) the direct and indirect costs, if any, 
of complying in other countries with greenhouse 
gas regulatory programs, requirements, export 
tariffs, or other measures adopted or imposed 
to reduce 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 al-
lowances may not be held by covered entities to comply 
with section 722. 
‘‘Subpart 3—Presidential Determination 
‘‘SEC. 767. PRESIDENTIAL REPORTS AND DETERMINA-
TIONS. 
‘‘(a) REPORT.—Not later than January 1, 2018, the 
President shall submit a report to Congress on the effec-
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tiveness 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 Re-
serve Allowance Program; and 
‘‘(2) an assessment of the amount and duration 
of assistance, including distribution of free allow-
ances, being provided to eligible industrial sectors in 
other developed countries to mitigate costs of com-
pliance with domestic greenhouse gas reduction pro-
grams 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 eligi-
ble 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 
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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 sec-
tor 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, in-
cluding sectoral caps, export tariffs, production fees, 
electricity generation regulations, or greenhouse gas 
emissions fees, that individually or collectively im-
pose an incremental increase on the cost of produc-
tion 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 pro-
duced or manufactured in countries that have met one or 
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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 al-
lowance 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 ad-
dressed, 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), explain-
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ing the reasons for such determination, and identifying the 
actions taken by the President under subsection (c). 
‘‘(e) LIMITATION.—The President may only imple-
ment an International Reserve Allowance Program for sec-
tors producing primary products.’’. 
SEC. 402. ALLOCATIONS TO PETROLEUM REFINERIES. 
Title VII of the Clean Air Act is amended by insert-
ing after part F the following new part: 
‘‘PART G—PETROLEUM REFINERIES 
‘‘SEC. 771. ALLOCATIONS TO PETROLEUM REFINERIES. 
‘‘(a) OUTPUT.—In this section, the term ‘output’ 
means the total tonnage or other standard unit of produc-
tion (as determined by the Administrator) produced by a 
petroleum refinery. 
‘‘(b) IN GENERAL.—For each vintage year between 
2014 and 2026, the Administrator shall distribute allow-
ances pursuant to this section to owners and operators of 
petroleum refineries in the United States. 
‘‘(c) DISTRIBUTION SCHEDULE.—The Administrator 
shall distribute emission allowances of each vintage year 
no later than October 31 of the preceding calendar year. 
‘‘(d) CALCULATION OF EMISSION ALLOWANCE RE-
BATES.— 
‘‘(1) IN GENERAL.—The amount of emission al-
lowance rebates distributed to each refinery shall be 
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based on the sum of the refinery’s direct and indi-
rect carbon factors. 
‘‘(2) NEW REFINERIES.—Not later than 2 years 
after the date of enactment of this section, the Ad-
ministrator shall issue regulations governing the dis-
tribution of emission allowance rebates for the first 
and second years of operation of a new petroleum 
refinery. These regulations shall provide for— 
‘‘(A) the distribution of emission allowance 
rebates to such petroleum refineries based on 
comparable petroleum refineries; and 
‘‘(B) 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 petroleum refinery would 
have received during the first and second years 
of operation had the appropriate data been 
available. 
‘‘(3) DIRECT CARBON FACTOR.—The direct car-
bon factor for a petroleum refinery for a vintage 
year is the product of— 
‘‘(A) the average output of the petroleum 
refinery for the two years preceding the year of 
the distribution; and 
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‘‘(B) the most recent calculation of the av-
erage direct greenhouse gas emissions (ex-
pressed in tons of carbon dioxide equivalent) 
per unit of output for all petroleum refineries, 
as determined by the Administrator under para-
graph (5). 
‘‘(4) INDIRECT CARBON FACTOR.— 
‘‘(A) IN
GENERAL.—The indirect carbon 
factor for a petroleum refinery for a vintage 
year is the product obtained by multiplying the 
average output of the petroleum refinery for the 
two years preceding the years of the distribu-
tion by both the electricity emissions intensity 
factor determined pursuant to subparagraph 
(B) and the electricity efficiency factor deter-
mined pursuant to subparagraph (C) for the 
year concerned. 
‘‘(B) ELECTRICITY EMISSIONS INTENSITY 
FACTOR.—Each person selling electricity to the 
owner or operator of a petroleum refinery shall 
provide the owner or operator of the petroleum 
refinery and the Administrator, on an annual 
basis, the electricity emissions intensity factor 
for the petroleum refinery. The electricity emis-
sions intensity factor for the petroleum refinery, 
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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 petroleum refinery from that per-
son in each hour (expressed in kilo-
watt hours), multiplied by 
‘‘(II) the cost the person selling 
the electricity passes to the petroleum 
refinery per ton of carbon dioxide 
equivalent emitted by the electricity 
provider per kilowatt hour, taking into 
account the petroleum refinery’s retail 
rate arrangements, by 
‘‘(ii) the total kilowatt hours of elec-
tricity purchased by the petroleum refinery 
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 petroleum refineries, 
as determined by the Administrator based on 
the best available data, including data provided 
under paragraph (7). 
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‘‘(D) INDIRECT CARBON FACTOR REDUC-
TION.—If an electricity provider received a free 
allocation of emission allowances pursuant to 
section 782, the Administrator shall adjust the 
indirect carbon factor to avoid rebates to the 
petroleum refinery for costs that the Adminis-
trator determines were not incurred by the pe-
troleum refinery because the allowances were 
freely allocated to the petroleum refinery’s elec-
tricity provider and used for the benefit of pe-
troleum refineries. 
‘‘(5) GREENHOUSE
GAS
INTENSITY
CALCULA-
TIONS.—The Administrator shall calculate the aver-
age direct greenhouse gas emissions (expressed in 
tons of carbon dioxide equivalent) per unit of output 
for all petroleum refineries not less than once every 
five years using an average of the two most recent 
years of the best available data. 
‘‘(6) ENSURING EFFICIENCY IMPROVEMENTS.— 
When making greenhouse gas calculations, the Ad-
ministrator shall— 
‘‘(A) limit the average direct greenhouse 
gas emissions per unit of output, calculated 
under paragraph (5), to an amount that is not 
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greater than it was in any previous calculation 
under this subsection; and 
‘‘(B) limit the electricity emissions inten-
sity factor, calculated under paragraph (4)(B) 
and resulting from a change in electricity sup-
ply, for any petroleum refinery to an amount 
that is not greater than it was during any pre-
vious year. 
‘‘(7) 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 a petro-
leum refinery and each department, agency, and 
instrumentality of the United States shall pro-
vide the Administrator with such information as 
the Administrator finds necessary to determine 
the direct carbon factor and the indirect carbon 
factor for each petroleum refinery subject to 
this section. 
‘‘(e) TOTAL MAXIMUM DISTRIBUTION.—The Admin-
istrator shall not distribute more allowances for any vin-
tage year pursuant to this section than are allocated for 
use under this part pursuant to section 782 for that vin-
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tage year. For any vintage year for which the total emis-
sion allowance rebates calculated pursuant to this section 
exceed the number of allowances allocated pursuant to sec-
tion 782, the Administrator shall reduce each petroleum 
refinery’s distribution on a pro rata basis so that the total 
distribution under this section equals the number of allow-
ances allocated under section 782.’’. 
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 eli-
gible partnerships to develop programs of study (con-
taining 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 emerg-
ing careers and jobs in renewable energy, energy effi-
ciency, and climate change mitigation. The Secretary of 
Education shall consult with the Secretary of Labor and 
the Secretary of Energy prior to the issuance of a solicita-
tion for grant applications. 
(b) ELIGIBLE PARTNERSHIPS.—For purposes of this 
section, an eligible partnership shall include— 
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(1) at least 1 local educational agency eligible 
for funding under section 131 of the Carl D. Per-
kins Career and Technical Education Act of 2006 
(20 U.S.C. 2351) or an area career and technical 
education school or education service agency de-
scribed 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 clean energy. 
(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 Sec-
retary 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 ca-
pacity to support the program; 
(2) a description of the career area or areas 
within the field of clean energy to be developed, the 
reason for the choice, and evidence of the labor mar-
ket need to prepare students in that area; 
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(3) a description of the new or existing program 
of study and both secondary and postsecondary com-
ponents; 
(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 dissemi-
nated 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 pro-
vide accessibility to students, especially economically 
disadvantaged, low performing, and urban and rural 
students; 
(9) a description of how the program will ad-
dress 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 organiza-
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tion, labor management partnership, apprenticeship 
program, or joint apprenticeship and training pro-
gram that provides education and training in the 
field of study for which the applicant proposes to de-
velop 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 partner-
ship; and 
(2) focus on low performing students and spe-
cial 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 com-
mittee shall include— 
(1) educators who have experience imple-
menting curricula with comparable purposes; and 
(2) business and industry experts in clean en-
ergy-related fields. 
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(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. 342(c)(1)(A))) in ca-
reer areas related to clean energy, renewable energy, en-
ergy efficiency, and climate change mitigation. 
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 eli-
gibility 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. 
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(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 em-
ployment security agencies, or the State dis-
located 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 lo-
cated. 
(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 In-
vestment Act of 1998 (29 U.S.C. 2864)) au-
thorized 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. 
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(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 re-
ceived 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 af-
ford 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 ad-
justment 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; 
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(iv) consumer goods manufacturing; 
or 
(v) other industries whose employment 
the Secretary determines has been ad-
versely affected by any requirement of title 
VII of the Clean Air Act; 
(B) the Secretary determines that a sig-
nificant number or proportion of the workers in 
such workers’ employment site have become to-
tally or partially separated, or are threatened to 
become totally or partially separated from em-
ployment; 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 clos-
ing of a facility or layoff of employees at 
a facility that mines, produces, processes, 
or utilizes fossil fuels to generate elec-
tricity; 
(ii) a substantial increase in the cost 
of energy required for a manufacturing fa-
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cility to produce items whose prices are 
competitive in the marketplace, to the ex-
tent the cost is not offset by allowance al-
location to the facility pursuant to title VII 
of the Clean Air Act; or 
(iii) other documented occurrences 
that the Secretary determines are indica-
tors 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 em-
ployment, 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
WORK-
ERS.—A group of workers shall be certified as eligi-
ble to apply for climate change adjustment assist-
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ance pursuant to a petition filed if the Secretary de-
termines 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 para-
graph (1) have become totally or partially sepa-
rated 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 di-
rectly attributable to one or more of the docu-
mented occurrences listed in paragraph (1)(C). 
(c) AUTHORITY TO INVESTIGATE AND COLLECT IN-
FORMATION.— 
(1) IN GENERAL.—The Secretary shall, in de-
termining whether to certify a group of workers 
under subsection (d), obtain information the Sec-
retary determines to be necessary to make the cer-
tification, through questionnaires and in such other 
manner as the Secretary determines appropriate 
from— 
(A) the workers’ employer; 
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(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 In-
vestment Act of 1998 (29 U.S.C. 2801)); or 
(2) VERIFICATION OF INFORMATION.—The Sec-
retary shall require an employer, union, or one-stop 
operator or partner to certify all information ob-
tained 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 Sec-
retary has a reasonable basis for determining that 
such information is accurate and complete without 
being certified. 
(3) PROTECTION OF CONFIDENTIAL INFORMA-
TION.—The Secretary may not release information 
obtained under paragraph (1) that the Secretary 
considers to be confidential business information un-
less the employer submitting the confidential busi-
ness information had notice, at the time of submis-
sion, that the information would be released by the 
Secretary, or the employer subsequently consents to 
the release of the information. Nothing in this para-
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graph shall be construed to prohibit the Secretary 
from providing such confidential business informa-
tion 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 of the 
Environmental Protection Agency, 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 separa-
tion 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 De-
partment of Labor, together with the Secretary’s 
reasons for making such determination. 
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(2) ONE
YEAR
LIMITATION.—A certification 
under this section shall not apply to any worker 
whose last total or partial separation from the em-
ployment 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.—When-
ever the Secretary determines, with respect to any 
certification of eligibility of the workers of an em-
ployment site, that total or partial separations from 
such site are no longer a result of the factors speci-
fied in subsection (b)(1), the Secretary shall termi-
nate such certification and promptly have notice of 
such termination published in the Federal Register 
and on the website of the Department of Labor, to-
gether 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 Sec-
retary of Labor shall notify the representatives of the do-
mestic industry affected by the determination, employers 
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publicly identified by name during the course of the pro-
ceeding 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, PRO-
VIDERS OF TRAINING.— 
(1) IN GENERAL.—The Secretary shall provide 
full information to workers about the adjustment al-
lowances, training, and other benefits available 
under this part and about the petition and applica-
tion procedures, and the appropriate filing dates, for 
such allowances, training and services. The Sec-
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retary 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 en-
tered into under section 426(a) and shall periodically 
review such compliance. The Secretary shall inform 
the State Board for Vocational Education or equiva-
lent agency, the one-stop operators or one-stop part-
ners (as defined in section 101 of the Workforce In-
vestment Act of 1998 (29 U.S.C. 2801), and other 
public or private agencies, institutions, and employ-
ers, 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 pro-
vide 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 cer-
tification 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— 
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(B) at the time of the total or partial sepa-
ration 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 sec-
tion 425(b) who files an application for such allow-
ance for any week of unemployment which begins on 
or after the date of such certification, if the fol-
lowing conditions are met: 
(A) Such worker’s total or partial separa-
tion 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 
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covered, on which total or partial separa-
tion 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 pe-
riod 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 regu-
lations 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, ma-
ternity, or inactive duty or active duty 
military service for training; 
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(ii) does not work because of a dis-
ability that is compensable under a work-
men’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 representa-
tive 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 sub-
section (b)(2). 
(2) INELIGIBILITY FOR CERTAIN OTHER BENE-
FITS.—An adversely affected worker receiving a pay-
ment 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— 
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(i) the adversely affected worker— 
(I) has failed to begin participa-
tion in the training program the en-
rollment in which meets the require-
ment of paragraph (1)(C); or 
(II) has ceased to participate in 
such training program before com-
pleting 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 ad-
versely affected worker under this part for the week 
in which such failure, cessation, or revocation oc-
curred, 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 
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appropriate for the worker, because of 1 or more of 
the following reasons: 
(A) RECALL.—The worker has been noti-
fied that the worker will be recalled by the em-
ployer from which the separation occurred. 
(B) MARKETABLE SKILLS.— 
(i) IN
GENERAL.—The worker pos-
sesses marketable skills for suitable em-
ployment (as determined pursuant to an 
assessment of the worker, which may in-
clude 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 ‘‘mar-
ketable skills’’ may include the possession 
of a postgraduate degree from an institu-
tion of higher education (as defined in sec-
tion 102 of the Higher Education Act of 
1965 (20 U.S.C. 1002)) or an equivalent 
institution, or the possession of an equiva-
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lent postgraduate certification in a special-
ized field. 
(C) RETIREMENT.—The worker is within 2 
years of meeting all requirements for entitle-
ment 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 sub-
paragraph shall not be construed to exempt a 
worker from requirements relating to the avail-
ability for work, active search for work, or re-
fusal to accept work under Federal or State un-
employment 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 para-
graph, or, if later, there are extenuating cir-
cumstances for the delay in enrollment, as de-
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termined 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 govern-
mental 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 avail-
able at a reasonable cost, or no training funds 
are available. 
(5) WEEKLY
AMOUNTS.—The climate change 
adjustment allowance payable to an adversely af-
fected 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 work-
ers in the State where the adversely affected worker 
resides. 
(6) MAXIMUM DURATION OF BENEFITS.—An el-
igible worker may receive a climate change adjust-
ment allowance under this subsection for a period of 
not longer than 156 weeks. 
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(b) EMPLOYMENT SERVICES AND TRAINING.— 
(1) INFORMATION
AND EMPLOYMENT SERV-
ICES.—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 in-
formation and employment services: 
(A) Comprehensive and specialized assess-
ment of skill levels and service needs, including 
through— 
(i) diagnostic testing and use of other 
assessment tools; and 
(ii) in-depth interviewing and evalua-
tion to identify employment barriers and 
appropriate employment goals. 
(B) Development of an individual employ-
ment plan to identify employment goals and ob-
jectives, and appropriate training to achieve 
those goals and objectives. 
(C) Information on training available in 
local and regional areas, information on indi-
vidual counseling to determine which training is 
suitable training, and information on how to 
apply for such training. 
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(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, infor-
mation on individual counseling to determine 
which training is suitable training, and informa-
tion on how to apply for such training. 
(E) Information on how to apply for finan-
cial aid, including referring workers to edu-
cational opportunity centers described in section 
402F of the Higher Education Act of 1965 (20 
U.S.C. 1070a–16), where applicable, and noti-
fying workers that the workers may request fi-
nancial aid administrators at institutions of 
higher education (as defined in section 102 of 
such Act (20 U.S.C. 1002)) to use the adminis-
trators’ discretion under section 479A of such 
Act (20 U.S.C. 1087tt) to use current year in-
come 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, in-
cluding development of learning skills, commu-
nications skills, interviewing skills, punctuality, 
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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 cli-
mate change adjustment allowance or training 
under this part, and after receiving such train-
ing for purposes of job placement. 
(H) Provision of employment statistics in-
formation, including the provision of accurate 
information relating to local, regional, and na-
tional labor market areas, including— 
(i) job vacancy listings in such labor 
market areas; 
(ii) information on jobs skills nec-
essary to obtain jobs identified in job va-
cancy listings described in subparagraph 
(A); 
(iii) information relating to local occu-
pations that are in demand and earnings 
potential of such occupations; and 
(iv) skills requirements for local occu-
pations described in subparagraph (C). 
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(I) Information relating to the availability 
of supportive services, including services relat-
ing to child care, transportation, dependent 
care, housing assistance, and need-related pay-
ments that are necessary to enable an indi-
vidual 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 profes-
sional employment) available for an ad-
versely affected worker; 
(ii) the worker would benefit from ap-
propriate training; 
(iii) there is a reasonable expectation 
of employment following completion of 
such training; 
(iv) training approved by the Sec-
retary is reasonably available to the worker 
from either governmental agencies or pri-
vate sources (including area career and 
technical education schools, as defined in 
section 3 of the Carl D. Perkins Career 
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and Technical Education Act of 2006, and 
employers); 
(v) the worker is qualified to under-
take 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 im-
posed by this section) paid on the worker’s be-
half 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 pro-
grams approved under this paragraph, and shall 
make an initial distribution of the funds made 
available as soon as practicable after the begin-
ning of each fiscal year. 
(C) ADDITIONAL
RULES
REGARDING
AP-
PROVAL OF AND PAYMENT FOR TRAINING.— 
(i) For purposes of applying subpara-
graph (A)(iii), a reasonable expectation of 
employment does not require that employ-
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ment opportunities for a worker be avail-
able, or offered, immediately upon the 
completion of training approved under 
such subparagraph. 
(ii) If the costs of training an ad-
versely 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 subpara-
graph (A) of the costs of training an ad-
versely affected worker or an adversely af-
fected 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 Fed-
eral law which are used for any purpose 
other than the direct payment of the costs 
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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 subpara-
graph (A) include— 
(i) employer-based training, includ-
ing— 
(I) on-the-job training if ap-
proved by the Secretary under sub-
section (c); and 
(II) joint labor-management ap-
prenticeship programs; 
(ii) any training program provided by 
a State pursuant to title I of the Work-
force 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 tech-
nical education described in section 3(5) of 
the Carl D. Perkins Career and Technical 
Education Act of 2006; 
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(v) any program of remedial edu-
cation; 
(vi) any program of prerequisite edu-
cation 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; 
(ix) 
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 pro-
gram or coursework for the purpose of— 
(I) obtaining a degree or certifi-
cation; or 
(II) completing a degree or cer-
tification that the worker had pre-
viously begun at an accredited institu-
tion of higher education; and 
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(viii) any other training program ap-
proved 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 
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(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 en-
sure, in entering into a contract with an em-
ployer to provide on-the-job training to a work-
er under this subsection, that the skill require-
ments 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. 
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(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 condi-
tions that are equivalent to the wages, benefits, 
and working conditions provided to regular em-
ployees 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 ll 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 ad-
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justment assistance for workers program under 
this part, including for— 
(i) processing waivers of training re-
quirements under subsection (a)(4); and 
(ii) collecting, validating, and report-
ing data required under this part; 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 para-
graph (1) for a fiscal year, the Secretary shall 
provide to the State for the fiscal year a reason-
able payment for the purpose of providing em-
ployment and services under subsection (b)(1). 
(B) VOLUNTARY RETURN OF FUNDS.—A 
State that receives a payment under subpara-
graph (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 pre-
scribed by the Secretary. Any job search allowance pro-
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vided shall be available only under the following cir-
cumstances and conditions: 
(1) The worker is no longer eligible for the cli-
mate 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 em-
ployment in the commuting area in which the worker 
resides. 
(3) An allowance granted shall provide reim-
bursement to the worker of all necessary job search 
expenses as prescribed by the Secretary in regula-
tions. Such reimbursement under this subsection 
may not exceed $1,500 for any worker. 
(f) RELOCATION ALLOWANCE AUTHORIZED.— 
(1) IN GENERAL.—Any adversely affected work-
er covered by a certification issued under section 
425 may file an application for a relocation allow-
ance 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: 
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(A) ASSIST
AN
ADVERSELY
AFFECTED 
WORKER.—The relocation allowance will assist 
an adversely affected worker in relocating with-
in the United States. 
(B) LOCAL
EMPLOYMENT
NOT
AVAIL-
ABLE.—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. 
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(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 ex-
penses at levels not exceeding amounts pre-
scribed by the Secretary in regulations) in-
curred 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 max-
imum 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 
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participating in a training program described in sub-
section (b)(2), 80 percent of the monthly premium of any 
health insurance coverage that an adversely affected work-
er 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 re-
ceive applications for, and shall provide, pay-
ments on the basis provided in this part; 
(B) in accordance with paragraph (6), 
shall make available to adversely affected work-
ers covered by a certification under section 
425(d) the employment services described in 
section 426(b)(1); 
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(C) shall make any certifications required 
under section 425(d); and 
(D) shall otherwise cooperate with the Sec-
retary and with other State and Federal agen-
cies 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 author-
ity 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 INSUR-
ANCE.—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 insur-
ance otherwise payable to such worker under the 
laws of the State. 
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785 
(4) REVIEW.—A determination by a cooper-
ating 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 coordi-
nation of the administration of the provisions for 
employment services, training, and supplemental as-
sistance 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 admin-
istering such provisions under such agreement shall 
be considered to be a cooperating State agency for 
purposes of this part. 
(6) RESPONSIBILITIES OF COOPERATING AGEN-
CIES.—Each cooperating State agency shall, in car-
rying out paragraph (1)(B)— 
(A) advise each worker who applies for un-
employment insurance of the benefits under this 
part and the procedures and deadlines for ap-
plying for such benefits; 
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(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) be-
fore, 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 re-
spect 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 work-
ers 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 pro-
grams; and 
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(F) provide the benefits and reemployment 
services under this part in a manner that is 
necessary for the proper and efficient adminis-
tration of this part, including the use of state 
agency personnel employed in accordance with a 
merit system of personnel administration stand-
ards, including— 
(i) making determinations of eligibility 
for, and payment of, climate change read-
justment allowances and health care ben-
efit replacement amounts; 
(ii) developing recommendations re-
garding payments as a bridge to retire-
ment and lump sum payments to pension 
plans in accordance with this subsection; 
and 
(iii) the provision of reemployment 
services to eligible workers, including refer-
ral 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 infor-
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mation described in paragraphs (8) and (14) of sec-
tion 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 re-
quire each cooperating State and cooperating 
State agency to implement effective control 
measures and to effectively oversee the oper-
ation 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 sub-
paragraph (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 accu-
racy and verifiability of such data. 
(9) DATA REPORTING.— 
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(A) IN GENERAL.—Any agreement entered 
into under this section shall require the cooper-
ating State or cooperating State agency to re-
port to the Secretary on a quarterly basis com-
prehensive performance accountability data, to 
consist of— 
(i) the core indicators of performance 
described in subparagraph (B)(i); 
(ii) the additional indicators of per-
formance 
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 pro-
gram. 
(B) CORE INDICATORS DESCRIBED.— 
(i) IN GENERAL.—The core indicators 
of performance described in this subpara-
graph are— 
(I) the percentage of workers re-
ceiving benefits under this part who 
are employed during the second cal-
endar quarter following the calendar 
quarter in which the workers cease re-
ceiving such benefits; 
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(II) the percentage of such work-
ers who are employed in each of the 
third and fourth calendar quarters fol-
lowing the calendar quarter in which 
the workers cease receiving such bene-
fits; and 
(III) the earnings of such work-
ers in each of the third and fourth 
calendar quarters following the cal-
endar quarter in which the workers 
cease receiving such benefits. 
(ii) ADDITIONAL
INDICATORS.—The 
Secretary and a cooperating State or co-
operating 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 RELI-
ABILITY OF DATA.—In preparing the quarterly 
report required by subparagraph (A), each co-
operating 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 reli-
able. 
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791 
(10) VERIFICATION OF ELIGIBILITY FOR PRO-
GRAM 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 sat-
isfactory immigration status. Once satisfactory 
immigration status has been initially verified 
through the immigration status verification sys-
tem described in section 1137(d) of the Social 
Security Act (42 U.S.C. 1320b–7(d)) for pur-
poses 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 re-
ceive benefits under this part. The State shall 
conduct such redetermination in a timely man-
ner, utilizing the immigration status verification 
system described in section 1137(d) of the So-
cial Security Act (42 U.S.C. 1320b–7(d)). 
(B) PROCEDURES.—The Secretary shall 
establish procedures to ensure the uniform ap-
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plication by the States of the requirements of 
this paragraph. 
(b) 
ADMINISTRATION
ABSENT
STATE
AGREE-
MENT.— 
(1) In any State where there is no agreement 
in force between a State or its agency under sub-
section (a), the Secretary shall promulgate regula-
tions for the performance of all necessary functions 
under section 426, including provision for a fair 
hearing for any worker whose application for pay-
ments 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 con-
tract with any private for-profit or nonprofit entity for the 
administration of the climate change adjustment assist-
ance 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 
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793 
for payment to each cooperating State the sums nec-
essary 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 re-
turned, 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 cer-
tifying payments or disbursing funds under the 
agreement or otherwise participating in the perform-
ance 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 indi-
vidual in an apprenticeship program or on-the-job 
training program under this part shall not displace 
(including a partial displacement, such as a reduc-
tion in the hours of non-overtime work, wages, or 
employment benefits) any employed employee. 
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794 
(2) PROHIBITION
ON
IMPAIRMENT
OF
CON-
TRACTS.—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 incon-
sistent 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 train-
ing, notwithstanding any other provision of this sec-
tion, only if— 
(A) in the case of training which would be 
inconsistent with the terms of a collective bar-
gaining agreement, the written concurrence of 
the labor organization concerned has been ob-
tained; 
(B) the job for which such adversely af-
fected worker is being trained is not being cre-
ated in a promotional line that will infringe in 
any way upon the promotional opportunities of 
currently employed individuals; 
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(C) such training is not for the same occu-
pation 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 reimburse-
ment 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 work-
ers 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. 
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(3) The term ‘‘average weekly wage’’ means 1⁄13 
of the total wages paid to an individual in the quar-
ter 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 oc-
curs 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 sepa-
ration 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 (exclud-
ing 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 speci-
fied in the last sentence of paragraph (4). 
(5) The term ‘‘benefit period’’ means, with re-
spect to an individual— 
(A) the benefit year and any ensuing pe-
riod, as determined under applicable State law, 
during which the individual is eligible for reg-
ular compensation, additional compensation, or 
extended compensation; or 
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(B) the equivalent to such a benefit year 
or ensuing period provided for under the appli-
cable Federal unemployment insurance law. 
(6) The term ‘‘consumer goods manufacturing’’ 
means the electrical equipment, appliance, and com-
ponent 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 green-
house 
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 trans-
forming industries’’ means the coal mining industry, 
oil and gas extraction, electricity power generation, 
transmission and distribution, and natural gas dis-
tribution. 
(10) The term ‘‘industries dependent on energy 
industries’’ means rail transportation and pipeline 
transportation. 
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(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 ‘‘par-
tially separated’’ refer, with respect to an individual 
who has not been totally separated, that such indi-
vidual 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 ad-
versely affected employment. 
(13) The term ‘‘public agency’’ means a depart-
ment 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 work-
ers supplying support or auxiliary services to an em-
ployment site. 
(16) The term ‘‘State’’ includes the District of 
Columbia and the Commonwealth of Puerto Rico: 
and the term ‘‘United States’’ when used in the geo-
graphical sense includes such Commonwealth. 
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