810 
Storage Research Corporation, will be paid wages at rates 
not less than those prevailing on projects of a character 
similar in the locality as determined by the Secretary of 
Labor in accordance with subchapter IV of chapter 31 of 
title 40, United States Code (commonly known as the 
‘‘Davis-Bacon Act’’). With respect to the labor standards 
specified in this section, the Secretary of Labor shall have 
the authority and functions set forth in Reorganization 
Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) 
and section 3145 of title 40, United States Code. 
(b) EXEMPTION.—Neither subsection (a) nor the re-
quirements of subchapter IV of chapter 31 of title 40, United 
States Code, shall apply to retrofitting of any residential 
building (as defined in section 202(a)(5)), or to retrofitting 
of a nonresidential building (as defined in section 
202(a)(1)) if the net interior space of such nonresidential 
building is less than 6,500 square feet, or if such nonresi-
dential building is designed for residential use for less than 
4 families. 
Subtitle D—Carbon Market 
Assurance 
SEC. 341. CARBON MARKET ASSURANCE. 
The Federal Power Act (16 U.S.C. 791a and following) 
is amended by adding at the end the following: 
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‘‘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 agree-
ments to sell. 
‘‘(2) COVERED ENTITY.—The term ‘covered enti-
ty’ 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, pur-
suant to title VII of the Clean Air Act. 
‘‘(5) REGULATED ALLOWANCE.—The term ‘regu-
lated allowance’ means any emission allowance, com-
pensatory allowance, offset credit, or Federal renew-
able electricity credit established or issued under the 
American Clean Energy and Security Act of 2009. 
‘‘(6) REGULATED ALLOWANCE DERIVATIVE.—The 
term ‘regulated allowance derivative’ means an in-
strument that is, or includes, an instrument— 
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‘‘(A) which— 
‘‘(i) is of the character of, or is com-
monly known to the trade as, a ‘put option’, 
‘call option’, ‘privilege’, ‘indemnity’, ‘ad-
vance guaranty’, ‘decline guaranty’, or 
‘swap agreement’; or 
‘‘(ii) is a contract of sale for future de-
livery other than an offset creation contract; 
and 
‘‘(B) the value of which, in whole or in 
part, is expressly linked to the price of a regu-
lated allowance or another regulated allowance 
derivative. 
‘‘(7) REGULATED INSTRUMENT.—The term ‘regu-
lated instrument’ means a regulated allowance or a 
regulated allowance derivative. 
‘‘(b) REGULATED ALLOWANCE MARKET.— 
‘‘(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 enactment 
of this section, and from time to time thereafter as 
may be appropriate. 
‘‘(2) REGULATIONS.—The regulations promul-
gated pursuant to paragraph (1) shall— 
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‘‘(A) provide for effective and comprehensive 
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 dis-
covery; prevention of fraud, market manipula-
tion, and excess speculation; and compliance 
with title VII of the Clean Air Act and section 
610 of the Public Utility Regulatory Policies Act 
of 1978; 
‘‘(E) as necessary, ensure that position lim-
itations for individual market participants are 
established with respect to each class of regulated 
allowances; 
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‘‘(F) as necessary, ensure that margin re-
quirements are established for each class of regu-
lated 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; 
and 
‘‘(I) establish standards for qualification as, 
and operation of, trading facilities for regulated 
allowances; 
‘‘(J) establish standards for qualification 
as, and operation of, clearing organizations for 
trading facilities for regulated allowances; and 
‘‘(K) include such other requirements as 
necessary to preserve market integrity and facili-
tate compliance with title VII of the Clean Air 
Act and section 610 of the Public Utility Regu-
latory Policies Act of 1978 and the regulations 
promulgated under such title and such section. 
‘‘(3) ENFORCEMENT.— 
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‘‘(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 Commission 
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, suspending 
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 
of a civil penalty, the Commission shall 
take into account the nature and seriousness 
of the violation and the efforts to remedy the 
violation); and 
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‘‘(iv) requiring disgorgement of unjust 
profits, restitution to entities harmed by the 
violation as determined by the Commission, 
or both. 
‘‘(B) AUTHORITY TO SUSPEND OR REVOKE 
REGISTRATION.—The Commission may suspend 
for a period of not more than 6 months, or re-
voke, the registration of a trading facility for 
regulated allowances or of a clearing organiza-
tion registered by the Commission if, after notice 
and opportunity for a hearing on the record, the 
Commission finds that— 
‘‘(i) the entity violated any rule or 
order issued by the Commission under this 
subsection; or 
‘‘(ii) a director, officer, employee, or 
agent of the entity has violated any rule or 
order issued by the Commission under this 
subsection. 
‘‘(C) CEASE AND DESIST PROCEEDINGS.— 
‘‘(i) IN GENERAL.—If the Commission 
determines that any entity may be vio-
lating, may have violated, or may be about 
to violate any provision of this part, or any 
regulation promulgated by, or any restric-
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tion, condition, or order made or imposed 
by, the Commission under this Act, and if 
the Commission finds that the alleged viola-
tion or threatened violation, or the continu-
ation of the violation, is likely to result in 
significant harm to covered entities or mar-
ket participants, or significant harm to the 
public interest, the Commission may issue a 
temporary order requiring the entity— 
‘‘(I) to cease and desist from the 
violation or threatened violation; 
‘‘(II) to take such action as is nec-
essary 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 partici-
pants; 
‘‘(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 
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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 no-
tice and hearing before entry would be im-
practicable or contrary to the public inter-
est. 
‘‘(iii) EFFECTIVE DATE.—A temporary 
order issued under clause (i) shall— 
‘‘(I) become effective upon service 
upon the entity; and 
‘‘(II) unless set aside, limited, or 
suspended by the Commission or a 
court of competent jurisdiction, remain 
effective and enforceable pending the 
completion of the proceedings. 
‘‘(D) PROCEEDINGS
REGARDING
DISSIPA-
TION OR CONVERSION OF ASSETS.— 
‘‘(i) IN GENERAL.—In a proceeding in-
volving an alleged violation of a regulation 
or order promulgated or issued by the Com-
mission, if the Commission determines that 
the 
alleged 
violation 
or 
related 
cir-
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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 no-
tice and hearing before entry would be im-
practicable or contrary to the public inter-
est. 
‘‘(iii) EFFECTIVE DATE.—A temporary 
order issued under clause (i) shall— 
‘‘(I) become effective upon service 
upon the respondent; and 
‘‘(II) unless set aside, limited, or 
suspended by the Commission or a 
court of competent jurisdiction, remain 
effective and enforceable pending the 
completion of the proceedings. 
‘‘(E) REVIEW OF TEMPORARY ORDERS.— 
‘‘(i) APPLICATION
FOR
REVIEW.—At 
any time after a respondent has been served 
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820 
with a temporary cease-and-desist order 
pursuant to subparagraph (C) or order re-
garding the dissipation or conversion of as-
sets pursuant to subparagraph (D), the re-
spondent may apply to the Commission to 
have the order set aside, limited, or sus-
pended. 
‘‘(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 
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. 
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821 
‘‘(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 ob-
tain a review of the order in a 
United States circuit court having 
jurisdiction over the circuit in 
which the respondent resides or 
has a principal place of business, 
or in the United States Court of 
Appeals for the District of Colum-
bia Circuit, for an order setting 
aside, limiting, or suspending the 
effectiveness or enforcement of the 
order; and 
‘‘(bb) the court shall have ju-
risdiction to enter such an order. 
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‘‘(III) NO PRIOR HEARING.—A re-
spondent 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). 
‘‘(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 
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unappealable, the Commission shall bring an ac-
tion to recover the amount of the penalty in any 
appropriate United States district court. In any 
such action, the validity or appropriateness 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, establish and 
collect transaction fees designed to recover the 
costs to the Federal Government of the super-
vision and regulation of regulated allowance 
markets and market participants, including re-
lated costs for enforcement activities, policy and 
rulemaking activities, administration, legal serv-
ices, and international regulatory activities. 
‘‘(B) INITIAL FEE RATE.—Each trading fa-
cility on or through which regulated allowances 
are transacted shall pay to the Commission a fee 
at a rate of not more than $15 per $1,000,000 
of the aggregate dollar amount of sales of regu-
lated allowances transacted through the facility. 
‘‘(C) ANNUAL ADJUSTMENT OF FEE RATE.— 
The Commission shall, on an annual basis— 
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‘‘(i) assess the rate at which fees are to 
be collected as necessary to meet the cost re-
covery 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 En-
ergy and Commerce of the House of Representa-
tives and the Committee on Energy and Natural 
Resources of the Senate on the adequacy of the 
transaction fees in providing funding for the 
Commission to regulate the regulated allowance 
markets. 
‘‘(5) JUDICIAL REVIEW.—Judicial review of ac-
tions taken by the Commission under this subsection 
shall be pursuant to part III. 
‘‘(6) INFORMATION-SHARING.—Within 6 months 
after a Federal agency with jurisdiction over regu-
lated allowance derivatives is delegated authority pur-
suant to subsection (c)(1), the agency shall enter into 
a memorandum of understanding with the Commis-
sion relating to information sharing, which shall in-
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clude provisions ensuring that information requests to 
markets within the respective jurisdiction of the agen-
cy are properly coordinated to facilitate, among other 
things, effective information-sharing while mini-
mizing duplicative information requests, and provi-
sions regarding the treatment of proprietary informa-
tion. 
‘‘(7) ADDITIONAL EMPLOYEES REPORT AND AP-
POINTMENT.—Within 18 months after the date of the 
enactment of this section, the Commission shall sub-
mit to the President, the Committee on Energy and 
Commerce of the House of Representatives, and the 
Committee on Energy and Natural Resources of the 
Senate, a report that contains recommendations as to 
how many additional employees would be necessary to 
provide robust oversight and enforcement of the regu-
lations promulgated under this subsection. As soon as 
practicable after the completion of the report, subject 
to appropriations, the Commission shall appoint the 
recommended number of additional employees for 
such purposes. 
‘‘(c) DELEGATION
OF AUTHORITY
BY
THE PRESI-
DENT.— 
‘‘(1) DELEGATION.—The President, taking into 
consideration the recommendations of the interagency 
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826 
working group established in subsection (d), shall del-
egate to members of the working group and the heads 
of other appropriate Federal agencies the authority to 
promulgate regulations for the establishment, oper-
ation, and oversight of all markets for regulated al-
lowance derivatives. 
‘‘(2) REGULATIONS.—The regulations promul-
gated pursuant to paragraph (1) shall— 
‘‘(A) provide for effective and comprehensive 
market oversight; 
‘‘(B) prohibit fraud, market manipulation, 
and excess speculation, and provide measures to 
limit unreasonable fluctuation in the prices of 
regulated allowance derivatives; 
‘‘(C) facilitate compliance with title VII of 
the Clean Air Act by covered entities; 
‘‘(D) ensure market transparency and 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 sec-
tion 610 of the Public Utility Regulatory Poli-
cies Act of 1978; 
‘‘(E) ensure that position limitations for in-
dividual market participants are established 
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827 
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 exe-
cution in the trading of regulated allowance de-
rivatives; 
‘‘(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 associ-
ated with over-the-counter trading, and promul-
gate reporting and market transparency rules for 
large traders; 
‘‘(I) ensure that market participants do not 
evade position limits or otherwise undermine the 
integrity and effectiveness of the regulations pro-
mulgated under subparagraph (C) through par-
ticipation in markets not subject to the position 
limits and regulations; 
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829 
‘‘(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 pro-
mulgate such regulations not later than 18 months 
after the date of the enactment of this section, and 
from time to time thereafter as may be appropriate. 
‘‘(4) DEFAULT RULES.— 
‘‘(A) An individual market participant, di-
rectly or in concert with another participant, 
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 ex-
ecuted on or through a board of trade designated 
as a contract market under the Commodity Ex-
change Act. 
‘‘(C) To the extent that regulations promul-
gated under this subsection provide different 
rules with respect to the matters described in 
subparagraph (A) or (B), the regulations shall 
supersede subparagraph (A) or (B), as the case 
may be. 
‘‘(d) WORKING GROUP.— 
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830 
‘‘(1) ESTABLISHMENT.—Not later than 30 days 
after the date of the enactment of this section, the 
President shall establish an interagency working 
group on carbon market oversight, which shall include 
the Administrator of the Environmental Protection 
Agency and representatives of other relevant agencies, 
to make recommendations to the President regarding 
proposed regulations for the establishment, operation, 
and oversight of markets for regulated allowance de-
rivatives. 
‘‘(2) REPORT.—Not later than 180 days after the 
date of the enactment of this section, and biennially 
thereafter, the interagency working group shall submit 
a written report to the President and Congress that 
includes its recommendations to the President regard-
ing proposed regulations for the establishment, oper-
ation, and oversight of markets for regulated allow-
ance derivatives and any recommendations to Con-
gress for statutory changes needed to ensure the estab-
lishment, operation, and oversight of transparent, 
fair, stable, and efficient markets for regulated allow-
ance derivatives. 
‘‘(e) ENFORCEMENT OF REGULATIONS.—Each Federal 
agency that promulgates under subsection (c) a regulation 
of conduct with respect to a regulated allowance derivative 
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831 
shall have the same authority to enforce compliance with 
the regulation as the Commodity Futures Trading Commis-
sion has to enforce compliance with any regulation of simi-
lar conduct with respect to a contract, agreement, or trans-
action over which the Commodity Futures Trading Com-
mission has jurisdiction, except that any enforcement by 
the Federal Energy Regulatory Commission shall be pursu-
ant to section 222 and Part III. 
‘‘(f) PROHIBITION ON PRICE OR MARKET MANIPULA-
TION, FRAUD, AND FALSE OR MISLEADING STATEMENTS 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 pros-
ecution 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; 
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832 
‘‘(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 
‘‘(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 rep-
resentations, or make or use any false writing or doc-
ument 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 promulgated 
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833 
under this section, except that, if the person is a covered 
entity, the person shall be allowed to hold sufficient regu-
lated allowances to meet its compliance obligations. 
‘‘(g) RELATION TO STATE LAW.—Nothing in this sec-
tion shall preclude, diminish or qualify any authority of 
a State or political subdivision thereof to adopt or enforce 
any unfair competition, antitrust, consumer protection, se-
curities, commodities or any other law or regulation, except 
that no such State law or regulation may relieve any person 
of any requirement otherwise applicable under this section. 
‘‘(h) MARKET REPORTS.— 
‘‘(1) COLLECTION AND ANALYSIS OF INFORMA-
TION.—The Commission, in conjunction with the Fed-
eral agency with jurisdiction over regulated allowance 
derivatives pursuant to subsection (c)(1), shall, on a 
continuous basis, collect and analyze the following in-
formation on the functioning of the markets for regu-
lated instruments established under this part: 
‘‘(A) The status of, and trends in, the mar-
kets, including prices, trading volumes, trans-
action types, and trading channels and mecha-
nisms. 
‘‘(B) Spikes, collapses, and volatility in 
prices of regulated instruments, and the causes 
therefor. 
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‘‘(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 market 
of any such fraud or manipulation (or threat of 
fraud or manipulation) that the Commission, in 
conjunction with the Federal agency, has identi-
fied, and the effectiveness of corrective measures 
undertaken by the Commission, in conjunction 
with the Federal agency, to address the fraud, 
manipulation, or threat. 
‘‘(E) The economic effects of the markets, in-
cluding to macro- and micro-economic effects of 
unexpected significant increases and decreases in 
the price of regulated instruments. 
‘‘(F) Any changes in the roles, activities, or 
strategies of various market participants. 
‘‘(G) Regional, industrial, and consumer re-
sponses to the markets, and energy investment 
responses to the markets. 
‘‘(H) Any other issue related to the markets 
that the Commission, in conjunction with the en-
tities, deems appropriate. 
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‘‘(2) ANNUAL
REPORTS
TO
THE
CONGRESS.— 
Not later than 1 month after the end of each calendar 
year, the Commission, in conjunction with the Fed-
eral agency, shall submit to the President, the Com-
mittee on Energy and Commerce of the House of Rep-
resentatives, and the Committee on Energy and Nat-
ural Resources of the Senate, and make available to 
the public, a report on the matters described in para-
graph (1) with respect to the year, including rec-
ommendations for any administrative or statutory 
measures the Commission, in conjunction with the 
Federal agency, considers necessary to address any 
threats to the transparency, fairness, or integrity of 
the markets in regulated instruments. 
‘‘SEC. 402. APPLICABILITY OF PART III PROVISIONS. 
‘‘(a) SECTIONS 301, 304, AND 306.—Sections 301, 304, 
and 306 shall not apply to this part. 
‘‘(b) SECTIONS 307, 309, AND 314.—Sections 307, 309, 
and 314 shall only apply to section 401(c) to the extent 
that the Commission is delegated authority to promulgate 
regulations for the establishment, operation, and oversight 
of markets for regulated allowance derivatives (as defined 
in section 401). If the Commission is not delegated author-
ity to promulgate regulations for the establishment, oper-
ation, and oversight of markets for regulated allowance de-
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rivatives, sections 307, 309, and 314 shall not apply to sec-
tion 401(f) in the case of regulated allowance derivatives. 
‘‘(c) SECTION 315.—In applying section 315(a) to this 
part, the words ‘‘person or entity’’ shall be substituted for 
the words ‘‘licensee or public utility’’. In applying section 
315(b) to this part, the words ‘‘an entity’’ shall be sub-
stituted for the words ‘‘a licensee or public utility’’ and the 
words ‘‘such entity’’ shall be substituted for the words ‘‘such 
licensee or public utility.’’ 
‘‘(d) SECTION 316.—Section 316(a) shall not apply to 
section 401(f).’’. 
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 paragraphs 
(14) through (22) and paragraphs (24) through (36), 
respectively; 
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(3) by inserting after paragraph (12) the fol-
lowing: 
‘‘(13) ENERGY COMMODITY.—The term ‘energy 
commodity’ means— 
‘‘(A) coal; 
‘‘(B) crude oil, gasoline, diesel fuel, jet fuel, 
heating oil, and propane; 
‘‘(C) electricity (excluding financial trans-
mission rights which are subject to regulation 
and oversight by the Federal Energy Regulatory 
Commission); 
‘‘(D) natural gas; and 
‘‘(E) any other substance (other than an ex-
cluded 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 
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territory or possession of the United States, or that is 
offered or transacted on or through a computer ter-
minal located in the United States.’’. 
(b) EXTENSION
OF
REGULATORY
AUTHORITY
TO 
SWAPS INVOLVING ENERGY TRANSACTIONS.—Section 2(g) 
of such Act (7 U.S.C. 2(g)) is amended by inserting ‘‘or 
an energy commodity’’ after ‘‘agricultural commodity’’. 
(c) ELIMINATION
OF EXEMPTION
FOR OVER-THE- 
COUNTER SWAPS INVOLVING ENERGY COMMODITIES.—Sec-
tion 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is amended by 
inserting ‘‘(other than an energy commodity)’’ after ‘‘ex-
empt 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 amended— 
(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 AUTHORITY 
OF THE CFTC WITH RESPECT TO INCLUDED ENERGY 
TRANSACTIONS.— 
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839 
(1) IN GENERAL.—Section 4(c) of such Act (7 
U.S.C. 6(c)) is amended by adding at the end the fol-
lowing: 
‘‘(6) The Commission may not exempt any included 
energy transaction from the requirements of subsection (a), 
unless the Commission provides 60 days advance notice to 
the Congress and the Position Limit Energy Advisory 
Group and solicits public comment about the exemption re-
quest 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 without 
regard to the requirements of section 4(a) of such Act 
shall be null and void. 
(f) REQUIREMENT TO ESTABLISH UNIFORM SPECULA-
TIVE 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)’’; 
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840 
(B) by inserting after the 2nd sentence the 
following: ‘‘With respect to energy transactions, 
the Commission shall fix limits on the aggregate 
number of positions which may be held by any 
person for each month across all markets subject 
to the jurisdiction of the Commission.’’; 
(C) in the 4th sentence by inserting ‘‘, 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 convene 
a Position Limit Energy Advisory Group consisting of rep-
resentatives 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 deriva-
tives transaction execution facility upon which a con-
tract in the energy commodity for future delivery is 
traded, and each electronic trading facility that has 
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841 
a significant price discovery contract in the energy 
commodity. 
‘‘(B) Not later than 60 days after the date on which 
the advisory group is convened under subparagraph (A), 
and annually thereafter, the advisory group shall submit 
to the Commission advisory recommendations regarding the 
position limits to be established in paragraph (1). 
‘‘(C) The Commission shall have exclusive authority 
to grant exemptions for bona fide hedging transactions and 
positions from position limits imposed under this Act on 
energy transactions.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) SIGNIFICANT
PRICE
DISCOVERY
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 
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842 
(II) by striking ‘‘position limita-
tions or’’. 
(B) CONTRACTS TRADED ON OR THROUGH 
DESIGNATED
CONTRACT
MARKETS.—Section 
5(d)(5) of such Act (7 U.S.C. 7(d)(5)) is amend-
ed— 
(i) in the heading by striking ‘‘LIMITA-
TIONS 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 ‘‘LIMITA-
TIONS OR’’; and 
(ii) by striking ‘‘position limits or’’. 
(g) ELIMINATION OF THE SWAPS LOOPHOLE.—Section 
4a(c) of such Act (7 U.S.C. 6a(c)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 
(2) by adding after and below the end the 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 hedg-
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843 
ing transaction or position as a transaction or position 
that— 
‘‘(A)(i) represents a substitute for transactions 
made or to be made or positions taken or to be taken 
at a later time in a physical marketing channel; 
‘‘(ii) is economically appropriate to the 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 an-
ticipates 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 result-
ing 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, regu-
lation or order; and 
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844 
‘‘(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 significant price dis-
covery contracts not later than 120 days after the 
date of the enactment of this subsection, and issue a 
final rule within 180 days after such date of enact-
ment. 
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845 
‘‘(2) DISAGGREGATION
OF
INDEX
FUNDS
AND 
OTHER DATA IN MARKETS.—Subject to section 8 and 
beginning within 60 days of the issuance of the final 
rule required by paragraph (1), the Commission shall 
disaggregate and make public weekly— 
‘‘(A) the number of positions and total 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 LIM-
ITS.—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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846 
‘‘(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) This Act shall not be interpreted to affect the juris-
diction of the Federal Energy Regulatory Commission with 
respect to the authority of the Federal Energy Regulatory 
Commission under the Federal Power Act (16 U.S.C. 791a 
et seq.), the Natural Gas Act (15 U.S.C. 717 et seq.), or 
other law to obtain information, carry out enforcement ac-
tions, or otherwise carry out the responsibilities of the Fed-
eral Energy Regulatory Commission.’’. 
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848 
(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 Trad-
ing Commission on the effective date of this section 
pursuant to an appointment made under section 8G 
of the Inspector General Act of 1978 (5 U.S.C. 
App.)— 
(A) may continue so serving until the Presi-
dent makes an appointment under section 3(a) 
of such Act consistent with the amendments 
made by this section; and 
(B) shall, while serving under subparagraph 
(A), remain subject to the provisions of section 
8G of such Act which apply with respect to the 
Commodity Futures Trading Commission. 
SEC. 354. SETTLEMENT AND CLEARING THROUGH REG-
ISTERED DERIVATIVES CLEARING ORGANIZA-
TIONS. 
(a) IN GENERAL.— 
(1) APPLICATION
TO
EXCLUDED
DERIVATIVE 
TRANSACTIONS.— 
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849 
(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 sub-
paragraph (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 organiza-
tion 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 sub-
paragraph (B); 
(ii) by striking the period at the end of 
subparagraph (C) and inserting ‘‘; and’’; 
and 
(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 
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850 
cleared through a derivatives clearing organiza-
tion 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 sub-
paragraph (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: 
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851 
‘‘(C) except as provided in section 4(f), is 
settled and cleared through a derivatives clearing 
organization registered with the Commission.’’. 
(B) Section 2(h)(3) of such Act (7 U.S.C. 
2(h)(3)) is amended— 
(i) by striking ‘‘and’’ at the end of sub-
paragraph (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.—Section 
4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is amended by 
inserting ‘‘the agreement, contract, or transaction, ex-
cept as provided in section 4(h), will be settled and 
cleared through a derivatives clearing organization 
registered with the Commission and’’ before ‘‘the 
Commission determines’’. 
(5) CONFORMING AMENDMENT RELATING TO SIG-
NIFICANT
PRICE
DISCOVERY
CONTRACTS.—Section 
2(h)(7)(D) of such Act (7 U.S.C. 2(h)(7)(D)) is 
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852 
amended by striking the designation and heading for 
the subparagraph and all that follows through ‘‘As 
part of’’ and inserting the following: 
‘‘(D) REVIEW
OF
IMPLEMENTATION.—As 
part of’’. 
(b) ALTERNATIVES
TO CLEARING THROUGH 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, relat-
ing to an excluded commodity, that would otherwise 
be required to be settled and cleared by section 
2(d)(1)(C), 
2(d)(2)(D), 
2(g)(4), 
2(h)(1)(C), 
or 
2(h)(3)(C) of this Act, or subsection (c)(1) of this sec-
tion may be settled and cleared through an entity list-
ed in subsections (a) or (b) of section 409 of the Fed-
eral 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-
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853 
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 organiza-
tion 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 System serve as 
the primary regulator. 
‘‘(C) Before granting an exemption pursu-
ant to subparagraph (A), the Commission shall 
find that the agreement, contract, or transaction, 
or class thereof— 
‘‘(i) is highly customized as to its ma-
terial terms and conditions; 
‘‘(ii) is transacted infrequently; 
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854 
‘‘(iii) does not serve a significant 
price-discovery function in the marketplace; 
and 
‘‘(iv) is being entered into by parties 
who can demonstrate the financial integrity 
of the agreement, contract, or transaction 
and their own financial integrity, as such 
terms and standards are determined by the 
Commission. The standards may include, 
with respect to any federally regulated fi-
nancial entity for which net capital require-
ments are imposed, a net capital require-
ment associated with any agreement, con-
tract, or transaction subject to an exemp-
tion from the clearing requirement that is 
higher than the net capital requirement that 
would be associated with such a transaction 
were it cleared 
‘‘(D) Any agreement, contract, or trans-
action, or class thereof, which is exempted pursu-
ant to subparagraph (A) shall be reported to the 
Commission in a manner designated by the 
Commission, or to such other entity the Commis-
sion deems appropriate. 
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‘‘(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 Commission pur-
suant to subparagraph (D) with regard to ex-
cluded commodities or entities for which the Se-
curities Exchange Commission or the Board of 
Governors of the Federal Reserve System serve as 
the primary regulator may be provided to the 
other agencies. 
‘‘(g) SPOT AND FORWARD EXCLUSION.—The 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 shipment or de-
livery, as defined by the Commission.’’. 
(c) ADDITIONAL REQUIREMENTS APPLICABLE TO AP-
PLICANTS FOR REGISTRATION AS A DERIVATIVE CLEARING 
ORGANIZATION.—Section 5b(c)(2) of such Act (7 U.S.C. 7a- 
1(c)(2)) is amended by adding at the end the following: 
‘‘(O) DISCLOSURE OF GENERAL INFORMA-
TION.—The applicant shall disclose publicly and 
to the Commission information concerning— 
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‘‘(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, agree-
ments, 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 
section 
2(d)(1)(C), 
2(d)(2)(D), 
2(g)(4), 
2(h)(1)(C), 
2(h)(3)(C) or 4(c)(1) of this Act by the applicant 
if the Commission determines that the contracts 
perform a significant price discovery function 
for transactions in the cash market for the com-
modity underlying the contracts. 
‘‘(Q) FITNESS STANDARDS.—The applicant 
shall establish and enforce appropriate fitness 
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standards for directors, members of any discipli-
nary committee, and members of the applicant, 
and any other persons with direct access to the 
settlement or clearing activities of the applicant, 
including any parties affiliated with any of the 
persons described in this subparagraph.’’. 
(d) AMENDMENTS.— 
(1) Section 409 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 
4422) is amended by adding at the end the following: 
‘‘(c) CLEARING REQUIREMENT.—A multilateral clear-
ing organization described in subsections (a) or (b) of this 
section shall comply with requirements similar to the re-
quirements of sections 5b and 5c of the Commodity Ex-
change Act.’’. 
(2) Section 407 of the Legal Certainty for Bank 
Products Act of 2000 (7 U.S.C. 27e) is amended by 
inserting ‘‘and the settlement and clearing require-
ments of sections 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 
2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of such Act’’ after 
‘‘the clearing of covered swap agreements’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect 150 days after the date of the enact-
ment of this Act. 
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(f) TRANSITION RULE.—Any agreement, contract, or 
transaction entered into before the date of the enactment 
of this Act or within 150 days after such date of enactment, 
in reliance on subsection (d), (g), (h)(1), or (h)(3) of section 
2 of the Commodity Exchange Act or any other exemption 
issued by the Commission Futures Trading Commission by 
rule, regulation, or order shall, within 90 days after such 
date of enactment, unless settled and cleared through an en-
tity registered with the Commission as a derivatives clear-
ing organization or another clearing entity pursuant to sec-
tion 4(f) of such Act, be reported to the Commission in a 
manner designated by the Commission, or to such other en-
tity as the Commission deems appropriate. 
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 per-
son to enter into a credit default swap unless the person— 
‘‘(1) owns a credit instrument which is insured 
by the credit default swap; 
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‘‘(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 min-
imum capital adequacy standards as may be estab-
lished by or under the law of any State in which the 
swap is originated or entered into, or in which pos-
session of the contract involved takes place.’’. 
(b) 
ELIMINATION
OF
PREEMPTION
OF
STATE 
BUCKETING LAWS REGARDING NAKED CREDIT DEFAULT 
SWAPS.—Section 12(e)(2)(B) of such Act (7 U.S.C. 
16(e)(2)(B)) is amended by inserting ‘‘(other than a credit 
default swap in which the purchaser of the swap would not 
experience financial loss if an event that is the subject of 
the swap occurred)’’ before ‘‘that is excluded’’. 
(c) DEFINITION OF CREDIT DEFAULT SWAP.—Section 
1a of such Act (7 U.S.C. 1a), as amended by section 351(a) 
of this Act, is amended by adding at the end the following: 
‘‘(37) CREDIT DEFAULT SWAP.—The term ‘credit 
default swap’ means a contract which insures a party 
to the contract against the risk that an entity may 
experience a loss of value as a result of an event spec-
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ified in the contract, such as a default or credit down-
grade. A credit default swap that is traded on or 
cleared by a registered entity shall be excluded from 
the definition of a security as defined in this Act and 
in section 2(a)(1) of the Securities Act of 1933 or sec-
tion 3(a)(10) of the Securities Exchange Act of 1934, 
except it shall be deemed a security solely for purpose 
of enforcing prohibitions against insider trading in 
sections 10 and 16 of the Securities Exchange Act of 
1934.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall be effective for credit default swaps (as defined 
in section 1a(37) of the Commodity Exchange Act) entered 
into after 60 days after the date of the enactment of this 
section. 
SEC. 356. TRANSACTION FEES. 
(a) IN GENERAL.—Section 12 of the Commodity Ex-
change Act (7 U.S.C. 16) is amended by redesignating sub-
sections (e), (f), and (g) as subsections (f), (g), and (h), re-
spectively, and inserting after subsection (d) the following: 
‘‘(e) CLEARING FEES.— 
‘‘(1) IN
GENERAL.—The Commission shall, in 
accordance with this subsection, charge and collect 
from each registered clearing organization, and each 
such organization shall pay to the Commission, trans-
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action fees at a rate calculated to recover the costs to 
the Federal Government of the supervision and regu-
lation of futures markets, except those directly related 
to enforcement. 
‘‘(2) FEES
ASSESSED
PER
SIDE
OF
CLEARED 
CONTRACTS.— 
‘‘(A) IN GENERAL.—The Commission shall 
determine the fee rate referred to in paragraph 
(1), and shall apply the fee rate per side of any 
transaction cleared. 
‘‘(B) AUTHORITY
TO
DELEGATE.— The 
Commission may determine the procedures by 
which the fee rate is to be applied on the trans-
actions subject to the fee, or delegate the author-
ity to make the determination to any appro-
priate derivatives clearing organization. 
‘‘(3) EXEMPTIONS.—The Commission may not 
impose a fee under paragraph (1) on— 
‘‘(A) a class of contracts or transactions if 
the Commission finds that it is in the public in-
terest to exempt the class from the fee; or 
‘‘(B) a contract or transaction cleared by a 
registered derivatives clearing organization that 
is— 
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‘‘(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 preceding 
September 1 and on or before the preceding De-
cember 31; and 
‘‘(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 estimated 
aggregate number of cleared sides of transactions 
for the fiscal year, is reasonably likely to produce 
aggregate fee receipts under this subsection for 
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the fiscal year equal to the target offsetting re-
ceipt 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 num-
ber of cleared sides of transactions to be 
cleared by registered derivatives clearing or-
ganizations during the fiscal year, as esti-
mated by the Commission, after consulta-
tion with the Office of Management and 
Budget, using the methodology required for 
making projections pursuant to section 257 
of the Balanced Budget and Emergency Def-
icit 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 budg-
et authority for all non-enforcement activi-
ties of the Commission, as contained in the 
regular appropriations Acts for the fiscal 
year. 
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‘‘(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 PROCEDURAL 
RULES.—Section 553 of title 5, United States Code, 
shall not apply with respect to any exercise of author-
ity under this subsection. 
‘‘(8) ESTABLISHMENT OF FUTURES AND OPTIONS 
TRANSACTION
FEE
ACCOUNT; DEPOSIT
OF
FEES.— 
There is established in the Treasury of the United 
States an account which shall be known as the ‘Fu-
tures 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 expend-
itures of the Commission.’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to fiscal years beginning 30 or more 
days after the date of the enactment of this Act. 
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(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 Com-
modity Exchange Act shall be applied, in the case of the 
1st fiscal year beginning after the date of the enactment 
of this Act, by substituting ‘‘August 31’’ for ‘‘April 30’’. 
SEC. 357. NO EFFECT ON AUTHORITY OF THE FEDERAL 
TRADE COMMISSION. 
Nothing in this subtitle shall be interpreted to affect 
or diminish the jurisdiction or authority of the Federal 
Trade Commission with respect to its authorities under the 
Federal Trade Commission Act (15 U.S.C. 41 et seq.) or 
the Energy Independence and Security Act of 2007 (Public 
Law 110–140) to obtain information, to carry out enforce-
ment activities or otherwise carry out the responsibilities 
of the Federal Trade Commission. 
SEC. 358. REGULATION OF CARBON DERIVATIVES MARKETS. 
(a) DEFAULT RULE.—Section 2 of the Commodity Ex-
change 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 reg-
ulated 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 
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866 
of the markets in accordance with the same regulations that 
apply under this Act to included energy transactions.’’. 
(b) PRESIDENTIAL DETERMINATIONS.—To the extent 
that the President delegates the authority to promulgate reg-
ulations for the establishment, operation, and oversight of 
all markets for regulated allowance derivatives to a Federal 
agency other than the Commodity Futures Trading Com-
mission pursuant to section 401 of the Federal Power Act, 
such determination shall supersede subsection (a). To the 
extent that the President determines that regulations pro-
mulgated pursuant to section 401(c)(2) of the Federal 
Power Act would provide for more stringent and effective 
market oversight, such regulations shall supersede sub-
section (a). Nothing in this section shall be construed to 
affect the operation of the default rules established in section 
401(c)(4) of the Federal Power Act. 
SEC. 359. CEASE-AND-DESIST AUTHORITY. 
(a) NATURAL GAS ACT.—Section 20 of the Natural 
Gas Act (15 U.S.C. 717s) is amended by adding the fol-
lowing at the end: 
‘‘(e) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY 
ORDERS; AUTHORITY OF THE COMMISSION.— 
‘‘(1) IN
GENERAL.—If the Commission finds, 
after notice and opportunity for hearing, that any en-
tity may be violating, may have violated, or may be 
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about to violate any provision of this Act, or any 
rule, regulation, restriction, condition, or order made 
or imposed by the Commission under the authority of 
this Act, the Commission may publish its findings 
and issue an order requiring such entity, and any 
other entity that is, was, or would be a cause of the 
violation, due to an act or omission the entity knew 
or should have known would contribute to such viola-
tion, to cease and desist from committing or causing 
such violation and any future violation of the same 
provision, rule, or regulation. Such order may, in ad-
dition to requiring an entity to cease and desist from 
committing or causing a violation, require such enti-
ty to comply, to provide an accounting and 
disgorgement, or to take steps to effect compliance, 
with such provision, rule, or regulation, upon such 
terms and conditions and within such time as the 
Commission may specify in such order. Any such 
order may, as the Commission deems appropriate, re-
quire future compliance or steps to effect future com-
pliance, either permanently or for such period of time 
as the Commission may specify. 
‘‘(2) TIMING OF ENTRY.—An order issued under 
this subsection shall be entered only after notice and 
opportunity for a hearing, unless the Commission de-
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termines that notice and hearing prior to entry would 
be impracticable or contrary to the public interest. 
‘‘(f) HEARING.—The notice instituting proceedings 
pursuant to subsection (e) shall fix a hearing date not ear-
lier than 30 days nor later than 60 days after service of 
the notice unless an earlier or a later date is set by the 
Commission with the consent of any respondent so served. 
‘‘(g) TEMPORARY ORDER.—Whenever the Commission 
determines that-— 
‘‘(1) a respondent may take actions to dissipate 
or convert assets prior to the completion of the pro-
ceedings referred to in subsection (e), and such assets 
would be necessary to comply with or otherwise sat-
isfy a final enforcement order of the Commission pur-
suant to alleged violations or threatened violations 
specified in the notice instituting proceedings; or 
‘‘(2) a respondent is engaged in actual or threat-
ened violations of this Act or a Commission rule, reg-
ulation, restriction or order referred to in subsection 
(e), 
the Commission may issue a temporary order requiring the 
respondent to take such action to prevent dissipation or 
conversion of assets, significant harm to energy consumers, 
or substantial harm to the public interest, frustration of the 
Commission’s ability to conduct the proceedings, or frustra-
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tion of the Commission’s ability to redress said violation 
at the conclusion of the proceedings, as the Commission 
deems appropriate pending completion of such proceedings. 
‘‘(h) REVIEW OF TEMPORARY ORDERS.— 
‘‘(1) COMMISSION REVIEW.—At any time after 
the respondent has been served with a temporary 
cease-and-desist order pursuant to subsection (g), the 
respondent may apply to the Commission to have the 
order set aside, limited, or suspended. If the respond-
ent has been served with a temporary cease-and-desist 
order entered without a prior Commission hearing, 
the respondent may, within 10 days after the date on 
which the order was served, request a hearing on such 
application and the Commission shall hold a hearing 
and render a decision on such application at the ear-
liest possible time. 
‘‘(2) JUDICIAL REVIEW.—Within— 
‘‘(A) 10 days after the date the respondent 
was served with a temporary cease-and-desist 
order entered with a prior Commission hearing; 
or 
‘‘(B) 10 days after the Commission renders 
a decision on an application and hearing under 
paragraph (1), 
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with respect to any temporary cease-and-desist order 
entered without a prior Commission hearing, the re-
spondent may apply to the United States district 
court for the district in which the respondent resides 
or has its principal place of business, or for the Dis-
trict of Columbia, for an order setting aside, limiting, 
or suspending the effectiveness or enforcement of the 
order, and the court shall have jurisdiction to enter 
such an order. A respondent served with a temporary 
cease-and-desist order entered without a prior Com-
mission hearing may not apply to the court except 
after hearing and decision by the Commission on the 
respondent’s application under paragraph (1) of this 
subsection. 
‘‘(3) NO
AUTOMATIC
STAY
OF
TEMPORARY 
ORDER.—The commencement of proceedings under 
paragraph (2) of this subsection shall not, unless spe-
cifically ordered by the court, operate as a stay of the 
Commission’s order. 
‘‘(4) EXCLUSIVE REVIEW.—Sections 19(d) and 
24 shall not apply to a temporary order entered pur-
suant to this section. 
‘‘(i) IMPLEMENTATION.—The Commission is author-
ized to adopt rules, regulations, and orders as it deems ap-
propriate to implement this section.’’. 
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871 
(c) NATURAL GAS POLICY ACT OF 1978.—Section 504 
of the Natural Gas Policy Act of 1978 (15 U.S.C. 3414) 
is amended by adding the following at the end: 
‘‘(d) CEASE-AND-DESIST PROCEEDINGS; TEMPORARY 
ORDERS; AUTHORITY OF THE COMMISSION.— 
‘‘(1) IN
GENERAL.—If the Commission finds, 
after notice and opportunity for hearing, that any en-
tity may be violating, may have violated, or may be 
about to violate any provision of this Act, or any 
rule, regulation, restriction, condition, or order made 
or imposed by the Commission under the authority of 
this Act, the Commission may publish its findings 
and issue an order requiring such entity, and any 
other entity that is, was, or would be a cause of the 
violation, due to an act or omission the entity knew 
or should have known would contribute to such viola-
tion, to cease and desist from committing or causing 
such violation and any future violation of the same 
provision, rule, or regulation. Such order may, in ad-
dition to requiring an entity to cease and desist from 
committing or causing a violation, require such enti-
ty to comply, to provide an accounting and 
disgorgement, or to take steps to effect compliance, 
with such provision, rule, or regulation, upon such 
terms and conditions and within such time as the 
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Commission may specify in such order. Any such 
order may, as the Commission deems appropriate, re-
quire future compliance or steps to effect future com-
pliance, either permanently or for such period of time 
as the Commission may specify. 
‘‘(2) TIMING OF ENTRY.—An order issued under 
this subsection shall be entered only after notice and 
opportunity for a hearing, unless the Commission de-
termines that notice and hearing prior to entry would 
be impracticable or contrary to the public interest. 
‘‘(3) HEARING.—The notice instituting pro-
ceedings pursuant to paragraph (1) shall fix a hear-
ing date not earlier than 30 days nor later than 60 
days after service of the notice unless an earlier or a 
later date is set by the Commission with the consent 
of any respondent so served. 
‘‘(4) TEMPORARY ORDER.—Whenever the Com-
mission determines that— 
‘‘(A) a respondent may take actions to dis-
sipate or convert assets prior to the completion 
of the proceedings referred to in paragraph (1) 
and such assets would be necessary to comply 
with or otherwise satisfy a final enforcement 
order of the Commission pursuant to alleged vio-
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lations or threatened violations specified in the 
notice instituting proceedings; or 
‘‘(B) a respondent is engaged in actual or 
threatened violations of this Act or a Commis-
sion rule, regulation, restriction or order referred 
to in paragraph (1), 
the Commission may issue a temporary order requir-
ing the respondent to take such action to prevent dis-
sipation or conversion of assets, significant harm to 
energy consumers, or substantial harm to the public 
interest, frustration of the Commission’s ability to 
conduct the proceedings, or frustration of the Commis-
sion’s ability to redress said violation at the conclu-
sion of the proceedings, as the Commission deems ap-
propriate pending completion of such proceedings. 
‘‘(5) REVIEW OF TEMPORARY ORDERS.— 
‘‘(A) COMMISSION
REVIEW.—At any time 
after the respondent has been served with a tem-
porary cease-and-desist order pursuant to para-
graph (4), the respondent may apply to the Com-
mission to have the order set aside, limited, or 
suspended. If the respondent has been served with 
a temporary cease-and-desist order entered with-
out a prior Commission hearing, the respondent 
may, within 10 days after the date on which the 
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order was served, request a hearing on such ap-
plication and the Commission shall hold a hear-
ing and render a decision on such application at 
the earliest possible time. 
‘‘(B) JUDICIAL REVIEW.—Within— 
‘‘(i) 10 days after the date the respond-
ent was served with a temporary cease-and- 
desist order entered with a prior Commis-
sion hearing; or 
‘‘(ii) 10 days after the Commission 
renders a decision on an application and 
hearing under subparagraph (A), with re-
spect to any temporary cease-and-desist 
order entered without a prior Commission 
hearing, the respondent may apply to the 
United States district court for the district 
in which the respondent resides or has its 
principal place of business, or for the Dis-
trict of Columbia, for an order setting aside, 
limiting, or suspending the effectiveness or 
enforcement of the order, and the court shall 
have jurisdiction to enter such an order. A 
respondent served with a temporary cease- 
and-desist order entered without a prior 
Commission hearing may not apply to the 
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court except after hearing and decision by 
the Commission on the respondent’s appli-
cation under paragraph (1) of this sub-
section. 
‘‘(C) NO AUTOMATIC STAY OF TEMPORARY 
ORDER.—The 
commencement 
of 
proceedings 
under subparagraph (B) of this paragraph shall 
not, unless specifically ordered by the court, op-
erate as a stay of the Commission’s order. 
‘‘(6) IMPLEMENTATION.—The Commission is au-
thorized to adopt rules, regulations, and orders as it 
deems appropriate to implement this subsection.’’. 
TITLE IV—TRANSITIONING TO A 
CLEAN ENERGY ECONOMY 
Subtitle A—Ensuring Real 
Reductions in Industrial Emissions 
SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL 
EMISSIONS. 
Title VII of the Clean Air Act is amended by inserting 
after part E the following new part: 
‘‘PART F—ENSURING REAL REDUCTIONS IN 
INDUSTRIAL EMISSIONS 
‘‘SEC. 761. PURPOSES. 
‘‘(a) PURPOSE OF PART.—The purposes of this part 
are— 
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‘‘(1) to promote a strong global effort to signifi-
cantly reduce greenhouse gas emissions, and, through 
this global effort, stabilize greenhouse gas concentra-
tions in the atmosphere at a level that will prevent 
dangerous anthropogenic interference with the climate 
system; and 
‘‘(2) to prevent an increase in greenhouse gas 
emissions in countries other than the United States as 
a result of direct and indirect compliance costs in-
curred under this title. 
‘‘(b) PURPOSES OF SUBPART 1.—The purposes of sub-
part 1 are additionally— 
‘‘(1) to rebate the owners and operators of enti-
ties in domestic eligible industrial sectors for their 
greenhouse gas emission costs incurred under this 
title, but not for costs associated with other related or 
unrelated market dynamics; 
‘‘(2) to design such rebates in a way that will 
prevent carbon leakage while also rewarding innova-
tion and facility-level investments in energy efficiency 
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. 
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‘‘SEC. 762. INTERNATIONAL NEGOTIATIONS. 
‘‘(a) FINDING.—Congress finds that the purposes of 
this part, as set forth in section 761, can be most effectively 
addressed and achieved through agreements negotiated be-
tween the United States and foreign countries. 
‘‘(b) STATEMENT OF POLICY.—It is the policy of the 
United States to work proactively under the United Nations 
Framework Convention on Climate Change, and in other 
appropriate forums, to establish binding agreements, in-
cluding sectoral agreements, committing all major green-
house gas-emitting nations to contribute equitably to the re-
duction 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 leak-
age’ means any substantial increase (as determined 
by the Administrator) in greenhouse gas emissions by 
industrial entities located in other countries if such 
increase is caused by an incremental cost of produc-
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tion increase in the United States resulting from the 
implementation of this title. 
‘‘(2) ELIGIBLE INDUSTRIAL SECTOR.—The term 
‘eligible industrial sector’ means an industrial sector 
determined by the Administrator under section 764(b) 
to be eligible to receive emission allowance rebates 
under subpart 1. 
‘‘(3) INDUSTRIAL SECTOR.—The term ‘industrial 
sector’ means any sector that is in the manufacturing 
sector (as defined in NAICS codes 31, 32, and 33). 
‘‘(4) NAICS.—The term ‘NAICS’ means the 
North American Industrial Classification System of 
2002. 
‘‘(5) OUTPUT.—The term ‘output’ means the 
total tonnage or other standard unit of production (as 
determined by the Administrator) produced by an en-
tity 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 (in-
cluding flat, container, and specialty glass and 
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fiberglass), pulp, paper, chemicals, or industrial 
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 IN-
TENSITY.—As determined by the Adminis-
trator, 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 divid-
ing— 
‘‘(aa) the number 20 multi-
plied by the number of tons of 
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carbon dioxide equivalent green-
house gas emissions (including di-
rect emissions from fuel combus-
tion, process emissions, and indi-
rect emissions from the generation 
of electricity used to produce the 
output of the sector) of the sector 
based on data described in sub-
paragraph (E); 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 sector 
by the value of the shipments plus the value 
of imports of such sector, based on data de-
scribed in subparagraph (E). 
‘‘(iii) VERY HIGH ENERGY OR GREEN-
HOUSE GAS INTENSITY.—As determined by 
the Administrator, the industrial sector had 
an energy or greenhouse gas intensity, as 
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calculated under clause (i)(I) or (II), of at 
least 20 percent. 
‘‘(B) IRON AND STEEL SECTOR.—For pur-
poses of this subpart, in carrying out this section 
and section 765, the Administrator shall consider 
as in different industrial sectors— 
‘‘(i) entities using integrated iron and 
steelmaking technologies (including coke 
ovens, blast furnaces, and other iron-making 
technologies); and 
‘‘(ii) entities using electric arc furnace 
technologies. 
‘‘(C) METAL AND PHOSPHATE PRODUCTION 
CLASSIFIED
UNDER
MORE
THAN
ONE
NAICS 
CODE.—For purposes of this subpart, in car-
rying out this section and section 765, the Ad-
ministrator shall— 
‘‘(i) 
aggregate 
data 
for 
the 
beneficiation or other processing of iron and 
copper ores and phosphate with subsequent 
steps in the process of metal and phosphate 
manufacturing regardless of the NAICS 
code under which such activity is classified; 
and 
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‘‘(ii) aggregate data for the manufac-
turing of steel with the manufacturing of 
steel pipe and tube made from purchased 
steel in a nonintegrated process. 
‘‘(D) EXCLUSION.—The petroleum refining 
sector shall not be an eligible industrial sector. 
‘‘(E) DATA SOURCES.— 
‘‘(i) ELECTRICITY
AND
FUEL
COSTS, 
VALUE OF SHIPMENTS.—The Administrator 
shall determine electricity and fuel costs 
and the value of shipments under this sub-
section from data from the United States 
Census of Mineral Industries and the 
United States Census Annual Survey of 
Manufacturers. The Administrator shall 
take the average of data from as many of 
the years of 2004, 2005, and 2006 for which 
such data are available. If such data are 
unavailable, the Administrator shall make a 
determination based upon 2002 or 2006 
data from the most detailed industrial clas-
sification level of Energy Information Agen-
cy’s Manufacturing Energy Consumption 
Survey (using 2006 data if it is available) 
and the 2002 or 2007 Economic Census of 
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the United States (using 2007 data if it is 
available). If data from the Manufacturing 
Energy Consumption Survey are unavail-
able for any sector at the six-digit classi-
fication level in the NAICS, then the Ad-
ministrator may extrapolate the informa-
tion necessary to determine the eligibility of 
a sector under this paragraph from avail-
able Manufacturing Energy Consumption 
Survey data pertaining to a broader indus-
trial category classified in the NAICS. Fuel 
cost data shall not include the cost of fuel 
used as feedstock by an industrial sector. 
‘‘(ii) IMPORTS
AND
EXPORTS.—The 
Administrator shall base the value of im-
ports and exports under this subsection on 
United States International Trade Commis-
sion 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-
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885 
sity percentages under subparagraph (A) to 
the nearest whole number. 
‘‘(iv) GREENHOUSE
GAS
EMISSION 
CALCULATIONS.—When calculating the tons 
of carbon dioxide equivalent greenhouse gas 
emissions for each sector under subpara-
graph (A)(i)(II)(aa), the Administrator— 
‘‘(I) shall use the best available 
data from as many of the years 2004, 
2005, and 2006 for which such data is 
available; and 
‘‘(II) may, to the extent necessary 
with respect to a sector, use economic 
and engineering models and the best 
available information on technology 
performance levels for such sector. 
‘‘(3) ADMINISTRATIVE DETERMINATION OF ADDI-
TIONAL ELIGIBLE INDUSTRIAL SECTORS.— 
‘‘(A) INDIVIDUAL SHOWING PETITION.— 
‘‘(i) PETITION.—The owner or operator 
of an entity in an industrial sector may pe-
tition the Administrator to designate as eli-
gible industrial sectors under this subpart 
an entity or a group of entities that— 
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‘‘(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-
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 Adminis-
trator 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 enti-
ties exist, and data specified in paragraph 
(2)(E). 
‘‘(iii) BASIS
OF
SUBSECTOR
DETER-
MINATION.—The Administrator shall deter-
mine an entity or group of entities to be a 
subsector of a six-digit section of the NAICS 
code based only upon the products manufac-
tured and not the industrial process by 
which the products are manufactured, ex-
cept that the Administrator may determine 
an entity or group of entities that manufac-
ture a product from a virgin material to be 
a separate subsector from another entity or 
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group of entities that manufacture the same 
product from recycled material. 
‘‘(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 described 
in paragraph (2)(E), rather than the data from 
the years specified in paragraph (2)(E), to deter-
mine the trade intensity of such sector or sub-
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sector, but only for determining such trade inten-
sity. 
‘‘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 preceding 
calendar year. The Administrator shall make such 
annual distributions to the owners and operators of 
each entity in an eligible industrial sector in the 
amount of emission allowances calculated under sub-
section (b), except that— 
‘‘(A) for vintage years 2012 and 2013, the 
distribution for a covered entity shall be the enti-
ty’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 Presi-
dent has modified the percentage stated in paragraph 
(1)(B) under section 767(c)(3)(A), and the President 
subsequently makes a determination under section 
767(b) for an eligible industrial sector that more than 
70 percent of global output for that sector is produced 
or manufactured in countries that have met at least 
one of the criteria in that subsection, then the reduc-
tion schedule set forth in paragraph (1)(B) of this 
subsection shall begin in the next vintage year, with 
the percentage reduction based on the amount of the 
distribution of emission allowances under this section 
in the previous year. 
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‘‘(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 sec-
tion 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 distrib-
uted for the year in which the petition for eligibility 
was granted under section 764(b)(3)(A). 
‘‘(b) CALCULATION OF DIRECT AND INDIRECT CARBON 
FACTORS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) COVERED ENTITIES.—Except as pro-
vided in subsection (a), for covered entities that 
are in eligible industrial sectors, the amount of 
emission allowance rebates shall be based on the 
sum of the covered entity’s direct and indirect 
carbon factors. 
‘‘(B) OTHER ELIGIBLE ENTITIES.—For en-
tities that are in eligible industrial sectors but 
are not covered entities, the amount of emission 
allowance rebates shall be based on the entity’s 
indirect carbon factor. 
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‘‘(B) the most recent calculation of the aver-
age direct greenhouse gas emissions (expressed in 
tons of carbon dioxide equivalent) per unit of 
output for all covered entities in the sector, as 
determined by the Administrator under para-
graph (4). 
‘‘(3) INDIRECT CARBON FACTOR.— 
‘‘(A) IN
GENERAL.—The indirect carbon 
factor for an entity for a vintage year is the 
product obtained by multiplying the average out-
put of the entity for the two years preceding the 
years of the distribution by both the electricity 
emissions intensity factor determined pursuant 
to subparagraph (B) and the electricity effi-
ciency factor determined pursuant to subpara-
graph (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 des-
ignated as an eligible industrial sector under sec-
tion 764(b) shall provide the owner or operator 
of the entity and the Administrator, on an an-
nual basis, the electricity emissions intensity fac-
tor for the entity. The electricity emissions inten-
sity factor for the entity, expressed in tons of 
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carbon dioxide equivalents per kilowatt hour, is 
determined by dividing— 
‘‘(i) the annual sum of the hourly 
product of— 
‘‘(I) the electricity purchased by 
the entity from that person in each 
hour (expressed in kilowatt hours), 
multiplied by 
‘‘(II) the marginal or weighted 
average tons of carbon dioxide equiva-
lent per kilowatt hour that the person 
selling the electricity charges to the en-
tity, taking into account the entity’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 based 
on the best available data, including data pro-
vided under paragraph (6). 
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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(a), the Administrator shall adjust the 
indirect carbon factor to avoid rebates to the eli-
gible entity for costs that the Administrator de-
termines were not incurred by the industrial en-
tity because the allowances were freely allocated 
to the eligible entity’s electricity provider and 
used for the benefit of industrial consumers. 
‘‘(4) GREENHOUSE
GAS
INTENSITY
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 sector 
every four years using an average of the two most re-
cent years of the best available data. 
‘‘(5) ENSURING
EFFICIENCY
IMPROVEMENTS.— 
When making greenhouse gas calculations, the Admin-
istrator shall— 
‘‘(A) limit the average direct greenhouse gas 
emissions per unit of output, calculated under 
paragraph (4), for any eligible industrial sector 
to an amount that is not greater than it was in 
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any previous calculation under this subsection; 
and 
‘‘(B) limit the electricity emissions intensity 
factor, calculated under paragraph (3)(B) and 
resulting from a change in electricity supply, for 
any entity to an amount that is not greater than 
it was during any previous year. 
‘‘(6) DATA SOURCES.—For the purposes of this 
subsection— 
‘‘(A) the Administrator shall use data from 
the greenhouse gas registry, established under 
section 713, where it is available; and 
‘‘(B) each owner or operator of an entity in 
an eligible industrial sector and each 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 in-
direct 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-
ant to this section than are allocated for use under this part 
pursuant to section 782 for that vintage year. For any vin-
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tage year for which the total emission allowance rebates cal-
culated pursuant to this section exceed the number of allow-
ances allocated pursuant to section 782, the Administrator 
shall reduce each entity’s distribution on a pro rata basis 
so that the total distribution under this section equals the 
number of allowances allocated under section 782. 
‘‘Subpart 2—International Reserve Allowance 
Program 
‘‘SEC. 766. INTERNATIONAL RESERVE ALLOWANCE PRO-
GRAM. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.—If the President takes an ac-
tion described in section 767(c)(3)(B) with respect to 
a sector then, not later than 24 months after that de-
termination, 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 
of a primary product produced or manufactured 
by that sector; 
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‘‘(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 inter-
national agreements to which the United States is a 
party, the competitive imbalance in the costs of pro-
ducing or manufacturing primary products in indus-
trial sectors resulting from the difference between— 
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‘‘(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 tar-
iffs, or other measures adopted or imposed to re-
duce greenhouse gas emissions. 
‘‘(3) EMISSION ALLOWANCE REBATES.—The Ad-
ministrator shall take into account the value of emis-
sion 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 DETERMINATIONS. 
‘‘(a) REPORT.—Not later than January 1, 2018, the 
President shall submit a report to Congress on the effective-
ness of the distribution of emission allowance rebates under 
subpart 1 in mitigating carbon leakage in industrial sec-
tors. Such report shall also include— 
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‘‘(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 compli-
ance 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 Presi-
dent, in consultation with the Administrator and other ap-
propriate agencies, shall determine, for each eligible indus-
trial 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 emis-
sions reduction commitment for that country that is 
at least as stringent as that of the United States. 
‘‘(2) The country is a party to a multilateral or 
bilateral emission reduction agreement for that sector 
to which the United States is a party. 
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‘‘(3) The country has an annual energy or green-
house 
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 cal-
endar 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 impose 
an incremental increase on the cost of production as-
sociated with greenhouse gas emissions from the sector 
that is at least 60 percent of the cost of complying 
with this title in the United States for such sector, 
averaged over a two-year period. 
‘‘(c) EFFECT OF PRESIDENTIAL DETERMINATION.—If 
the President makes a determination under subsection (b) 
with respect to an eligible industrial sector that 70 percent 
or less of the global output for the sector is produced or 
manufactured in countries that have met one or more of 
the criteria in subsection (b), then the President shall, not 
later than June 30, 2022, and every four years thereafter— 
‘‘(1) assess the extent to which the emission al-
lowance rebates provided pursuant to subpart 1 have 
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901 
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), explaining the 
reasons for such determination, and identifying the actions 
taken by the President under subsection (c). 
‘‘(e) LIMITATION.—The President may only implement 
an International Reserve Allowance Program for sectors 
producing primary products. 
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‘‘(f) IRON AND STEEL SECTOR.—For the purposes of 
this subpart, the Administrator shall consider to be in the 
same industrial sector— 
‘‘(1) 
entities 
using 
integrated 
iron 
and 
steelmaking technologies (including coke ovens, blast 
furnaces, and other iron-making technologies); and 
‘‘(2) entities using electric arc furnace tech-
nologies.’’. 
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 eligi-
ble partnerships to develop programs of study (containing 
the information described in section 122(c)(1)(A) of the 
Carl D. Perkins Career and Technical Education Act of 
2006 (20 U.S.C. 2342), that are focused on emerging careers 
and jobs in renewable energy, energy efficiency, 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 solicitation 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. Perkins 
Career and Technical Education Act of 2006 (20 
U.S.C. 2351) or an area career and technical edu-
cation school or education service agency described in 
such section; 
(2) at least 1 postsecondary institution eligible 
for funding under section 132 of such Act (20 U.S.C. 
2352); and 
(3) representatives of the community including 
business, labor organizations, and industry that have 
experience in 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 Secretary 
may require. Applications shall include— 
(1) a description of the eligible partners and 
partnership, the roles and responsibilities of each 
partner, and a demonstration of each partner’s 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 market 
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 Ca-
reer and Technical Education Act of 2006 (20 U.S.C. 
2302(20)); and 
(10) a description of how the applicant proposes 
to consult or has consulted with a labor organization, 
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labor management partnership, apprenticeship pro-
gram, or joint apprenticeship and training program 
that provides education and training in the field of 
study for which the applicant proposes to develop a 
curriculum. 
(d) PRIORITY.—The Secretary shall give priority to 
applications that— 
(1) use online learning or other innovative 
means to deliver the program of study to students, 
educators, and instructors outside of the partnership; 
and 
(2) focus on low performing students and special 
populations as defined in section 3(29) of the Carl D. 
Perkins Career and Technical Education Act of 2006 
(20 U.S.C. 2302(29)). 
(e) PEER REVIEW.—The Secretary shall convene a 
peer review process to review applications for grants under 
this section and to make recommendations regarding the se-
lection of grantees. Members of the peer review committee 
shall include— 
(1) educators who have experience implementing 
curricula with comparable purposes; and 
(2) business and industry experts in clean en-
ergy-related fields. 
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(f) USES OF FUNDS.—Grants awarded under this sec-
tion 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 career areas 
related to clean energy, renewable energy, energy 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 DE-
TERMINATIONS. 
(a) PETITIONS.— 
(1) FILING.—A petition for certification of eligi-
bility 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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907 
(C) Employers of such workers, one-stop op-
erators or one-stop partners (as defined in sec-
tion 101 of the Workforce Investment Act of 1998 
(29 U.S.C. 2801)), including State employment 
security agencies, or the State dislocated worker 
unit established under title I of such Act, on be-
half of such workers. 
The petition shall be filed simultaneously with the 
Secretary of Labor and with the Governor of the State 
in which such workers’ employment site is located. 
(2) ACTION BY GOVERNORS.—Upon receipt of a 
petition filed under paragraph (1), the Governor 
shall— 
(A) ensure that rapid response activities 
and appropriate core and intensive services (as 
described in section 134 of the Workforce Invest-
ment Act of 1998 (29 U.S.C. 2864)) authorized 
under other Federal laws are made available to 
the workers covered by the petition to the extent 
authorized under such laws; and 
(B) assist the Secretary in the review of the 
petition by verifying such information and pro-
viding 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 Sec-
retary shall provide for a public hearing and afford 
such interested persons an opportunity to be present, 
to produce evidence, and to be heard. 
(b) ELIGIBILITY.— 
(1) IN GENERAL.—A group of workers shall be 
certified by the Secretary as eligible to apply for ad-
justment assistance under this part pursuant to a pe-
tition 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 adversely 
affected by any requirement of title VII of 
the Clean Air Act; 
(B) the Secretary determines that a signifi-
cant 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 closing 
of a facility or layoff of employees at a fa-
cility that mines, produces, processes, or 
utilizes fossil fuels to generate electricity; 
(ii) a substantial increase in the cost of 
energy required for a manufacturing facil-
ity to produce items whose prices are com-
petitive in the marketplace, to the extent the 
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910 
cost is not offset by allowance allocation to 
the facility pursuant to title VII of the 
Clean Air Act; or 
(iii) other documented occurrences that 
the Secretary determines are indicators of 
an adverse impact on an industry described 
in subparagraph (A) as a result of any re-
quirement 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 ad-
justment 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 employ-
ment, or are threatened to become totally or partially 
separated as a result of any requirement of title VII 
of the Clean Air Act. 
(3) ADVERSELY AFFECTED SERVICE WORKERS.— 
A group of workers shall be certified as eligible to 
apply for climate change adjustment assistance pur-
suant to a petition filed if the Secretary determines 
that— 
(A) a significant number or proportion of 
the service workers at an employment site where 
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911 
a group of workers has been certified by the Sec-
retary as eligible to apply for adjustment assist-
ance under this part pursuant to paragraph (1) 
have become totally or partially separated from 
employment, or are threatened to become totally 
or partially separated; and 
(B) a loss of business in the firm providing 
service workers to an employment site is directly 
attributable to one or more of the documented oc-
currences listed in paragraph (1)(C). 
(c) AUTHORITY TO INVESTIGATE AND COLLECT INFOR-
MATION.— 
(1) IN GENERAL.—The Secretary shall, in deter-
mining whether to certify a group of workers under 
subsection (d), obtain information the Secretary de-
termines to be necessary to make the certification, 
through questionnaires and in such other manner as 
the Secretary determines appropriate from— 
(A) the workers’ employer; 
(B) officials of certified or recognized 
unions or other duly authorized representatives 
of the group of workers; or 
(C) one-stop operators or one-stop partners 
(as defined in section 101 of the Workforce In-
vestment Act of 1998 (29 U.S.C. 2801)); or 
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912 
(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 con-
siders to be confidential business information unless 
the employer submitting the confidential business in-
formation had notice, at the time of submission, that 
the information would be released by the Secretary, or 
the employer subsequently consents to the release of 
the information. Nothing in this paragraph shall be 
construed to prohibit the Secretary from providing 
such confidential business information to a court in 
camera or to another party under a protective order 
issued by a court. 
(d) DETERMINATION BY THE SECRETARY OF LABOR.— 
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913 
(1) IN GENERAL.—As soon as possible after the 
date on which a petition is filed under subsection (a), 
but in any event not later than 40 days after that 
date, the Secretary, in consultation with the Secretary 
of Energy and the Administrator, as necessary, shall 
determine whether the petitioning group meets the re-
quirements of subsection (b) and shall issue a certifi-
cation of eligibility to apply for assistance under this 
part covering workers in any group which meets such 
requirements. Each certification shall specify the date 
on which the total or partial separation began or 
threatened to begin. Upon reaching a determination 
on a petition, the Secretary shall promptly publish a 
summary of the determination in the Federal Register 
and on the website of the Department of Labor, to-
gether with the Secretary’s reasons for making such 
determination. 
(2) ONE
YEAR
LIMITATION.—A certification 
under this section shall not apply to any worker 
whose last total or partial separation from the 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. 
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914 
(3) REVOCATION OF CERTIFICATION.—Whenever 
the Secretary determines, with respect to any certifi-
cation of eligibility of the workers of an employment 
site, that total or partial separations from such site 
are no longer a result of the factors specified in sub-
section (b)(1), the Secretary shall terminate such cer-
tification and promptly have notice of such termi-
nation published in the Federal Register and on the 
website of the Department of Labor, together with the 
Secretary’s reasons for making such determination. 
Such termination shall apply only with respect to 
total or partial separations occurring after the termi-
nation date specified by the Secretary. 
(e) INDUSTRY NOTIFICATION OF ASSISTANCE.—Upon 
receiving a notification of a determination under subsection 
(d) with respect to a domestic industry the Secretary of 
Labor shall notify the representatives of the domestic indus-
try affected by the determination, employers publicly iden-
tified by name during the course of the proceeding relating 
to the determination, and any certified or recognized union 
or, to the extent practicable, other duly authorized rep-
resentative of workers employed by such representatives of 
the domestic industry, of— 
(1) the adjustment allowances, training, and 
other benefits available under this part; 
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915 
(2) the manner in which to file a petition and 
apply for such benefits; and 
(3) the availability of assistance in filing such 
petitions; 
(4) notify the Governor of each State in which 
one or more employers in such industry are located 
of the Secretary’s determination and the identity of 
the employers; and 
(5) upon request, provide any assistance that is 
necessary to file a petition under subsection (a). 
(f) BENEFIT INFORMATION TO WORKERS, PROVIDERS 
OF TRAINING.— 
(1) IN GENERAL.—The Secretary shall provide 
full information to workers about the adjustment al-
lowances, training, and other benefits available under 
this part and about the petition and application pro-
cedures, and the appropriate filing dates, for such al-
lowances, training and services. The Secretary shall 
provide whatever assistance is necessary to enable 
groups of workers to prepare petitions or applications 
for program benefits. The Secretary shall make every 
effort to insure that cooperating State agencies fully 
comply with the agreements entered into under sec-
tion 426(a) and shall periodically review such com-
pliance. The Secretary shall inform the State Board 
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916 
for Vocational Education or equivalent agency, the 
one-stop operators or one-stop partners (as defined in 
section 101 of the Workforce Investment Act of 1998 
(29 U.S.C. 2801), and other public or private agen-
cies, institutions, and employers, as appropriate, of 
each certification issued under subsection (d) and of 
projections, if available, of the needs for training 
under as a result of such certification. 
(2) NOTICE BY MAIL.—The Secretary shall 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 certifi-
cation made under subsection (d)— 
(A) at the time such certification is made, 
if the worker was partially or totally separated 
from the adversely affected employment before 
such certification, or— 
(B) at the time of the total or partial 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 
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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 following 
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 
covered, on which total or partial separa-
tion began or threatened to begin in the ad-
versely 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 
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918 
(iii) before the termination date, if 
any, 
determined 
pursuant 
to 
section 
425(d)(3). 
(B) Such worker had, in the 52-week period 
ending with the week in which such total or par-
tial 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 employ-
ment computed under regulations prescribed by 
the Secretary. For the purposes of this para-
graph, 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; 
(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 
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(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— 
(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 
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(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 adversely 
affected worker under this part for the week in which 
such failure, cessation, or revocation occurred, or any 
succeeding week, until the adversely affected worker 
begins or resumes participation in a training pro-
gram approved by the Secretary under section (b)(2). 
(4) WAIVERS OF TRAINING REQUIREMENTS.—The 
Secretary may issue a written statement to an ad-
versely 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 ap-
propriate for the worker, because of 1 or more of the 
following reasons: 
(A) RECALL.—The worker has been notified 
that the worker will be recalled by the employer 
from which the separation occurred. 
(B) MARKETABLE SKILLS.— 
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(i) IN GENERAL.—The worker possesses 
marketable skills for suitable employment 
(as determined pursuant to an assessment 
of the worker, which may include the 
profiling system under section 303(j) of the 
Social Security Act (42 U.S.C. 503(j)), car-
ried out in accordance with guidelines 
issued by the Secretary) and there is a rea-
sonable expectation of employment at equiv-
alent 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 institution of 
higher education (as defined in section 102 
of the Higher Education Act of 1965 (20 
U.S.C. 1002)) or an equivalent institution, 
or the possession of an equivalent post-
graduate certification in a specialized field. 
(C) RETIREMENT.—The worker is within 2 
years of meeting all requirements for entitlement 
to either— 
(i) old-age insurance benefits under 
title II of the Social Security Act (42 
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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 subpara-
graph shall not be construed to exempt a worker 
from requirements relating to the availability for 
work, active search for work, or refusal to accept 
work under Federal or State unemployment com-
pensation laws. 
(E) ENROLLMENT UNAVAILABLE.—The first 
available enrollment date for the training of the 
worker is within 60 days after the date of the de-
termination made under this paragraph, or, if 
later, there are extenuating circumstances for the 
delay in enrollment, as determined pursuant to 
guidelines issued by the Secretary. 
(F) TRAINING
NOT
AVAILABLE.—Training 
described in subsection (b)(2) is not reasonably 
available to the worker from either governmental 
agencies or private sources (which may include 
area career and technical education schools, as 
defined in section 3 of the Carl D. Perkins Ca-
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reer and Technical Education Act of 2006 (20 
U.S.C. 2302), and employers), no training that 
is suitable for the worker is available at a rea-
sonable cost, or no training funds are available. 
(5) WEEKLY AMOUNTS.—The climate change ad-
justment allowance payable to an adversely affected 
worker for a week of unemployment shall be an 
amount equal to 70 percent of the average weekly 
wage of such worker, but in no case shall such 
amount exceed the average weekly wage for all work-
ers in the State where the adversely affected worker 
resides. 
(6) MAXIMUM DURATION OF BENEFITS.—An eli-
gible worker may receive a climate change adjustment 
allowance under this subsection for a period of not 
longer than 156 weeks. 
(b) EMPLOYMENT SERVICES AND TRAINING.— 
(1) INFORMATION
AND
EMPLOYMENT
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 cer-
tification under section 425(a) the following informa-
tion and employment services: 
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(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. 
(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 infor-
mation on how to apply for such training. 
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(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, 
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 
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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). 
(I) Information relating to the availability 
of supportive services, including services relating 
to child care, transportation, dependent care, 
housing assistance, and need-related payments 
that are necessary to enable an individual to 
participate in training. 
(2) TRAINING.— 
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(A) APPROVAL
OF
AND
PAYMENT
FOR 
TRAINING.—If the Secretary determines, with re-
spect 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 and 
Technical Education Act of 2006, and em-
ployers); 
(v) the worker is qualified to undertake 
and complete such training; and 
(vi) such training is suitable for the 
worker and available at a reasonable cost, 
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the Secretary shall approve such training for the 
worker. Upon such approval, the worker shall be 
entitled to have payment of the costs of such 
training (subject to the limitations imposed by 
this section) paid on the worker’s behalf by the 
Secretary directly or through a voucher system. 
(B) DISTRIBUTION.—The Secretary shall es-
tablish 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-
ment opportunities for a worker be avail-
able, or offered, immediately upon the com-
pletion of training approved under such 
subparagraph. 
(ii) If the costs of training an ad-
versely affected worker are paid by the Sec-
retary under subparagraph (A), no other 
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payment for such costs may be made under 
any other provision of Federal law. No pay-
ment may be made under subparagraph (A) 
of the costs of training an adversely affected 
worker or an adversely affected incumbent 
worker if such costs— 
(I) have already been paid under 
any other provision of Federal law; or 
(II) are reimbursable under any 
other provision of Federal law and a 
portion of such costs have already been 
paid under such other provision of 
Federal law. 
The provisions of this clause shall not apply 
to, or take into account, any funds provided 
under any other provision of Federal law 
which are used for any purpose other than 
the direct payment of the costs incurred in 
training a particular adversely affected 
worker, even if such use has the effect of in-
directly paying or reducing any portion of 
the costs involved in training the adversely 
affected worker. 
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930 
(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 approved 
by the Secretary under subsection (c); 
and 
(II) joint labor-management ap-
prenticeship programs; 
(ii) any training program provided by 
a State pursuant to title I of the Workforce 
Investment Act of 1998; 
(iii) any training program approved 
by a private industry council established 
under section 102 of such Act; 
(iv) any programs in career and tech-
nical education described in section 3(5) of 
the Carl D. Perkins Career and Technical 
Education Act of 2006; 
(v) any program of remedial edu-
cation; 
(vi) any program of prerequisite edu-
cation or coursework required to enroll in 
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training that may be approved under this 
paragraph; 
(vii) any training program for which 
all, or any portion, of the costs of training 
the worker are paid— 
(I) under any Federal or State 
program other than this part; or 
(II) from any source other than 
this part; 
(viii) 
any 
training 
program 
or 
coursework at an accredited institution of 
higher education (described in section 102 
of the Higher Education Act of 1965 (20 
U.S.C. 1002)), including a training pro-
gram or coursework for the purpose of— 
(I) obtaining a degree or certifi-
cation; or 
(II) completing a degree or certifi-
cation that the worker had previously 
begun at an accredited institution of 
higher education; and 
(ix) any other training program ap-
proved by the Secretary. 
(3) SUPPLEMENTAL ASSISTANCE.—The Secretary may, 
as appropriate, authorize supplemental assistance that is 
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necessary to defray reasonable transportation and subsist-
ence expenses for separate maintenance in a case in which 
training for a worker is provided in a facility that is not 
within commuting distance of the regular place of residence 
of the worker. 
(c) ON-THE-JOB TRAINING REQUIREMENTS.— 
(1) IN GENERAL.—The Secretary may approve 
on-the-job training for any adversely affected worker 
if— 
(A) the Secretary determines that on-the-job 
training— 
(i) can reasonably be expected to lead 
to suitable employment with the employer 
offering the on-the-job training; 
(ii) is compatible with the skills of the 
worker; 
(iii) includes a curriculum through 
which the worker will gain the knowledge or 
skills to become proficient in the job for 
which the worker is being trained; and 
(iv) can be measured by benchmarks 
that indicate that the worker is gaining 
such knowledge or skills; and 
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(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 worker 
under this subsection, that the skill requirements 
of the job for which the worker is being trained, 
the academic and occupational skill level of the 
worker, and the work experience of the worker 
are taken into consideration. 
(B) TERM OF CONTRACT.—Training under 
any such contract shall be limited to the period 
of time required for the worker receiving on-the- 
job training to become proficient in the job for 
which the worker is being trained, but may not 
exceed 156 weeks in any case. 
(4) EXCLUSION OF CERTAIN EMPLOYERS.—The 
Secretary shall not enter into a contract for on-the- 
job training with an employer that exhibits a pattern 
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of failing to provide workers receiving on-the-job 
training from the employer with— 
(A) continued, long-term employment as 
regular employees; and 
(B) wages, benefits, and working conditions 
that are equivalent to the wages, benefits, and 
working conditions provided to regular employ-
ees who have worked a similar period of time 
and are doing the same type of work as workers 
receiving on-the-job training from the employer. 
(d) ADMINISTRATIVE
AND EMPLOYMENT SERVICES 
FUNDING.— 
(1) ADMINISTRATIVE FUNDING.—In addition to 
any funds made available to a State to carry out this 
section for a fiscal year, the State shall receive for the 
fiscal year a payment in an amount that is equal to 
15 percent of the amount of such funds and shall— 
(A) use not more than 2⁄3 of such payment 
for the administration of the climate change ad-
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 
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(B) use not less than 1⁄3 of such payment for 
information and employment services under sub-
section (b)(1). 
(2) EMPLOYMENT SERVICES FUNDING.— 
(A) IN GENERAL.—In addition to any funds 
made available to a State to carry out subsection 
(b)(2) and the payment under paragraph (1) for 
a fiscal year, the Secretary shall provide to the 
State for the fiscal year a reasonable payment 
for the purpose of providing employment and 
services under subsection (b)(1). 
(B) VOLUNTARY
RETURN
OF
FUNDS.—A 
State that receives a payment under 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 provided 
shall be available only under the following circumstances 
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). 
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(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 ex-
penses as prescribed by the Secretary in regulations. 
Such reimbursement under this subsection may not 
exceed $1,500 for any worker. 
(f) RELOCATION ALLOWANCE AUTHORIZED.— 
(1) IN GENERAL.—Any adversely affected worker 
covered by a certification issued under section 425 
may file an application for a relocation allowance 
with the Secretary, and the Secretary may grant the 
relocation allowance, subject to the terms and condi-
tions of this subsection. 
(2) CONDITIONS FOR GRANTING ALLOWANCE.—A 
relocation allowance may be granted if all of the fol-
lowing terms and conditions are met: 
(A) ASSIST
AN
ADVERSELY
AFFECTED 
WORKER.—The relocation allowance will assist 
an adversely affected worker in relocating within 
the United States. 
(B) LOCAL EMPLOYMENT NOT AVAILABLE.— 
The Secretary determines that the worker cannot 
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937 
reasonably be expected to secure suitable employ-
ment in the commuting area in which the worker 
resides. 
(C) TOTAL SEPARATION.—The worker is to-
tally separated from employment at the time re-
location 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 ap-
plication with the Secretary at such time and in 
such manner as the Secretary shall specify by 
regulation. 
(3) AMOUNT OF ALLOWANCE.—The relocation al-
lowance granted to a worker under paragraph (1) in-
cludes— 
(A) all reasonable and necessary expenses 
(including, subsistence and transportation ex-
penses at levels not exceeding amounts prescribed 
by the Secretary in regulations) incurred in 
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transporting the worker, the worker’s family, 
and household effects; and 
(B) a lump sum equivalent to 3 times the 
worker’s average weekly wage, up to a maximum 
payment of $1,500. 
(4) LIMITATIONS.—A relocation allowance may 
not be granted to a worker unless— 
(A) the relocation occurs within 182 days 
after the filing of the application for relocation 
assistance; or 
(B) the relocation occurs within 182 days 
after the conclusion of training, if the worker en-
tered a training program approved by the Sec-
retary 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 par-
ticipating in a training program described in subsection 
(b)(2), 80 percent of the monthly premium of any health 
insurance coverage that an adversely affected worker was 
receiving from such worker’s employer prior to the separa-
tion from employment described in section 425(b), to be 
paid to any health care insurance plan designated by the 
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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 agree-
ment with any State, or with any State agency (re-
ferred 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 workers cov-
ered by a certification under section 425(d) the 
employment 
services 
described 
in 
section 
426(b)(1); 
(C) shall make any certifications required 
under section 425(d); 
(D) shall otherwise cooperate with the Sec-
retary and with other State and Federal agencies 
in providing payments and services under this 
part. 
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940 
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 agree-
ment under this section shall— 
(A) provide the Secretary with the authority 
to collect any data the Secretary determines nec-
essary 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 pro-
vide that an adversely affected worker receiving a cli-
mate change adjustment allowance under this part 
shall not be eligible for unemployment insurance oth-
erwise payable to such worker under the laws of the 
State. 
(4) REVIEW.—A determination by a cooperating 
State agency with respect to entitlement to program 
benefits under an agreement is subject to review in 
the same manner and to the same extent as deter-
minations under the applicable State law and only in 
that manner and to that extent. 
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941 
(5) COORDINATION.—Any agreement entered into 
under this section shall provide for the coordination 
of the administration of the provisions for employ-
ment services, training, and supplemental assistance 
under section 426 and under title I of the Workforce 
Investment Act of 1998 upon such terms and condi-
tions as are established by the Secretary in consulta-
tion with the States and set forth in such agreement. 
Any agency of the State jointly administering such 
provisions under such agreement shall be considered 
to be a cooperating State agency for purposes of this 
part. 
(6) RESPONSIBILITIES OF COOPERATING 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 apply-
ing for such benefits; 
(B) facilitate the early filing of petitions 
under section 425(a) for any workers that the 
agency considers are likely to be eligible for bene-
fits under this part; 
(C) advise each adversely affected worker to 
apply for training under section 426(b) before, 
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or at the same time, the worker applies for cli-
mate change adjustment allowances under sec-
tion 426(a); 
(D) perform outreach to, intake of, and ori-
entation for adversely affected workers and ad-
versely affected incumbent workers covered by a 
certification under section 426(a) with respect to 
assistance and benefits available under this part; 
(E) make employment services described in 
section 426(b)(1) available to adversely affected 
workers and adversely affected incumbent 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 avail-
able, make arrangements to make such services 
available through other Federal programs; and 
(F) provide the benefits and reemployment 
services under this part in a manner that is nec-
essary for the proper and efficient administra-
tion of this part, including the use of state agen-
cy 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-
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justment allowances and health care benefit 
replacement amounts; 
(ii) developing recommendations re-
garding payments as a bridge to retirement 
and lump sum payments to pension plans 
in accordance with this subsection; and 
(iii) the provision of reemployment 
services to eligible workers, including refer-
ral to training services. 
(7) In order to promote the coordination of work-
force investment activities in each State with activi-
ties carried out under this part, any agreement en-
tered 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-
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 meas-
ures and to effectively oversee the operation and 
administration of the climate change adjustment 
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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 subpara-
graph (A), the term ‘‘control measures’’ means 
measures that— 
(i) are internal to a system used by a 
State to collect data; and 
(ii) are designed to ensure the accuracy 
and verifiability of such data. 
(9) DATA REPORTING.— 
(A) IN GENERAL.—Any agreement entered 
into under this section shall require the cooper-
ating State or cooperating State agency to report 
to the Secretary on a quarterly basis comprehen-
sive 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 cli-
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mate 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; 
(II) the percentage of such workers 
who are employed in each of the third 
and fourth calendar quarters following 
the calendar quarter in which the 
workers cease receiving such benefits; 
and 
(III) the earnings of such workers 
in each of the third and fourth cal-
endar quarters following the calendar 
quarter in which the workers cease re-
ceiving such benefits. 
(ii) 
ADDITIONAL
INDICATORS.—The 
Secretary and a cooperating State or co-
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operating State agency may agree upon ad-
ditional indicators of performance for the 
climate change adjustment assistance pro-
gram 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. 
(10) VERIFICATION
OF
ELIGIBILITY
FOR
PRO-
GRAM BENEFITS.— 
(A) IN GENERAL.—An agreement under this 
section shall provide that the State shall periodi-
cally redetermine that a worker receiving benefits 
under this part who is not a citizen or national 
of the United States remains in a satisfactory 
immigration status. Once satisfactory immigra-
tion status has been initially verified through the 
immigration status verification system described 
in section 1137(d) of the Social Security Act (42 
U.S.C. 1320b-7(d)) for purposes of establishing a 
worker’s eligibility for unemployment compensa-
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tion, the State shall reverify the worker’s immi-
gration status if the documentation provided 
during initial verification will expire during the 
period in which that worker is potentially eligi-
ble to receive benefits under this part. The State 
shall conduct such redetermination in a timely 
manner, 
utilizing 
the 
immigration 
status 
verification system described in section 1137(d) 
of the Social Security Act (42 U.S.C. 1320b- 
7(d)). 
(B) PROCEDURES.—The Secretary shall es-
tablish procedures to ensure the uniform applica-
tion by the States of the requirements of this 
paragraph. 
(b) ADMINISTRATION ABSENT STATE AGREEMENT.— 
(1) In any State where there is no agreement in 
force between a State or its agency under subsection 
(a), the Secretary shall promulgate regulations for the 
performance of all necessary functions under section 
426, including provision for a fair hearing for any 
worker whose application for payments is denied. 
(2) A final determination under paragraph (1) 
with respect to entitlement to program benefits under 
section 426 is subject to review by the courts in the 
same manner and to the same extent as is provided 
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by section 205(g) of the Social Security Act (42 
U.S.C. 405(g)). 
(c) PROHIBITION ON CONTRACTING WITH PRIVATE 
ENTITIES.—Neither the Secretary nor a State may contract 
with any private for-profit or nonprofit entity for the ad-
ministration of the climate change adjustment assistance 
program under this part. 
(d) PAYMENT TO THE STATES.— 
(1) IN GENERAL.—The Secretary shall from time 
to time certify to the Secretary of the Treasury for 
payment to each cooperating State the sums necessary 
to enable such State as agent of the United States to 
make payments provided for by this part. 
(2) RESTRICTION.—All money paid a State 
under this subsection shall be used solely for the pur-
poses for which it is paid; and money so paid which 
is not used for such purposes shall be returned, at the 
time specified in the agreement under this section, to 
the Secretary of the Treasury. 
(3) BONDS.—Any agreement under this section 
may require any officer or employee of the State cer-
tifying payments or disbursing funds under the agree-
ment or otherwise participating in the performance of 
the agreement, to give a surety bond to the United 
States in such amount as the Secretary may deem 
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necessary, and may provide for the payment of the 
cost of such bond from funds for carrying out the pur-
poses 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 em-
ployment benefits) any employed employee. 
(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 agree-
ment shall be undertaken without the written concur-
rence of the labor organization and employer con-
cerned. 
(3) ADDITIONAL STANDARDS.—The Secretary, or 
a State acting under an agreement described in sub-
section (a) may pay the costs of on-the-job training, 
notwithstanding any other provision of this section, 
only if— 
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(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 affected 
worker is being trained is not being created in 
a promotional line that will infringe in any way 
upon the promotional opportunities of currently 
employed individuals; 
(C) such training is not for the same 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 reimbursement 
of not more than 50 percent of the wage rate of 
the participant, for the cost of providing the 
training and additional supervision related to 
the training; and 
(E) the employer has not received payment 
under with respect to any other on-the-job train-
ing provided by such employer which failed to 
meet the requirements of subparagraphs (A) 
through (D). 
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951 
(f) DEFINITIONS.—As used in this part the following 
definitions apply: 
(1) The term ‘‘adversely affected employment’’ 
means employment at an employment site, if workers 
at such site are eligible to apply for adjustment as-
sistance under this part. 
(2) The term ‘‘adversely affected worker’’ means 
an individual who has been totally or partially sepa-
rated from employment and is eligible to apply for 
adjustment assistance under this part. 
(3) The term ‘‘average weekly wage’’ means 1⁄13 
of the total wages paid to an individual in the 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 (excluding 
overtime) in the employment from which he has been 
or claims to have been separated in the 52 weeks (ex-
cluding weeks during which the individual was sick 
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952 
or on vacation) preceding the week specified 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 
(B) the equivalent to such a benefit year or 
ensuing period provided for under the applicable 
Federal unemployment insurance law. 
(6) The term ‘‘consumer goods manufacturing’’ 
means the electrical equipment, appliance, and 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 greenhouse 
gas intensity criteria in section 765(b)(2)(A)(i) of the 
Clean Air Act based on the most recent data avail-
able. 
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953 
(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. 
(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 ad-
versely 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. 
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954 
(14) The term ‘‘Secretary’’ means the Secretary 
of Labor. 
(15) The term ‘‘service workers’’ means workers 
supplying support or auxiliary services to an employ-
ment 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. 
(17) The term ‘‘State agency’’ means the agency 
of the State which administers the State law. 
(18) The term ‘‘State law’’ means the unemploy-
ment insurance law of the State approved by the Sec-
retary of Labor under section 3304 of the Internal 
Revenue Code of 1954. 
(19) The terms ‘‘total separation’’ and ‘‘totally 
separated’’ refer to the layoff or severance of an indi-
vidual from employment with an employer in which 
adversely affected employment exists. 
(20) The term ‘‘unemployment insurance’’ means 
the unemployment compensation payable to an indi-
vidual under any State law or Federal unemployment 
compensation law, including chapter 85 of title 5, 
United States Code, and the Railroad Unemployment 
Insurance Act. The terms ‘‘regular compensation’’, 
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955 
‘‘additional compensation’’, and ‘‘extended compensa-
tion’’ have the same respective meanings that are 
given them in section 205(2), (3), and (4) of the Fed-
eral-State Extended Unemployment Compensation 
Act of 1970 (26 U.S.C. 3304 note.) 
(21) The term ‘‘week’’ means a week as defined 
in the applicable State law. 
(22) The term ‘‘week of unemployment’’ means a 
week of total, part-total, or partial unemployment as 
determined under the applicable State law or Federal 
unemployment insurance law. 
(g) SPECIAL RULE WITH RESPECT
TO MILITARY 
SERVICE.— 
(1) IN
GENERAL.—Notwithstanding any other 
provision of this part, the Secretary may waive any 
requirement of this part that the Secretary determines 
is necessary to ensure that an adversely affected work-
er who is a member of a reserve component of the 
Armed Forces and serves a period of duty described 
in paragraph (2) is eligible to receive a climate 
change adjustment allowance, training, and other 
benefits under this part in the same manner and to 
the same extent as if the worker had not served the 
period of duty. 
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(2) PERIOD OF DUTY DESCRIBED.—An adversely 
affected worker serves a period of duty described in 
this paragraph if, before completing training under 
this part, the worker— 
(A) serves on active duty for a period of 
more than 30 days under a call or order to ac-
tive duty of more than 30 days; or 
(B) in the case of a member of the Army 
National Guard of the United States or Air Na-
tional Guard of the United States, performs full- 
time National Guard duty under section 502(f) 
of title 32, United States Code, for 30 consecutive 
days or more when authorized by the President 
or the Secretary of Defense for the purpose of re-
sponding to a national emergency declared by 
the President and supported by Federal funds. 
(h) FRAUD AND RECOVERY OF OVERPAYMENTS.— 
(1) RECOVERY OF PAYMENTS TO WHICH AN INDI-
VIDUAL WAS NOT ENTITLED.—If the Secretary or a 
court of competent jurisdiction determines that any 
person has received any payment under this part to 
which the individual was not entitled, such indi-
vidual shall be liable to repay such amount to the 
Secretary, as the case may be, except that the Sec-
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retary shall waive such repayment if such agency or 
the Secretary determines that— 
(A) the payment was made without fault on 
the part of such individual; and 
(B) requiring such repayment would cause 
a financial hardship for the individual (or the 
individual’s household, if applicable) when tak-
ing into consideration the income and resources 
reasonably available to the individual (or house-
hold) and other ordinary living expenses of the 
individual (or household). 
(2) MEANS OF RECOVERY.—Unless an overpay-
ment is otherwise recovered, or waived under para-
graph (1), the Secretary shall recover the overpay-
ment by deductions from any sums payable to such 
person under this part, under any Federal unemploy-
ment compensation law or other Federal law admin-
istered by the Secretary which provides for the pay-
ment of assistance or an allowance with respect to 
unemployment. Any amount recovered under this sec-
tion shall be returned to the Treasury of the United 
States. 
(3) PENALTIES FOR FRAUD.—Any person who— 
(A) makes a false statement of a material 
fact knowing it to be false, or knowingly fails to 
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958 
disclose a material fact, for the purpose of ob-
taining or increasing for that person or for any 
other person any payment authorized to be fur-
nished under this part; or 
(B) makes a false statement of a material 
fact knowing it to be false, or knowingly fails to 
disclose a material fact, when providing infor-
mation to the Secretary during an investigation 
of a petition under section 425(c), 
shall be imprisoned for not more than one year, or fined 
under title 18, United States Code, or both, and be ineligible 
for any further payments under this part. 
(i) REGULATIONS.—The Secretary shall prescribe such 
regulations as may be necessary to carry out the provisions 
of this part. 
(j) STUDY ON OLDER WORKERS.—The Secretary shall 
conduct a study examine the circumstances of older ad-
versely affected workers and the ability of such workers to 
access their retirement benefits. The Secretary shall trans-
mit a report to Congress not later than 2 years after the 
date of enactment of this part on the findings of the study 
and the Secretary’s recommendations on how to ensure that 
adversely affected workers within 2 years of retirement are 
able to access their retirement benefits. 
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959 
ƒ(k) SPENDING LIMIT.—For each fiscal year, the total 
amount of funds disbursed for the purposes described in sec-
tion 426 shall not exceed the amount deposited in that fiscal 
year into the Climate Change Worker Assistance Fund es-
tablished under section ƒ782(j)≈ of the Clean Air Act. The 
annual spending limit for any succeeding year shall be in-
creased by the difference, if any, between the amount of the 
prior year’s disbursements and the spending limitation for 
that year. The Secretary shall promulgate rules to ensure 
that this spending limit is not exceeded. Such rules shall 
provide that workers who receive any of the benefits de-
scribed in section 426 receive full benefits, and shall include 
the establishment of a waiting list for workers in the event 
that the requests for assistance exceed the spending limit.≈ 
Subtitle C—Consumer Assistance 
SEC. 431. ENERGY TAX CREDIT. 
Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by insert-
ing after section 36A the following new section: 
‘‘SEC. 36B. ENERGY TAX CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eligi-
ble individual, there shall be allowed as a credit against 
the tax imposed by this subtitle for the taxable year an 
amount equal to— 
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‘‘(1) for an eligible individual with applicable 
income of less than $6,000, the phase in rate times the 
applicable income; 
‘‘(2) for an eligible individual with applicable 
income that is greater than or equal to $6,000 and is 
less than or equal to the phase down amount, the 
maximum energy tax credit; and 
‘‘(3) for an individual with applicable income 
that exceeds the phase down amount, an amount 
equal to— 
‘‘(A) the maximum energy tax credit minus; 
or 
‘‘(B) the difference between the individual’s 
applicable income and the phase down amount 
multiplied by .2. 
‘‘(b) COORDINATION WITH ENERGY REFUND RE-
CEIVED THROUGH STATE HUMAN SERVICE AGENCIES.— 
The amount described in subsection (a) shall be reduced by 
1⁄12 for each month in which the individual or his or her 
spouse received a refund under section 432 of the American 
Clean Energy and Security Act of 2009. 
‘‘(1) The Secretary of the Treasury shall promul-
gate regulations that instruct States on how to inform 
adult individuals who receive a refund under section 
432 of the American Clean Energy and Security Act 
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of 2009 of the number of months he or she received 
a refund and how such information shall be provided 
to the Internal Revenue Service. 
‘‘(2) The Secretary of the Treasury shall estab-
lish a telephone and online system that allows an in-
dividual to inquire about the number of months she 
or he received such a refund. 
‘‘(3) In the case of an individual that does not 
report the number of months a refund was provided 
under section 432 of the American Clean Energy and 
Security Act of 2009 or recorded an incorrect number 
of months, the Secretary of the Treasury shall adjust 
the energy tax credit based on the information re-
ceived from States, provided that the Secretary of the 
Treasury has made a determination that the informa-
tion meets a sufficient standard for accuracy. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section: 
‘‘(1) ELIGIBLE INDIVIDUAL.— 
‘‘(A) IN GENERAL.—The term ‘eligible indi-
vidual’ means any individual other than— 
‘‘(i) any nonresident alien individual; 
‘‘(ii) any individual with respect to 
whom a deduction under section 151 is al-
lowable to another taxpayer for a taxable 
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year beginning in the calendar year in 
which the individual’s taxable year begins; 
and 
‘‘(iii) an estate or trust. 
‘‘(B) IDENTIFICATION
NUMBER
REQUIRE-
MENT.—Such term shall not include any indi-
vidual who— 
‘‘(i) in the case of a return that is not 
a joint return, does not include the social 
security number of the individual; and 
‘‘(ii) in the case of joint return, does 
not include the social security number of at 
least one of the taxpayers on such return. 
For purposes of the preceding sentence, the social 
security number shall not include a TIN issued 
by the Internal Revenue Service. 
‘‘(2) APPLICABLE
INCOME.—Applicable income 
means the larger of— 
‘‘(A) earned income as defined in section 
32(c)(2), except that such term shall not include 
net earnings from self-employment which are not 
taken into account in computing taxable income; 
and 
‘‘(B) adjusted gross income. 
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963 
‘‘(3) PHASE
IN
RATE.—The Secretary of the 
Treasury shall compute the phase in rates each year 
for the energy credit for joint returns and for returns 
that are not filed jointly with respect to each relevant 
number of qualifying individuals such that the phase 
in rate equals the maximum energy tax credit divided 
by $6,000. 
‘‘(4) MAXIMUM ENERGY TAX CREDIT.— 
‘‘(A) IN GENERAL.— 
‘‘(i) The maximum energy tax credit 
shall vary based on the number of individ-
uals in the tax filing unit. 
‘‘(ii) The maximum energy tax credit 
for a filing unit of a particular size shall 
be equal to the average annual reduction in 
purchasing power for low-income households 
of that household size, as calculated by the 
Environmental Protection Agency, that re-
sults from the regulation of greenhouse gas 
emissions under title VII of the Clean Air 
Act. 
‘‘(iii) The Environmental Protection 
Agency, in consultation with other appro-
priate Federal agencies, shall calculate the 
maximum energy tax credit by August 31 of 
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each year for the following calendar year 
using the most recent, reliable data avail-
able. 
‘‘(B) ENERGY TAX CREDIT CALCULATION.— 
‘‘(i) DISTRIBUTION.—For each cal-
endar year, the Environmental Protection 
Agency shall determine pursuant to sub-
paragraph (B)(iii) the aggregate reduction 
in purchasing power among all United 
States households that results from the regu-
lation of greenhouse gas emissions under 
title VII of the Clean Air Act and distribute 
that aggregate reduction in purchasing 
power among all United States households 
based on— 
‘‘(I) households’ share of total con-
sumption by all households; 
‘‘(II) the carbon intensity and 
covered-emissions intensity of house-
holds’ consumption; and 
‘‘(III) the share of households’ car-
bon and covered-emissions consump-
tion that is not financed by Federal 
benefits subject to a cost of living ad-
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justment that offsets increased carbon 
costs. 
‘‘(ii) MAXIMUM
ENERGY
TAX
CRED-
IT.—The maximum energy tax credit shall 
be equal to the arithmetic mean value of the 
amount allocated under clause (i) to house-
holds of a specified household size in the 
lowest income quintile. Tax filing units that 
include 5 or more individuals shall be eligi-
ble for the arithmetic mean value of the 
amount allocated under clause (i) to house-
holds that includes 5 or more individuals. 
‘‘(iii) AGGREGATE REDUCTION IN PUR-
CHASING POWER.—For purposes of this sec-
tion, the aggregate reduction in purchasing 
power shall be based on the projected total 
market value of the emissions allowances 
used to demonstrate compliance with title 
VII of the Clean Air Act in that year, ad-
justed to reflect costs that were not incurred 
by households as a result of allowances free-
ly allocated pursuant to section 782 of the 
Clean Air Act, as estimated by the Environ-
mental Protection Agency, and calculated 
in a way generally recognized as suitable by 
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experts in evaluating such purchasing 
power impacts. 
‘‘(iv) 
INCOME
QUINTILES.—Income 
quintiles shall be determined by ranking 
households according to income adjusted for 
household size, and shall be constructed so 
that each quintile contains an equal number 
of people. 
‘‘(5) PHASE DOWN AMOUNT.— 
‘‘(A) In the case of an eligible individual 
who has no qualifying individuals, the phase 
down amount shall be— 
‘‘(i) $20,000 in the case of an indi-
vidual who does not file a joint return; and 
‘‘(ii) $25,000 in the case of a joint re-
turn. 
‘‘(B) In the case of an eligible individual 
who files a joint return and has at least one 
qualifying individual— 
‘‘(i) If the eligible individual has one 
qualifying individual, the lowest income 
level that exceeds the phaseout amount as 
defined in section 32(b)(2) at which a mar-
ried couple with one qualifying child is in-
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967 
eligible for the earned income credit for the 
taxable year. 
‘‘(ii) If the eligible individual has two 
qualifying individuals, the lowest income 
level that exceeds the phaseout amount as 
defined in section 32(b)(2) at which a mar-
ried couple with two qualifying children is 
ineligible for the earned income credit for 
the taxable year. 
‘‘(iii) If the eligible individual claims 
three or more qualifying individuals, the 
lowest income level that exceeds the phaseout 
amount as defined in section 32(b)(2) at 
which a married couple with three or more 
qualifying children is ineligible for the 
earned income credit for the taxable year. 
‘‘(C) In the case of an eligible individual 
who does not file a joint return and has at least 
one individual qualifying individual— 
‘‘(i) If the eligible individual has one 
qualifying individual, the lowest income 
level that exceeds the phaseout amount as 
defined in section 32(b)(2) at which a single 
individual with one qualifying child is in-
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eligible for the earned income credit for the 
taxable year. 
‘‘(ii) If the eligible individual has two 
qualifying individuals, the lowest income 
level that exceeds the phaseout amount as 
defined in section 32(b)(2) at which a single 
individual with two qualifying children is 
ineligible for the earned income credit for 
the taxable year. 
‘‘(iii) If the eligible individual has 
three or more qualifying individuals, the 
lowest income level that exceeds the phaseout 
amount as defined in section 32(b)(2) at 
which a single individual with three or 
more qualifying children is ineligible for the 
earned income credit for the taxable year. 
‘‘(6) QUALIFYING INDIVIDUAL.—A qualifying in-
dividual is an individual whom the eligible indi-
vidual claims as a dependent under section 151, or as 
a qualifying child for the earned income credit under 
section 32(c)(3) or the child tax credit under section 
24, or both. The term qualifying individual does not 
include— 
‘‘(A) someone claimed as a dependent under 
section 151 if that dependent is claimed as a 
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969 
qualifying child for the earned income tax credit 
or the child tax credit on a tax form by someone 
other than the eligible individual; and 
‘‘(B) the eligible individual and, if a joint 
return, his or her spouse. 
‘‘(7) NUMBER OF PEOPLE IN THE TAX FILING 
UNIT.—The number of people in the tax filing unit 
shall equal the sum of the number of qualifying indi-
viduals plus— 
‘‘(A) in the case of a joint return, 2; and 
‘‘(B) in the case of a return that is not filed 
jointly, 1. 
‘‘(d) TREATMENT OF POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS.— 
‘‘(A) MIRROR CODE POSSESSION.—The Sec-
retary of the Treasury shall pay to each posses-
sion of the United States with a mirror code tax 
system amounts equal to the loss to that posses-
sion by reason of the amendments made by this 
section. Such amounts shall be determined by the 
Secretary of the Treasury based on information 
provided by the Government of the respective 
possession. 
‘‘(B) OTHER POSSESSIONS.—The Secretary 
of the Treasury shall pay to each possession of 
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the United States which does not have a mirror 
code tax system amounts estimated by the Sec-
retary of the Treasury as being equal to the ag-
gregate benefits that would have been provided to 
residents of such possession by reason of the 
amendments made by this section if a mirror 
code tax system had been in effect in such posses-
sion. The preceding sentence shall not apply for 
a given taxable year with respect to any posses-
sion of the United States unless such possession 
has a plan, which has been approved by the Sec-
retary of the Treasury, under which such posses-
sion will promptly distribute such payments to 
residents of such possession. 
‘‘(2) COORDINATION
WITH
CREDIT
ALLOWED 
AGAINST UNITED STATES INCOME TAXES.—No credit 
shall be allowed against United States income taxes 
for any taxable year under this section to any per-
son— 
‘‘(A) to whom a credit is allowed against 
taxes imposed by the possession by reason of the 
amendments made by this section for such tax-
able year; or 
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‘‘(B) who is eligible for a payment under a 
plan described in paragraph (1)(B) with respect 
to such taxable year. 
‘‘(e) AMOUNT OF CREDIT TO BE DETERMINED UNDER 
TABLES.—The amount of the credit allowed by this section 
shall be determined under tables prescribed by the Sec-
retary. 
‘‘(f) INFLATION ADJUSTMENTS.— In the case of any 
taxable year beginning after 2009, dollar amounts in sub-
section (c)(4)(A) shall be increased by an amount equal to 
such dollar amount, multiplied by the cost-of-living adjust-
ment determined under section 1(f)(3) of the Internal Rev-
enue Code of 1986. 
‘‘(g) TREATMENT IN OTHER PROGRAMS.—The energy 
tax credit provided under this section shall not be consid-
ered income or resources for any purpose under any Fed-
eral, State, or local laws, including, but not limited to, laws 
relating to an income tax or public assistance program (in-
cluding, but not limited to, health care, cash aid, child care, 
nutrition programs, and housing assistance), and no par-
ticipating State or political subdivision thereof shall de-
crease any assistance otherwise provided an individual or 
individuals because of the receipt of an energy tax credit 
under this Act.’’. 
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972 
SEC. 432. ENERGY REFUND PROGRAM FOR LOW-INCOME 
CONSUMERS. 
(a) ENERGY REFUND PROGRAM.— 
(1) The Administrator of the Environmental 
Protection Agency, or the agency designated by the 
Administrator shall formulate and administer the 
‘‘Energy Refund Program’’. 
(2) At the request of the State agency, eligible 
low-income households within the State shall receive 
a monthly cash energy refund equal to the estimated 
loss in purchasing power resulting from this Act. 
(b) ELIGIBILITY.— 
(1) ELIGIBLE HOUSEHOLDS.—Participation in 
the Energy Refund Program shall be limited to a 
household that— 
(A) the State agency determines to be par-
ticipating in (i) the Supplemental Nutrition As-
sistance Program authorized by the Food and 
Nutrition Act of 2008 (7 U.S.C. 2011 et seq.); 
(ii) the Food Distribution Program on Indian 
Reservations authorized by section 4(b) of such 
Act (7 U.S.C. 2013(b)); or (iii) the program for 
nutrition assistance in Puerto Rico or American 
Samoa under section 19 of the such Act (7 
U.S.C. 2028); 
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(B) has gross income that does not exceed 
150 percent of the poverty line; or 
(C) consists of a single individual or a mar-
ried couple and (i) receives the subsidy described 
in section 1860D–14 of the Social Security Act 
(42 U.S.C. 1395w–114); or (ii)(I) participates in 
the program under section XVIII of the Social 
Security Act; and (II) meets the income require-
ments described in section 1860D–14(a)(1) or 
(a)(2) of such Act (42 U.S.C. 1395w–114(a)(1) 
or (a)(2)). 
(2) STREAMLINED
ELIGIBILITY
FOR
CERTAIN 
BENEFICIARIES.—The Administrator, in consultation 
with the Secretary of Health and Human Services, 
the Commissioner of Social Security, the Railroad 
Retirement Board, the Secretary of Veterans Affairs, 
and the State agencies shall develop procedures to en-
sure that low-income beneficiaries of the benefit pro-
grams they administer receive the energy refund for 
which they are eligible. 
(3) LIMITATION.—Notwithstanding any provi-
sion of law, the Administrator shall establish proce-
dures to ensure that individuals that qualify for the 
refund under paragraph (1)(B) and that do not par-
ticipate in the Supplemental Nutrition Assistance 
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Program are United States citizens, United States 
nationals, or individuals lawfully residing in the 
United States. 
(4) NATIONAL STANDARDS.—The Administrator 
shall establish uniform national standards of eligi-
bility in accordance with the provisions of this sec-
tion. No State agency shall impose any other stand-
ard or requirement as a condition of eligibility or re-
fund receipt under the program. Assistance in the En-
ergy Refund Program shall be furnished promptly to 
all eligible households who make application for such 
participation. 
(c) MONTHLY ENERGY REFUND AMOUNT.— 
(1) MONTHLY ENERGY REFUND.—The monthly 
refund under this subsection for households of 1, 2, 3, 
4, and 5 or more members shall be equal to the max-
imum energy tax credit amount calculated under sec-
tion 36B(c)(4) of the Internal Revenue Code of 1986 
for each household size, divided by 12 and rounded to 
the nearest whole dollar amount. 
(2) MONTHLY ELIGIBILITY.—A household shall 
not be eligible for the refund under this section for 
months that the household has not established eligi-
bility under subsection (b). 
(d) DELIVERY MECHANISM.— 
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