445 
‘‘(1) FREQUENCY; FIRST
AUCTION.—Auctions 
shall be held four times per year at regular intervals, 
with the first auction to be held no later than March 
31, 2012. 
‘‘(2) AUCTION FORMAT.—Auctions shall follow 
a single-round, sealed-bid, uniform price format. 
‘‘(3) PARTICIPATION; FINANCIAL ASSURANCE.— 
Auctions shall be open to any covered entity eligible 
to purchase emission allowances under subsection 
(a)(2), except that the Administrator may establish 
financial assurance requirements to ensure that auc-
tion participants can and will perform on their bids. 
‘‘(4) DISCLOSURE
OF
BENEFICIAL
OWNER-
SHIP.—Each bidder in an auction shall be required 
to disclose the person or entity sponsoring or bene-
fitting from the bidder’s participation in the auction 
if such person or entity is, in whole or in part, other 
than the bidder. 
‘‘(5) PURCHASE LIMITS.—No person may, di-
rectly or in concert with another participant, pur-
chase more than 20 percent of the allowances of-
fered for sale at any quarterly auction. 
‘‘(6) PUBLICATION
OF
INFORMATION.—After 
the auction, the Administrator shall, in a timely 
fashion, publish the identities of winning bidders, 
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the quantity of allowances obtained by each winning 
bidder, and the auction clearing price. 
‘‘(7) OTHER
REQUIREMENTS.—The Adminis-
trator may include in the regulations such other re-
quirements or provisions as the Administrator, in 
consultation with other agencies as appropriate, con-
siders appropriate to promote effective, efficient, 
transparent, and fair administration of auctions 
under this section. 
‘‘(j) REVISION
OF REGULATIONS.—The Adminis-
trator may, at any time, in consultation with other agen-
cies as appropriate, revise the initial regulations promul-
gated under subsection (i). Such revised regulations need 
not meet the requirements identified in subsection (i) if 
the Administrator determines that an alternative auction 
design would be more effective, taking into account factors 
including costs of administration, transparency, fairness, 
and risks of collusion or manipulation. In determining 
whether and how to revise the initial regulations under 
this subsection, the Administrator shall not consider maxi-
mization of revenues to the Federal Government. 
‘‘SEC. 727. PERMITS. 
‘‘(a) PERMIT PROGRAM.—For stationary sources 
subject to title V of this Act, the provisions of this title 
shall be implemented by permits issued to covered entities 
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(and enforced) in accordance with the provisions of title 
V, as modified by this title. Any such permit issued by 
the Administrator, or by a State with an approved permit 
program, shall require a covered entity to hold a number 
of emission allowances at least equal to the total annual 
amount of carbon dioxide equivalents for its combined 
emissions and attributable greenhouse gas emissions to 
which section 722 applies. No such permit shall be issued 
that is inconsistent with the requirements of this title, and 
title V as applicable. Nothing in this section regarding 
compliance plans or in title V shall be construed as affect-
ing emission allowances. Submission of a statement by the 
owner or operator, or the designated representative of the 
owners and operators, of a covered entity that the owners 
and operators will hold emission allowances not less than 
the total amount of carbon dioxide equivalents for a year 
for its combined emissions and attributable greenhouse 
gas emissions to which section 722 applies shall be deemed 
to meet the proposed and approved planning requirements 
of title V. Recordation by the Administrator of transfers 
of emission allowances shall amend automatically all appli-
cable proposed or approved permit applications, compli-
ance plans, and permits. 
‘‘(b) MULTIPLE OWNERS.—No permit shall be issued 
under this section and no allowances or offset credits shall 
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be disbursed under this title to a covered entity or any 
other person until the designated representative of the 
owners or operators has filed a certificate of representa-
tion with regard to matters under this title, including the 
holding and distribution of emission allowances and the 
proceeds of transactions involving emission allowances. 
Where there are multiple holders of a legal or equitable 
title to, or a leasehold interest in, such a covered entity 
or other entity or where a utility or industrial customer 
purchases power from an independent power producer, the 
certificate shall state— 
‘‘(1) that emission allowances and the proceeds 
of transactions involving emission allowances will be 
deemed to be held or distributed in proportion to 
each holder’s legal, equitable, leasehold, or contrac-
tual reservation or entitlement; or 
‘‘(2) if such multiple holders have expressly pro-
vided for a different distribution of emission allow-
ances by contract, that emission allowances and the 
proceeds of transactions involving emission allow-
ances will be deemed to be held or distributed in ac-
cordance with the contract. 
A passive lessor, or a person who has an equitable interest 
through such lessor, whose rental payments are not based, 
either directly or indirectly, upon the revenues or income 
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from the covered entity or other person shall not be 
deemed to be a holder of a legal, equitable, leasehold, or 
contractual interest for the purpose of holding or distrib-
uting emission allowances as provided in this subsection, 
during either the term of such leasehold or thereafter, un-
less expressly provided for in the leasehold agreement. Ex-
cept as otherwise provided in this subsection, where all 
legal or equitable title to or interest in a covered entity, 
or other entity, is held by a single person, the certificate 
shall state that all emission allowances received by the en-
tity are deemed to be held for that person. 
‘‘(c) PROHIBITION.—It shall be unlawful for any per-
son to operate any covered entity øthat is a stationary 
source subject to title V¿ except in compliance with the 
terms and requirements of a permit issued by the Admin-
istrator or a State with an approved permit program. For 
purposes of this subsection, compliance, as provided in 
section 504(f), with a permit issued under title V which 
complies with this title for covered entities shall be deemed 
compliance with this subsection as well as section 502(a). 
‘‘SEC. 728. INTERNATIONAL EMISSION ALLOWANCES. 
‘‘(a) QUALIFYING PROGRAMS.—The Administrator, 
in consultation with the Secretary of State, may by rule 
designate an international climate change program as a 
qualifying international program if— 
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‘‘(1) the program is run by a national or supra-
national foreign government, and imposes a manda-
tory absolute tonnage limit on greenhouse gas emis-
sions from 1 or more foreign countries, or from 1 or 
more economic sectors in such a country or coun-
tries; and 
‘‘(2) the program is at least as stringent as the 
program established by this title, including provi-
sions to ensure at least comparable monitoring, com-
pliance, enforcement, quality of offsets, and restric-
tions on the use of offsets. 
‘‘(b) DISQUALIFIED ALLOWANCES.—An international 
emission allowance may not be held under section 
722(d)(2) if it is in the nature of an offset instrument 
or allowance awarded based on the achievement of green-
house gas emission reductions or avoidance, or greenhouse 
gas sequestration, that are not subject to the mandatory 
absolute tonnage limits referred to in subsection (a)(1). 
‘‘(c) RETIREMENT.— 
‘‘(1) ENTITY
CERTIFICATION.—The owner or 
operator of an entity that holds an international 
emission allowance under section 722(d)(2) shall 
certify to the Administrator that such international 
emission allowance has not previously been used to 
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comply with any foreign, international, or domestic 
greenhouse gas regulatory program. 
‘‘(2) RETIREMENT.— 
‘‘(A) FOREIGN AND INTERNATIONAL REG-
ULATORY
ENTITIES.—The Administrator, in 
consultation with the Secretary of State, shall 
seek, by whatever means appropriate, including 
agreements and technical cooperation on allow-
ance tracking, to ensure that any relevant for-
eign, international, and domestic regulatory en-
tities— 
‘‘(i) are notified of the use, for pur-
poses of compliance with this title, of any 
international emission allowance; and 
‘‘(ii) provide for the disqualification of 
such international emission allowance for 
any subsequent use under the relevant for-
eign, international, or domestic greenhouse 
gas regulatory program, regardless of 
whether such use is a sale, exchange, or 
submission to satisfy a compliance obliga-
tion. 
‘‘(B) DISQUALIFICATION
FROM
FURTHER 
USE.—The Administrator shall ensure that, 
once an international emission allowance has 
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been disqualified or otherwise used for purposes 
of compliance with this title, such allowance 
shall be disqualified from any further use under 
this title. 
‘‘(d) USE LIMITATIONS.—The Administrator may, by 
rule, modify the percentage applicable to international 
emission allowances under section 722(d)(2), consistent 
with the purposes of the Safe Climate Act. 
‘‘PART D—OFFSETS 
‘‘SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD. 
‘‘(a) ESTABLISHMENT.—Not later than 30 days after 
the date of enactment of this title, the Administrator shall 
establish an independent Offsets Integrity Advisory 
Board. The Advisory Board shall make recommendations 
to the Administrator for use in promulgating and revising 
regulations under this part and part E, and for ensuring 
the overall environmental integrity of the programs estab-
lished pursuant to those regulations. 
‘‘(b) MEMBERSHIP.—The Advisory Board shall be 
comprised of at least nine members. Each member shall 
be qualified by education, training, and experience to 
evaluate scientific and technical information on matters 
referred to the Board under this section. The Adminis-
trator shall appoint Advisory Board members, including 
a chair and vice-chair of the Advisory Board. Terms shall 
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be 3 years in length, except for initial terms, which may 
be up to 5 years in length to allow staggering. Members 
may be reappointed only once for an additional 3-year 
term, and such second term may follow directly after a 
first term. 
‘‘(c) ACTIVITIES.—The Advisory Board established 
pursuant to subsection (a) shall— 
‘‘(1) provide recommendations, not later than 
90 days after the Advisory Board’s establishment 
and periodically thereafter, to the Administrator re-
garding offset project types that should be consid-
ered for eligibility under section 733, taking into 
consideration relevant scientific and other issues, in-
cluding— 
‘‘(A) the availability of a representative 
data set for use in developing the activity base-
line; 
‘‘(B) the potential for accurate quantifica-
tion of greenhouse gas reduction, avoidance, or 
sequestration for an offset project type; 
‘‘(C) the potential level of scientific and 
measurement uncertainty associated with an 
offset project type; and 
‘‘(D) any beneficial or adverse environ-
mental, public health, welfare, social, economic, 
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or energy effects associated with an offset 
project type; 
‘‘(2) make available to the Administrator its ad-
vice and comments on offset methodologies that 
should be considered under regulations promulgated 
pursuant to section 734(a) and (b), including meth-
odologies to address the issues of additionality, ac-
tivity baselines, measurement, leakage, uncertainty, 
permanence, and environmental integrity; 
‘‘(3) make available the Administrator, and 
other relevant Federal agencies, its advice and com-
ments regarding scientific, technical, and methodo-
logical issues specific to the issuance of international 
offset credits under section 743; 
‘‘(4) make available to the Administrator, and 
other relevant Federal agencies, its advice and com-
ments regarding scientific, technical, and methodo-
logical issues associated with the implementation of 
part E; 
‘‘(5) make available to the Administrator its ad-
vice and comments on areas in which further knowl-
edge is required to appraise the adequacy of exist-
ing, revised, or proposed methodologies for use 
under this part and part E, and describe the re-
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search efforts necessary to provide the required in-
formation; and 
‘‘(6) make available to the Administrator its ad-
vice and comments on other ways to improve or 
safeguard the environmental integrity of programs 
established under this part and part E. 
‘‘(d) SCIENTIFIC REVIEW OF OFFSET AND DEFOR-
ESTATION REDUCTION PROGRAMS.—Not later than Janu-
ary 1, 2017, and at five-year intervals thereafter, the Ad-
visory Board shall submit to the Administrator and make 
available to the public an analysis of relevant scientific and 
technical information related to this part and part E. The 
Advisory Board shall review approved and potential meth-
odologies, scientific studies, offset project monitoring, off-
set project verification reports, and audits related to this 
part and part E, and evaluate the net emissions effects 
of implemented offset projects. The Advisory Board shall 
recommend changes to offset methodologies, protocols, or 
project types, or to the overall offset program under this 
part, to ensure that offset credits issued by the Adminis-
trator do not compromise the integrity of the annual emis-
sion reductions established under section 703, and to 
avoid or minimize adverse effects to human health or the 
environment. 
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‘‘SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM. 
‘‘(a) REGULATIONS.—Not later than 2 years after 
the date of enactment of this title, the Administrator, in 
consultation with appropriate Federal agencies and taking 
into consideration the recommendations of the Advisory 
Board, shall promulgate regulations establishing a pro-
gram for the issuance of offset credits in accordance with 
the requirements of this part. The Administrator shall pe-
riodically revise these regulations as necessary to meet the 
requirements of this part. 
‘‘(b) REQUIREMENTS.—The regulations described in 
subsection (a) shall— 
‘‘(1) authorize the issuance of offset credits 
with respect to qualifying offset projects that result 
in reductions or avoidance of greenhouse gas emis-
sions, or sequestration of greenhouse gases; 
‘‘(2) ensure that such offset credits represent 
verifiable and additional greenhouse gas emission re-
ductions or avoidance, or increases in sequestration; 
‘‘(3) ensure that offset credits issued for se-
questration offset projects are only issued for green-
house gas reductions that are permanent; 
‘‘(4) provide for the implementation of the re-
quirements of this part; and 
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‘‘(5) include as reductions in greenhouse gases 
reductions achieved through the destruction of meth-
ane and its conversion to carbon dioxide. 
‘‘(c) COORDINATION TO MINIMIZE NEGATIVE EF-
FECTS.—In promulgating and implementing regulations 
under this part, the Administrator shall act (including by 
rejecting projects, if necessary) to avoid or minimize, to 
the maximum extent practicable, adverse effects on human 
health or the environment resulting from the implementa-
tion of offset projects under this part. 
‘‘(d) OFFSET REGISTRY.—The Administrator shall 
establish within the allowance tracking system established 
under section 724(d) an Offset Registry for qualifying off-
set projects and offset credits issued with respect thereto 
under this part. 
‘‘(e) LEGAL STATUS OF OFFSET CREDIT.—An offset 
credit does not constitute a property right. 
‘‘(f) FEES.—The Administrator shall assess fees pay-
able by offset project developer in an amount necessary 
to cover the administrative costs to the Environmental 
Protection Agency of carrying out the activities under this 
part. Amounts collected for such fees shall be available 
to the Administrator for carrying out the activities under 
this part to the extent provided in advance in appropria-
tions Acts. 
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‘‘SEC. 733. ELIGIBLE PROJECT TYPES. 
‘‘(a) LIST OF ELIGIBLE PROJECT TYPES.— 
‘‘(1) IN GENERAL.—As part of the regulations 
promulgated under section 732(a), the Adminis-
trator shall establish, and may periodically revise, a 
list of types of projects eligible to generate offset 
credits, including international offset credits, under 
this part. 
‘‘(2) ADVISORY BOARD RECOMMENDATIONS.— 
In determining the eligibility of project types, the 
Administrator shall take into consideration the rec-
ommendations of the Advisory Board. If a list estab-
lished under this section differs from the rec-
ommendations of the Advisory Board, the regula-
tions promulgated under section 732(a) shall include 
a justification for the discrepancy. 
‘‘(3) INITIAL DETERMINATION.—The Adminis-
trator shall establish the initial eligibility list under 
paragraph (1) not later than one year after the date 
of enactment of this title. The Administrator shall 
add additional project types to the list not later than 
2 years after the date of enactment of this title. In 
determining the initial list, the Administrator shall 
give priority to consideration of offset project types 
that are recommended by the Advisory Board and 
for which there are well developed methodologies 
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that the Administrator determines would meet the 
criteria of section 734, with such modifications as 
the Administrator deems appropriate. In issuing 
methodologies pursuant to section 734, the Adminis-
trator shall give priority to methodologies for offset 
types included on the initial eligibility list. 
‘‘(b) MODIFICATION OF LIST.—The Administrator— 
‘‘(1) may at any time, by rule, add a project 
type to the list established under subsection (a) if 
the Administrator, in consultation with appropriate 
Federal agencies and taking into consideration the 
recommendations of the Advisory Board, determines 
that the project type can generate additional reduc-
tions or avoidance of greenhouse gas emissions, or 
sequestration of greenhouse gases, subject to the re-
quirements of this part; 
‘‘(2) may at any time, by rule, determine that 
a project type on the list does not generate addi-
tional reductions or avoidance of greenhouse gas 
emissions, or sequestration of greenhouse gases, sub-
ject to the requirements of this part, and remove a 
project type from the list established under sub-
section (a), in consultation with appropriate Federal 
agencies and taking into consideration the rec-
ommendations of the Advisory Board; and 
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‘‘(3) shall consider adding to or removing from 
the list established under subsection (a), at a min-
imum, project types proposed to the Adminis-
trator— 
‘‘(A) by petition pursuant to subsection 
(c); or 
‘‘(B) by the Advisory Board. 
‘‘(c) PETITION PROCESS.—Any person may petition 
the Administrator to modify the list established under sub-
section (a) by adding or removing a project type pursuant 
to subsection (b). Any such petition shall include a show-
ing by the petitioner that there is adequate data to estab-
lish that the project type does or does not meet the re-
quirements of this part. Not later than 12 months after 
receipt of such a petition, the Administrator shall either 
grant or deny the petition and publish a written expla-
nation of the reasons for the Administrator’s decision. The 
Administrator may not deny a petition under this sub-
section on the basis of inadequate Environmental Protec-
tion Agency resources or time for review. 
‘‘SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS. 
‘‘(a) METHODOLOGIES.—As part of the regulations 
promulgated under section 732(a), the Administrator shall 
establish, for each type of offset project listed as eligible 
under section 733, the following: 
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‘‘(1) ADDITIONALITY.—A standardized method-
ology for determining the additionality of greenhouse 
gas emission reductions or avoidance, or greenhouse 
gas sequestration, achieved by an offset project of 
that type. Such methodology shall ensure, at a min-
imum, that any greenhouse gas emission reduction 
or avoidance, or any greenhouse gas sequestration, is 
considered additional only to the extent that it re-
sults from activities that— 
‘‘(A) are not required by or undertaken to 
comply with any law, including any regulation 
or consent order; 
‘‘(B) were not commenced prior to Janu-
ary 1, 2009, except for offset project activities 
that commenced after January 1, 2001, and 
were registered as of the date of enactment of 
this title under an offset program with respect 
to which the Administrator has made an affirm-
ative determination under section 740(a)(2); 
‘‘(C) are not receiving support under part 
E of this title or title IV, subtitle D of the 
American Clean Energy and Security Act of 
2009; and 
‘‘(D) exceed the activity baseline estab-
lished under paragraph (2). 
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‘‘(2) ACTIVITY
BASELINES.—A standardized 
methodology for establishing activity baselines for 
offset projects of that type. The Administrator shall 
set activity baselines to reflect a conservative esti-
mate of business-as-usual performance or practices 
for the relevant type of activity such that the base-
line provides an adequate margin of safety to ensure 
the environmental integrity of offsets calculated in 
reference to such baseline. 
‘‘(3) QUANTIFICATION METHODS.—A standard-
ized methodology for determining the extent to 
which greenhouse gas emission reductions or avoid-
ance, or greenhouse gas sequestration, achieved by 
an offset project of that type exceed a relevant activ-
ity baseline, including protocols for monitoring and 
accounting for uncertainty. 
‘‘(4) LEAKAGE.—A standardized methodology 
for accounting for and mitigating potential leakage, 
if any, from an offset project of that type, taking 
uncertainty into account. 
‘‘(b) ACCOUNTING FOR REVERSALS.— 
‘‘(1) IN GENERAL.—For each type of sequestra-
tion project listed under section 733, the Adminis-
trator shall establish requirements to account for 
and address reversals, including— 
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‘‘(A) a requirement to report any reversal 
with respect to an offset project for which offset 
credits have been issued under this part; 
‘‘(B) provisions to require emission allow-
ances to be held in amounts to fully compensate 
for greenhouse gas emissions attributable to re-
versals, and to assign responsibility for holding 
such emission allowances; and 
‘‘(C) any other provisions the Adminis-
trator determines necessary to account for and 
address reversals. 
‘‘(2) MECHANISMS.—The Administrator shall 
prescribe mechanisms to ensure that any sequestra-
tion with respect to which an offset credit is issued 
under this part results in a permanent net increase 
in sequestration, and that full account is taken of 
any actual or potential reversal of such sequestra-
tion, with an adequate margin of safety. The Admin-
istrator shall prescribe at least one of the following 
mechanisms to meet the requirements of this para-
graph: 
‘‘(A) An offsets reserve, pursuant to para-
graph (3). 
‘‘(B) Insurance that provides for purchase 
and provision to the Administrator for retire-
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ment of an amount of offset credits or emission 
allowances equal in number to the tons of car-
bon dioxide equivalents of greenhouse gas emis-
sions released due to reversal. 
‘‘(C) Another mechanism that the Admin-
istrator determines satisfies the requirements of 
this part. 
‘‘(3) OFFSETS RESERVE.— 
‘‘(A) IN GENERAL.—An offsets reserve re-
ferred to in paragraph (2)(A) is a program 
under which, before issuance of offset credits 
under this part, the Administrator shall sub-
tract and reserve from the quantity to be issued 
a quantity of offset credits based on the risk of 
reversal. The Administrator shall— 
‘‘(i) hold these reserved offset credits 
in the offsets reserve; and 
‘‘(ii) register the holding of the re-
served offset credits in the Offset Registry 
established under section 732(d). 
‘‘(B) PROJECT REVERSAL.— 
‘‘(i) IN GENERAL.—If a reversal has 
occurred with respect an offset project for 
which offset credits are reserved under this 
paragraph, the Administrator shall remove 
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offset credits from the offsets reserve and 
cancel them to fully account for the tons of 
carbon dioxide equivalent that are no 
longer sequestered. 
‘‘(ii) INTENTIONAL
REVERSALS.—If 
the Administrator determines that a rever-
sal was intentional, the offset project devel-
oper for the relevant offset project shall 
place into the offsets reserve a quantity of 
offset credits, or combination of offset 
credits and emission allowances, equal in 
number to the number of reserve offset 
credits that were canceled due to the rever-
sal pursuant to clause (i). 
‘‘(iii) UNINTENTIONAL REVERSALS.— 
If the Administrator determines that a re-
versal was unintentional, the offset project 
developer for the relevant offset project 
shall place into the offsets reserve a quan-
tity of offset credits, or combination of off-
set credits and emission allowances, equal 
in number to half the number of offset 
credits that were reserved for that offset 
project, or half the number of reserve off-
set credits that were canceled due to the 
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reversal pursuant to clause (i), whichever 
is less. 
‘‘(C) USE
OF
RESERVED
OFFSET
CRED-
ITS.—Offset credits placed into the offsets re-
serve under this paragraph may not be used to 
comply with section 722. 
‘‘(c) CREDITING PERIODS.— 
‘‘(1) IN
GENERAL.—For each offset project 
type, the Administrator shall specify a crediting pe-
riod, and establish provisions for petitions for new 
crediting periods, in accordance with this subsection. 
‘‘(2) DURATION.—The crediting period shall be 
no less than 5 and no greater than 10 years for any 
project type other than those involving sequestra-
tion. 
‘‘(3) ELIGIBILITY.—An offset project shall be 
eligible to generate offset credits under this part 
only during the project’s crediting period. During 
such crediting period, the project shall remain eligi-
ble to generate offset credits, subject to the meth-
odologies and project type eligibility list that applied 
as of the date of project approval under section 735, 
except as provided in paragraph (4) of this sub-
section. 
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‘‘(4) PETITION FOR NEW CREDITING PERIOD.— 
An offset project developer may petition for a new 
crediting period to commence after termination of a 
crediting period, subject to the methodologies and 
project type eligibility list in effect at the time when 
such petition is submitted. A petition may not be 
submitted under this paragraph more than 18 
months before the end of the pending crediting pe-
riod. The Administrator may limit the number of 
new crediting periods available for projects of par-
ticular project types. 
‘‘(d) ENVIRONMENTAL INTEGRITY.—In establishing 
the requirements under this section, the Administrator 
shall apply conservative assumptions or methods to maxi-
mize the certainty that the environmental integrity of the 
cap established under section 703 is not compromised. 
‘‘(e) PRE-EXISTING METHODOLOGIES.—In promul-
gating requirements under this section, the Administrator 
shall give due consideration to methodologies for offset 
projects existing as of the date of enactment of this title. 
‘‘(f) ADDED PROJECT TYPES.—The Administrator 
shall establish methodologies described in subsection (a), 
and, as applicable, requirements and mechanisms for re-
versals as described in subsection (b), for any project type 
that is added to the list pursuant to section 733. 
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‘‘SEC. 735. APPROVAL OF OFFSET PROJECTS. 
‘‘(a) APPROVAL PETITION.—An offset project devel-
oper shall submit an offset project approval petition pro-
viding such information as the Administrator requires to 
determine whether the offset project is eligible for issuance 
of offset credits under rules promulgated pursuant to this 
part. 
‘‘(b) TIMING.—An approval petition shall be sub-
mitted to the Administrator under subsection (a) no later 
than the time at which an offset project’s first verification 
report is submitted under section 736. 
‘‘(c) APPROVAL PETITION REQUIREMENTS.—As part 
of the regulations promulgated under section 732, the Ad-
ministrator shall include provisions for, and shall specify, 
the required components of an offset project approval peti-
tion required under subsection (a), which shall include— 
‘‘(1) designation of an offset project developer; 
and 
‘‘(2) any other information that the Adminis-
trator considers to be necessary to achieve the pur-
poses of this part. 
‘‘(d) APPROVAL AND NOTIFICATION.—Not later than 
90 days after receiving a complete approval petition under 
subsection (a), the Administrator shall approve or deny 
the petition in writing and, if the petition is denied, pro-
vide the reasons for denial. After an offset project is ap-
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proved, the offset project developer shall not be required 
to resubmit an approval petition during the offset project’s 
crediting period, except as provided in section 734(c)(4). 
‘‘(e) APPEAL.—The Administrator shall establish 
procedures for appeal and review of determinations made 
under subsection (d). 
‘‘(f) VOLUNTARY PREAPPROVAL REVIEW.—The Ad-
ministrator may establish a voluntary preapproval review 
procedure, to allow an offset project developer to request 
the Administrator to conduct a preliminary eligibility re-
view for an offset project. Findings of such reviews shall 
not be binding upon the Administrator. The voluntary 
preapproval review procedure— 
‘‘(1) shall require the offset project developer to 
submit such basic project information as the Admin-
istrator requires to provide a meaningful review; and 
‘‘(2) shall require a response from the Adminis-
trator not later than 6 weeks after receiving a re-
quest for review under this subsection. 
‘‘SEC. 736. VERIFICATION OF OFFSET PROJECTS. 
‘‘(a) IN GENERAL.—As part of the regulations pro-
mulgated under section 732(a), the Administrator shall es-
tablish requirements, including protocols, for verification 
of the quantity of greenhouse gas emission reductions or 
avoidance, or sequestration of greenhouse gases, resulting 
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from an offset project. The regulations shall require that 
an offset project developer shall submit a report, prepared 
by a third-party verifier accredited under subsection (d), 
providing such information as the Administrator requires 
to determine the quantity of greenhouse gas emission re-
ductions or avoidance, or sequestration of greenhouse gas, 
resulting from the offset project. 
‘‘(b) SCHEDULE.—The Administrator shall prescribe 
a schedule for the submission of verification reports under 
subsection (a). 
‘‘(c) VERIFICATION REPORT REQUIREMENTS.—The 
Administrator shall specify the required components of a 
verification report required under subsection (a), which 
shall include— 
‘‘(1) the name and contact information for a 
designated representative for the offset project devel-
oper; 
‘‘(2) the quantity of greenhouse gas reduced, 
avoided, or sequestered; 
‘‘(3) the methodologies applicable to the project 
pursuant to section 734; 
‘‘(4) a certification that the project meets the 
applicable requirements; 
‘‘(5) a certification establishing that the conflict 
of interest requirements in the regulations promul-
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gated under subsection (d)(1) have been complied 
with; and 
‘‘(6) any other information that the Adminis-
trator considers to be necessary to achieve the pur-
poses of this part. 
‘‘(d) VERIFIER ACCREDITATION.— 
‘‘(1) IN GENERAL.—As part of the regulations 
promulgated under section 732(a), the Adminis-
trator shall establish a process and requirements for 
periodic accreditation of third-party verifiers to en-
sure that such verifiers are professionally qualified 
and have no conflicts of interest. 
‘‘(2) STANDARDS.— 
‘‘(A) AMERICAN NATIONAL STANDARDS IN-
STITUTE ACCREDITATION.—The Administrator 
may accredit, or accept for purposes of accredi-
tation under this subsection, verifiers accredited 
under the American National Standards Insti-
tute (ANSI) accreditation program in accord-
ance with ISO 14065. The Administrator shall 
accredit, or accept for accreditation, verifiers 
under this subparagraph only if the Adminis-
trator finds that the American National Stand-
ards Institute accreditation program provides 
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sufficient assurance that the requirements of 
this part will be met. 
‘‘(B) EPA ACCREDITATION.—As part of 
the regulations promulgated under section 
732(a), the Administrator may establish accred-
itation standards for verifiers under this sub-
section, and may establish related training and 
testing programs and requirements. 
‘‘(3) PUBLIC
ACCESSIBILITY.—Each verifier 
meeting the requirements for accreditation in ac-
cordance with this subsection shall be listed in a 
publicly accessible database, which shall be main-
tained and updated by the Administrator. 
‘‘SEC. 737. ISSUANCE OF OFFSET CREDITS. 
‘‘(a) DETERMINATION
AND
NOTIFICATION.—Not 
later than 90 days after receiving a complete verification 
report under section 736, the Administrator shall— 
‘‘(1) make the report publicly available; 
‘‘(2) make a determination of the quantity of 
greenhouse gas emissions reduced or avoided, or 
greenhouse gases sequestered, resulting from an off-
set project approved under section 735; and 
‘‘(3) notify the offset project developer in writ-
ing of such determination. 
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‘‘(b) ISSUANCE OF OFFSET CREDITS.—The Adminis-
trator shall issue one offset credit to an offset project de-
veloper for each ton of carbon dioxide equivalent that the 
Administrator has determined has been reduced, avoided, 
or sequestered during the period covered by a verification 
report submitted in accordance with section 736, only if— 
‘‘(1) the Administrator has approved the offset 
project pursuant to section 735; and 
‘‘(2) the relevant emissions reduction, avoid-
ance, or sequestration has already occurred, during 
the offset project’s crediting period. 
‘‘(c) APPEAL.—The Administrator shall establish 
procedures for appeal and review of determinations made 
under subsection (a). 
‘‘(d) TIMING.—Offset credits meeting the criteria es-
tablished in subsection (b) shall be issued not later than 
2 weeks following the verification determination made by 
the Administrator under subsection (a). 
‘‘(e) REGISTRATION.—The Administrator shall as-
sign a unique serial number to and register each offset 
credit to be issued in the Offset Registry established under 
section 732(d). 
‘‘SEC. 738. AUDITS. 
‘‘(a) IN GENERAL.—The Administrator shall, on an 
ongoing basis, conduct random audits of offset projects, 
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national offset credits for greenhouse gas emission 
reductions achieved through activities to reduce de-
forestation only if, in addition to the requirements of 
subsection (b)— 
‘‘(A) the activity occurs in— 
‘‘(i) a country listed by the Adminis-
trator pursuant to paragraph (2); 
‘‘(ii) a state or province listed by the 
Administrator pursuant to paragraph (5); 
or 
‘‘(iii) a country listed by the Adminis-
trator pursuant to paragraph (6); 
‘‘(B) except as provided in paragraph (5) 
or (6), the quantity of the international offset 
credits is determined by comparing the national 
emissions from deforestation relative to a na-
tional deforestation baseline for that country es-
tablished, in accordance with an agreement or 
arrangement described in subsection (b)(2)(A), 
pursuant to paragraph (4); 
‘‘(C) the reduction in emissions from de-
forestation has occurred before the issuance of 
the international offset credit and, taking into 
consideration relevant international standards, 
has been demonstrated using ground-based in-
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