111 
(B) by adding at the end the following: 
‘‘Effective beginning January 1, 2010, it shall 
be unlawful for any person to sell or distribute, 
or offer for sale or distribution, in interstate 
commerce to any person (other than a person 
performing service for consideration on motor 
vehicle air-conditioning systems in compliance 
with this section) any hydrofluorocarbon sub-
stitute that is suitable for use in a motor vehi-
cle air-conditioning system and that is in a con-
tainer that contains less than 20 pounds of the 
hydrofluorocarbon substitute.’’. 
SEC. 104. WAIVER OF PREEMPTION FOR CALIFORNIA 
GREENHOUSE 
GAS 
EMISSION 
STANDARDS 
FOR VEHICLES. 
Section 209 of the Clean Air Act (42 U.S.C. 7543) 
is amended by adding at the end the following: 
‘‘(f) WAIVER.—Notwithstanding subsection (b) or 
any other provision of law, the application for a waiver 
of preemption dated December 21, 2005, submitted to the 
Administrator pursuant to subsection (b) by the State of 
California for regulations of that State to control green-
house gas emissions from motor vehicles shall be consid-
ered to be approved.’’. 
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112 
SEC. 105. LOW-CARBON FUEL STANDARD. 
(a) DEFINITIONS.—Section 211(o)(1) of the Clean 
Air Act (42 U.S.C. 7545(o)(1)) is amended— 
(1) 
by 
redesignating 
subparagraphs 
(G) 
through (L) as subparagraphs (J) through (O), re-
spectively; 
(2) by inserting after subparagraph (F) the fol-
lowing: 
‘‘(G) CULTIVATED NOXIOUS PLANT.—The 
term ‘cultivated noxious plant’ means a plant 
that is included on— 
‘‘(i) the Federal noxious weed list 
maintained by the Animal and Plant 
Health Inspection Service; or 
‘‘(ii) any comparable State list. 
‘‘(H) FUEL
EMISSION
BASELINE.—The 
term ‘fuel emission baseline’ means the average 
lifecycle greenhouse gas emissions per unit of 
energy of the aggregate of all transportation 
fuels sold or introduced into commerce in cal-
endar year 2005, as determined by the Admin-
istrator under paragraph (13). 
‘‘(I) FUEL
PROVIDER.—The term ‘fuel 
provider’ includes, as the Administrator deter-
mines to be appropriate, any individual or enti-
ty that produces, refines, blends, or imports any 
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113 
transportation fuel in commerce in, or into, the 
United States.’’; and 
(3) by striking subparagraph (O) (as redesig-
nated by paragraph (1)) and inserting the following: 
‘‘(O) TRANSPORTATION FUEL.—The term 
‘transportation fuel’ means fuel for use in 
motor vehicles, nonroad vehicles, nonroad en-
gines, or aircraft.’’. 
(b) ESTABLISHMENT.—Section 211(o) of the Clean 
Air Act (42 U.S.C. 7545(o)) is amended by adding at the 
end the following: 
‘‘(13) ADVANCED CLEAN FUEL PERFORMANCE 
STANDARD.— 
‘‘(A) METHODOLOGY AND BASELINE.—Not 
later than January 1, 2010, the Administrator 
shall, by regulation— 
‘‘(i) establish a methodology for use in 
determining the lifecycle greenhouse gas 
emissions per unit of energy of all trans-
portation fuels in commerce for which the 
Administrator has not already established 
such a methodology; and 
‘‘(ii) determine the fuel emission base-
line. 
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114 
‘‘(B) 
PERFORMANCE
STANDARD.—Not 
later than January 1, 2010, the Administrator 
shall, by regulation, establish a requirement ap-
plicable to transportation fuel providers to re-
duce, on an annual average basis, the average 
lifecycle greenhouse gas emissions per unit of 
energy of the aggregate quantity of transpor-
tation fuel produced, refined, blended, or im-
ported by the fuel provider to a level that is, to 
the maximum extent practicable— 
‘‘(i) by not later than calendar year 
2011 and in subsequent calendar years 
thereafter, at least equal to or less than 
the fuel emission baseline; 
‘‘(ii) by not later than calendar year 
2012, equivalent to the difference between 
the fuel emission baseline and the lifecycle 
greenhouse gas emissions per unit of en-
ergy reduced by the volumetric renewable 
fuel requirements of paragraph (2)(B); 
‘‘(iii) by not later than calendar year 
2023, at least 5 percent less than the fuel 
emission baseline; and 
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115 
‘‘(iv) by not later than calendar year 
2028, at least 10 percent less than the fuel 
emission baseline. 
‘‘(C) PREVENTION OF AIR QUALITY DETE-
RIORATION.— 
‘‘(i) STUDY.—Not later than 18 
months after the date of enactment of this 
paragraph, the Administrator shall com-
plete a study to determine whether the 
greenhouse gas emission reductions re-
quired under subparagraph (B) will ad-
versely impact air quality as a result of 
changes in vehicle and engine emissions of 
air pollutants regulated under this Act. 
‘‘(ii) CONSIDERATIONS.—The study 
shall include consideration of different 
blend levels, types of transportation fuels, 
and available vehicle technologies and ap-
propriate national, regional, and local air 
quality control measures. 
‘‘(iii) REGULATIONS.—Not later than 
3 years after the date of enactment of this 
paragraph, the Administrator shall ei-
ther— 
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116 
‘‘(I) promulgate fuel regulations 
to implement appropriate measures to 
mitigate, to the maximum extent 
practicable and taking into consider-
ation the results of the study con-
ducted under this clause, any adverse 
impacts on air quality as a result of 
the greenhouse gas emission reduc-
tions required by this subsection; or 
‘‘(II) make a determination that 
no such measures are necessary. 
‘‘(D) PERFORMANCE STANDARD FOR CAL-
ENDAR YEAR 2033 AND THEREAFTER.—For cal-
endar year 2033, and every 5 years thereafter, 
the Administrator, in consultation with the Sec-
retary of Agriculture and the Secretary of En-
ergy, shall revise the applicable performance 
standard under subparagraph (B) to reduce, to 
the maximum extent practicable, the average 
lifecycle greenhouse gas emissions per unit of 
energy of the aggregate quantity of transpor-
tation fuel sold or introduced into commerce in 
the United States. 
‘‘(E) REVISION OF REGULATIONS.—In ac-
cordance with the purposes of the Investing in 
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Climate Action and Protection Act, the Admin-
istrator may, as appropriate, revise the regula-
tions promulgated under subparagraphs (A) 
and (B) as necessary to reflect or respond to 
changes in the transportation fuel market or 
other relevant circumstances. 
‘‘(F) METHOD OF CALCULATION FOR HY-
DROGEN
AND
ELECTRICITY.—In calculating 
under subparagraph (A)(i) the lifecycle green-
house gas emissions of hydrogen or electricity 
(when used as a transportation fuel), the Ad-
ministrator shall— 
‘‘(i) include emission resulting from 
the production of the hydrogen or elec-
tricity; and 
‘‘(ii) consider the energy delivered 
by— 
‘‘(I) 6.4 kilowatt-hours of elec-
tricity; 
‘‘(II) 32 standard cubic feet of 
hydrogen; or 
‘‘(III) 1.25 gallons of liquid hy-
drogen, 
to be equivalent to the energy delivered by 
1 gallon of ethanol. 
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118 
‘‘(G) 
DETERMINATION
OF
LIFECYCLE 
GREENHOUSE GAS EMISSIONS.—In carrying out 
this paragraph, the Administrator shall use the 
best available scientific and technical informa-
tion to determine the lifecycle greenhouse gas 
emissions per unit of energy of transportation 
fuels derived from— 
‘‘(i) renewable biomass; 
‘‘(ii) electricity, including the entire 
lifecycle of the fuel; 
‘‘(iii) 1 or more fossil fuels, including 
the entire lifecycle of the fuels; and 
‘‘(iv) hydrogen, including the entire 
lifecycle of the fuel. 
‘‘(H) EQUIVALENT
EMISSIONS.—In car-
rying out this subparagraph, the Administrator 
shall consider transportation fuel derived from 
cultivated noxious plants, and transportation 
fuel derived from biomass sources other than 
renewable biomass, to have emissions per unit 
of energy equivalent to the greater of— 
‘‘(i) the lifecycle greenhouse gas emis-
sions of such transportation fuel; or 
‘‘(ii) the fuel emission baseline. 
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119 
‘‘(I) ELECTION TO PARTICIPATE.—An elec-
tricity provider may elect to participate in the 
program under this paragraph if the electricity 
provider provides and separately tracks elec-
tricity for transportation through a meter 
that— 
‘‘(i) measures the electricity used for 
transportation separately from electricity 
used for other purposes; and 
‘‘(ii) allows for load management and 
time-of-use rates. 
‘‘(J) CREDITS.— 
‘‘(i) IN
GENERAL.—The regulations 
promulgated to carry out this paragraph 
shall permit fuel providers to generate 
credits for achieving, during a calendar 
year, greater reductions in lifecycle green-
house gas emissions of the fuel provided, 
blended, or imported by the fuel provider 
than are required under subparagraph (B). 
‘‘(ii) METHOD
OF
CALCULATION.— 
The number of credits received by a fuel 
provider under clause (i) for a calendar 
year shall be the product obtained by mul-
tiplying the aggregate quantity of fuel pro-
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120 
duced, distributed, or imported by the fuel 
provider during the calendar year by the 
difference between— 
‘‘(I) the lifecycle greenhouse gas 
emissions per unit of energy of that 
quantity of fuel; and 
‘‘(II) 
the 
maximum 
lifecycle 
greenhouse gas emissions per unit of 
energy of that quantity of fuel per-
mitted for the calendar year under 
subparagraph (B). 
‘‘(K) COMPLIANCE.— 
‘‘(i) IN GENERAL.—Each fuel provider 
subject to this paragraph shall dem-
onstrate compliance with this paragraph, 
including, as necessary, through the use of 
credits generated, banked, or purchased. 
‘‘(ii) NO LIMITATION ON TRADING OR 
BANKING.—There shall be no limit on the 
ability of any fuel provider to trade or 
bank credits pursuant to this subpara-
graph. 
‘‘(iii) USE OF BANKED CREDITS.—A 
fuel provider may use banked credits under 
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121 
this subparagraph with no discount or 
other adjustment to the credits. 
‘‘(iv) INABILITY
TO
GENERATE
OR 
PURCHASE SUFFICIENT CREDITS.—A fuel 
provider that is unable to generate or pur-
chase sufficient credits to meet the require-
ments of subparagraph (B) may carry the 
compliance deficit forward, subject to the 
condition that the fuel provider, for the 
calendar year following the year for which 
the deficit is created— 
‘‘(I) achieves compliance with 
subparagraph (B); and 
‘‘(II) generates or purchases ad-
ditional credits to offset the deficit 
from the preceding calendar year. 
‘‘(v) TYPES OF CREDITS.—To encour-
age innovation in transportation fuels— 
‘‘(I) only credits created in the 
production of transportation fuels 
may be used for the purpose of com-
pliance described in clause (i); and 
‘‘(II) credits created by or in 
other sectors, such as manufacturing, 
may not be used for that purpose. 
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122 
‘‘(L) IMPACT ON FOOD PRODUCTION.—Not 
later than 18 months after the date of enact-
ment of this paragraph, the Administrator shall 
evaluate and consider promulgating regulations 
to address any significant impacts on access to, 
and production of, food due to the sourcing and 
production of fuels used to comply with this 
Act. 
‘‘(M) NO
EFFECT
ON
STATE
AUTHOR-
ITY.—Nothing in this paragraph affects the au-
thority of any State to establish, or to maintain 
in effect, any transportation fuel standard that 
reduces greenhouse gas emissions.’’. 
TITLE II—CARBON MARKET 
OVERSIGHT 
SEC. 201. AMENDMENT OF FEDERAL POWER ACT. 
The Federal Power Act (16 U.S.C. 791a and fol-
lowing) is amended by adding the following new part at 
the end thereof: 
‘‘PART IV—REGULATION OF CARBON MARKETS 
‘‘SEC. 401. PURPOSES. 
‘‘The purposes of this part are to— 
‘‘(1) provide for the establishment of markets 
for emission allowances, offset credits, and deriva-
tives based on such allowances and credits (including 
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123 
futures and options markets), through a system of 
effective self-regulation of trading facilities, clearing 
systems, and market participants; 
‘‘(2) ensure transparency and fair competition 
in those markets; and 
‘‘(3) ensure that those markets will function in 
a stable and efficient manner so as to avoid harm 
to the environmental objectives of title I of the In-
vesting in Climate Action and Protection Act or the 
United States economy. 
‘‘SEC. 402. DEFINITIONS. 
‘‘In this part: 
‘‘(1) CARBON CLEARING ORGANIZATION.— 
‘‘(A) IN
GENERAL.—The term ‘carbon 
clearing organization’ means a clearinghouse, 
clearing association, clearing corporation, or 
similar entity, facility, system, or organization 
that— 
‘‘(i) enables each party to an agree-
ment, contract, or transaction involving a 
regulated 
instrument 
to 
substitute, 
through novation or otherwise, the credit 
of the organization for the credit of the 
parties; 
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124 
‘‘(ii) arranges or provides, on a multi-
lateral basis, for the settlement or netting 
of obligations resulting from agreements, 
contracts, or transactions involving regu-
lated instruments executed by participants 
in the organization; or 
‘‘(iii) otherwise provides clearing serv-
ices or arrangements that mutualize or 
transfer among participants in the organi-
zation the credit risk arising from agree-
ments, contracts, or transactions involving 
regulated instruments executed by the par-
ticipants. 
‘‘(B) EXCLUSIONS.—The term ‘carbon 
clearing organization’ does not include an enti-
ty, facility, system, or organization solely be-
cause it arranges or provides for— 
‘‘(i) settlement, netting, or novation of 
obligations resulting from agreements, con-
tracts, or transactions, on a bilateral basis 
and without a central counterparty; or 
‘‘(ii) settlement or netting of cash 
payments through an interbank payment 
system. 
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125 
‘‘(2) COMMISSION.—The term ‘Commission’ 
means the Federal Energy Regulatory Commission. 
‘‘(3) CONTRACT OF SALE.—The term ‘contract 
of sale’ includes a sale, an agreement of sale, and an 
agreement to sell. 
‘‘(4) DEALER.—The term ‘dealer’ means an in-
dividual, association, partnership, corporation, or 
trust that— 
‘‘(A) is engaged in soliciting or in accept-
ing orders for the purchase or sale of a regu-
lated instrument on or subject to the rules of 
a registered carbon trading facility; and 
‘‘(B) in or in connection with the solicita-
tion or acceptance of such an order, accepts 
money, securities, or property (or extends credit 
in lieu thereof) to margin, guarantee, or secure 
any trade or contract that results or may result 
therefrom. 
‘‘(5) DIRECTOR.—The term ‘Director’ means 
the Director of the Office of Carbon Market Over-
sight. 
‘‘(6) ELIGIBLE CONTRACT PARTICIPANT.—The 
term ‘eligible contract participant’ has the meaning 
given the term in section 1a(12) of the Commodity 
Exchange Act (7 U.S.C. 1a(12)). 
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126 
‘‘(7) EMISSION ALLOWANCE.—The term ‘emis-
sion allowance’ has the meaning given that term in 
section 700(8) of the Clean Air Act. 
‘‘(8) FLOOR BROKER.—The term ‘floor broker’ 
means any person who, in or surrounding any pit, 
ring, post, or other place provided by a registered 
carbon trading facility for the meeting of persons 
similarly engaged, purchases or sells for any other 
person a regulated instrument on or subject to the 
rules of the trading facility. 
‘‘(9) FLOOR TRADER.—The term ‘floor trader’ 
means any person who, in or surrounding any pit, 
ring, post, or other place provided by a registered 
carbon trading facility for the meeting of persons 
similarly engaged, purchases, or sells solely for the 
person’s own account, a regulated instrument on or 
subject to the rules of the trading facility. 
‘‘(10) INTRODUCING BROKER.—The term ‘in-
troducing broker’ means any person (except an indi-
vidual who elects to be and is registered as an asso-
ciated person of a dealer) engaged in soliciting or in 
accepting orders for the purchase or sale of a regu-
lated instrument on or subject to the rules of a reg-
istered carbon trading facility, who does not accept 
money, securities, or property (or extend credit in 
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127 
lieu thereof) to margin, guarantee, or secure any 
trade or contract that results or may result from 
such a solicitation or acceptance. 
‘‘(11) MEMBER.—The term ‘member’ means, 
with respect to a trading facility or a carbon clearing 
organization, an individual, association, partnership, 
corporation, or trust owning or holding membership 
in, admitted to membership representation on, or 
having trading privileges on the trading facility or 
carbon clearing organization. 
‘‘(12) OFFSET CREDIT.—The term ‘offset cred-
it’ has the meaning given that term in section 
700(20) of the Clean Air Act. 
‘‘(13) REGULATED
ALLOWANCE.—The term 
‘regulated allowance’ means an emission allowance 
or an offset credit. 
‘‘(14) REGULATED ALLOWANCE DERIVATIVE.— 
The term ‘regulated allowance derivative’ means an 
instrument that is or includes an instrument— 
‘‘(A) which— 
‘‘(i) is of the character of, or is com-
monly known to the trade as, an ‘option’, 
‘privilege’, ‘indemnity’, ‘bid’, ‘offer’, ‘put’, 
‘call’, ‘advance guaranty’, or ‘decline guar-
anty’; or 
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128 
‘‘(ii) is a contract of sale for future 
delivery; and 
‘‘(B) the value of which, in whole or in 
part, is directly linked to the price of a regu-
lated allowance or another regulated allowance 
derivative. 
‘‘(15) REGULATED
INSTRUMENT.—The term 
‘regulated instrument’ means a regulated allowance 
or a regulated allowance derivative. 
‘‘(16) TRADING FACILITY.—The term ‘trading 
facility’ means a person or group of persons that 
constitutes, maintains, or provides a physical or elec-
tronic facility or system in which multiple partici-
pants have the ability to execute or trade agree-
ments, contracts, or transactions involving a regu-
lated instrument by accepting bids and offers made 
by other participants that are open to multiple par-
ticipants in the facility or system. 
‘‘(17) UNITED
STATES.—The term ‘United 
States’ includes the territories and possessions of the 
United States. 
‘‘SEC. 403. OFFICE OF CARBON MARKET OVERSIGHT; JURIS-
DICTION. 
‘‘(a) ESTABLISHMENT OF OFFICE OF CARBON MAR-
KET OVERSIGHT.— 
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129 
‘‘(1) IN GENERAL.—There is established in the 
Federal Energy Regulatory Commission an Office of 
Carbon Market Oversight, which shall be headed by 
a Director for Carbon Market Oversight. The posi-
tion of Director for Carbon Market Oversight shall 
be in addition to the Directors of other offices at the 
Commission. 
‘‘(2) APPOINTMENT OF DIRECTOR.—The Direc-
tor for Carbon Market Oversight shall be appointed 
by the Commission and shall be an individual who 
is, by reason of background and experience in the 
regulation of commodities, securities, or other finan-
cial markets, especially qualified to direct a program 
of oversight of the market in regulated instruments. 
‘‘(b) ADMINISTRATION OF THIS PART.—The Com-
mission, acting through the Director for Carbon Market 
Oversight, shall administer this part. 
‘‘(c) EXCLUSIVE JURISDICTION OVER REGULATED 
INSTRUMENTS
NOT
SUBJECT
TO
THE
SECURITIES 
LAWS.— 
‘‘(1) IN GENERAL.—The Commission shall have 
exclusive jurisdiction over accounts, agreements, and 
transactions 
involving 
a 
regulated 
instrument, 
whether inside or outside the United States, that are 
not subject to the jurisdiction of the Securities and 
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130 
Exchange Commission. The preceding sentence shall 
not supersede or limit the jurisdiction conferred on 
courts of the United States or any State. 
‘‘(2) EXCEPTION.—Notwithstanding paragraph 
(1), nothing in this part shall be construed to limit 
any authority of the Administrator of the Environ-
mental Protection Agency under the Clean Air Act 
(42 U.S.C. 7401 and following). 
‘‘(d) REGULATIONS.—The Commission shall promul-
gate regulations governing the implementation of this part 
not later than 1 year after the date of the enactment of 
this title, and shall revise the regulations from time to 
time thereafter. 
‘‘SEC. 404. REGULATION OF CARBON TRADING. 
‘‘(a) LIMITATION OF CERTAIN ACTIVITIES TO ENTI-
TIES REGISTERED UNDER THIS PART.— 
‘‘(1) CARBON TRADING FACILITY ACTIVITIES.— 
‘‘(A) IN GENERAL.—It shall be unlawful 
for a person to offer to enter into, execute, con-
firm the execution of, or conduct an office or a 
business for the purpose of soliciting, accepting 
an order for, or otherwise dealing in, an agree-
ment, contract, or transaction involving a con-
tract for the purchase or sale of a regulated in-
strument, unless— 
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131 
‘‘(i) the transaction is conducted on or 
subject to the rules of a trading facility 
designated as a registered carbon trading 
facility under section 405(a); 
‘‘(ii) the contract for the purchase or 
sale is executed or consummated by or 
through such a trading facility; and 
‘‘(iii) the contract for the purchase or 
sale is evidenced by a record in writing 
which shows the date, the parties to the 
contract and their addresses, the property 
covered and its price, and the terms of de-
livery. 
‘‘(B) EXCEPTION FOR DERIVATIVE TRANS-
ACTIONS BETWEEN ELIGIBLE CONTRACT PAR-
TICIPANTS.—Subparagraph (A) shall not apply 
to an agreement, contract, or transaction in-
volving only a regulated allowance derivative be-
tween persons who are eligible contract partici-
pants at the time at which the persons enter 
into the agreement, contract, or transaction. 
‘‘(2) BROKER OR DEALER ACTIVITIES.—It shall 
be unlawful for a person to act in the capacity of an 
introducing broker, a dealer, a floor broker, or a 
floor trader, in connection with the purchase or sale 
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132 
of a regulated instrument, unless the person is reg-
istered in that capacity with the Commission, and 
the registration is not suspended, revoked, or ex-
pired. 
‘‘(3) CARBON CLEARING ORGANIZATION ACTIVI-
TIES.— 
‘‘(A) IN GENERAL.—It shall be unlawful 
for an entity, directly or indirectly, to perform 
the functions described in section 402(1) with 
respect to a regulated instrument, unless the 
entity is registered with the Commission as a 
carbon clearing organization under section 
405(c), and the registration is not suspended, 
revoked, or expired. 
‘‘(B) EXCEPTION FOR CLEARING OF DE-
RIVATIVE
TRANSACTIONS
BETWEEN
ELIGIBLE 
CONTRACT
PARTICIPANTS.—Subparagraph (A) 
shall not apply to functions performed with re-
spect to an agreement, contract, or transaction 
involving only a regulated allowance derivative 
between persons who are eligible contract par-
ticipants at the time at which the persons enter 
into the agreement, contract, or transaction. 
‘‘(b) PROHIBITION ON PRICE OR MARKET MANIPU-
LATION, FRAUD, AND FALSE OR MISLEADING STATE-
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MENTS OR REPORTS.—It shall be unlawful for a person, 
directly or indirectly— 
‘‘(1) in connection with a transaction involving 
a regulated instrument, to— 
‘‘(A) use any manipulative or deceptive de-
vice or contrivance in violation of such regula-
tions as the Commission may prescribe to pro-
tect the public interest or consumers; 
‘‘(B) corner or attempt to corner the in-
strument; or 
‘‘(C) cheat or defraud, or attempt to cheat 
or defraud, any other person; 
‘‘(2) for the purpose of creating a false or mis-
leading appearance of active trading in a regulated 
instrument, or a false or misleading appearance with 
respect to the market for such an instrument, to— 
‘‘(A) effect any transaction in the instru-
ment which involves no change in the beneficial 
ownership of the instrument; 
‘‘(B) enter an order for the purchase of 
the instrument, with the knowledge that an 
order or orders of substantially the same size, 
at substantially the same time, and at substan-
tially the same price, for the sale of any such 
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instrument, has been or will be entered by or 
for the same or different parties; or 
‘‘(C) enter an order for the sale of the in-
strument with the knowledge that an order or 
orders of substantially the same size, at sub-
stantially the same time, and at substantially 
the same price, for the purchase of the instru-
ment, has been or will be entered by or for the 
same or different parties; 
‘‘(3) to deliver or cause to be delivered a know-
ingly false, misleading, or inaccurate report con-
cerning information or conditions that affect or tend 
to affect the price of a regulated instrument; 
‘‘(4) to make, or cause to be made, in an appli-
cation, report, or document required to be filed 
under this part or any rule or regulation prescribed 
under this part, a statement which is false or mis-
leading with respect to a material fact, or to omit 
any material fact required to be stated therein or 
necessary to make the statements therein not mis-
leading; or 
‘‘(5) to 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 
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document that contains a false, fictitious, or fraudu-
lent statement or entry, to an entity registered 
under this part acting in furtherance of its official 
duties under this part. 
‘‘(c) PREVENTION OF EXCESSIVE SPECULATION.— 
‘‘(1) IN
GENERAL.—To prevent, decrease, or 
eliminate burdens associated with excessive specula-
tion relating to regulated instruments, the Commis-
sion shall prescribe regulations establishing such po-
sition or transaction limitations and position ac-
countability requirements as the Commission deter-
mines to be necessary with respect to any regulated 
instrument. 
‘‘(2) INAPPLICABILITY TO BONA FIDE HEDGING 
TRANSACTIONS
AND
POSITIONS.—The limitations 
and requirements prescribed under paragraph (1) 
shall not apply to a position or transaction that is 
a bona fide hedging position or transaction, as de-
fined by the Commission consistent with the pur-
poses of this part. 
‘‘(d) LARGE TRADER REPORTING.— 
‘‘(1) 
IDENTIFICATION
REQUIREMENTS
FOR 
LARGE TRADERS.—For the purpose of monitoring 
the effect on the markets of transactions involving a 
substantial volume or a large fair market value or 
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exercise value and for the purpose of otherwise as-
sisting the Commission in the enforcement of this 
part, each large trader shall— 
‘‘(A) provide such information to the Com-
mission as the Commission may by regulation 
prescribe as necessary or appropriate, identi-
fying the large trader and all accounts in or 
through which the large trader effects such a 
transaction; and 
‘‘(B) identify, in accordance with such reg-
ulations as the Commission may prescribe as 
necessary or appropriate, to any broker or deal-
er registered under this part, by or through 
whom the large trader directly or indirectly ef-
fects transactions in regulated instruments, the 
large trader and all accounts directly or indi-
rectly maintained with the broker or dealer by 
the large trader in or through which the trans-
actions are effected. 
‘‘(2) RECORDKEEPING
AND
REPORTING
RE-
QUIREMENTS FOR BROKERS AND DEALERS.— 
‘‘(A) RECORDKEEPING.—Each broker or 
dealer registered under this part shall make 
and keep for prescribed periods such records as 
the Commission, by regulation, deems necessary 
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or appropriate with respect to transactions in 
regulated instruments that— 
‘‘(i) equal or exceed the reporting ac-
tivity level; and 
‘‘(ii) are effected, directly or indi-
rectly— 
‘‘(I) by or through the registered 
broker or dealer of a large trader; 
‘‘(II) for any person that the 
broker or dealer knows is a large 
trader; or 
‘‘(III) for any person that the 
broker or dealer has reason to know is 
a large trader on the basis of trans-
actions effected by or through the 
broker or dealer. 
‘‘(B) REPORTING.—The records required 
under subparagraph (A) shall be available for 
reporting to the Commission on the morning of 
the day following the day the transactions are 
effected, and shall be reported to the Commis-
sion immediately on request by the Director. 
‘‘(3) AGGREGATION RULES.—The Commission 
may prescribe regulations governing the manner in 
which transactions and accounts shall be aggregated 
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138 
for the purpose of this subsection, including aggre-
gation on the basis of common ownership or control. 
‘‘(4) EXAMINATION OF BROKER AND DEALER 
RECORDS.—All records required to be made and 
kept pursuant to this subsection by brokers and 
dealers registered under this part, with respect to 
transactions effected by large traders, are subject at 
any time, or from time to time, to such reasonable 
periodic, special, or other examinations by represent-
atives of the Commission as the Commission deems 
necessary or appropriate in the public interest, for 
the protection of investors, or otherwise in further-
ance of the purposes of this part. 
‘‘(5) FACTORS TO BE CONSIDERED IN COMMIS-
SION ACTIONS.—In carrying out this subsection, the 
Commission shall take into account— 
‘‘(A) existing reporting systems; 
‘‘(B) the costs associated with maintaining 
information with respect to transactions ef-
fected by large traders and reporting the infor-
mation to the Commission; and 
‘‘(C) the relationship between the United 
States and international markets in regulated 
instruments. 
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‘‘(6) EXEMPTIONS.—The Commission, by regu-
lation or order, consistent with the purposes of this 
part, may exempt any person or class of persons or 
any transaction or class of transactions, condi-
tionally, on specified terms and conditions, or for 
stated periods, from the operation of this subsection 
and the regulations prescribed under this subsection. 
‘‘(7) AUTHORITY OF COMMISSION TO LIMIT DIS-
CLOSURE OF INFORMATION.—Notwithstanding any 
other provision of law, the Commission shall not be 
compelled to disclose any information required to be 
kept or reported under this subsection. Nothing in 
this subsection shall authorize the Commission to 
withhold information from Congress, or prevent the 
Commission from complying with a request for infor-
mation from any other Federal department or agen-
cy requesting information for purposes within the 
scope of its jurisdiction, or complying with an order 
of a court of the United States in an action brought 
by the United States or the Commission. For pur-
poses of section 552 of title 5, United States Code, 
this subsection shall be considered a statute de-
scribed in section 552(b)(3)(B). 
‘‘(8) DEFINITIONS.—In this subsection: 
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140 
‘‘(A) LARGE
TRADER.—The term ‘large 
trader’ means every person who, for the per-
son’s own account or an account for which the 
person exercises investment discretion, effects 
transactions for the purchase or sale of a regu-
lated instrument, directly or indirectly by or 
through a broker or dealer registered under this 
part, in an aggregate amount equal to or in ex-
cess of the identifying activity level. 
‘‘(B) IDENTIFYING ACTIVITY LEVEL.—The 
term ‘identifying activity level’ means trans-
actions in regulated instruments at or above a 
level of volume, fair market value, or exercise 
value as shall be fixed from time to time by the 
Commission by regulation, specifying the time 
interval during which the transactions shall be 
aggregated. 
‘‘(C) REPORTING
ACTIVITY
LEVEL.—The 
term ‘reporting activity level’ means trans-
actions in regulated instruments at or above a 
level of volume, fair market value, or exercise 
value as shall be fixed from time to time by the 
Commission by regulation or order, specifying 
the time interval during which the transactions 
shall be aggregated. 
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141 
‘‘(D) PERSON.—The term ‘person’ means 
a natural person, company, government, or po-
litical subdivision, agency, or instrumentality of 
a government, and includes 2 or more persons 
acting as a partnership, limited partnership, 
syndicate, or other group, but does not include 
a foreign central bank. 
‘‘(e) RECORDKEEPING; REPORTING; ACCESS
TO 
BOOKS AND RECORDS.— 
‘‘(1) MEMBERS
OF
REGISTERED
ENTITIES.— 
Each member of an entity registered under this part 
shall— 
‘‘(A) keep books and records, and make 
such reports as are required by the Commis-
sion, regarding the transactions and positions 
of the member, and the transactions and posi-
tions of the customer involved, in regulated in-
struments, in such form and manner, and for 
such period, as may be required by the Com-
mission; and 
‘‘(B) make the books and records available 
for inspection by any representative of the Com-
mission or the Department of Justice. 
‘‘(2) REGISTERED ENTITIES.—Each entity reg-
istered under this part shall— 
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142 
‘‘(A) maintain daily trading records (in-
cluding a time-stamped audit trail), that in-
clude such information, in such form, and for 
such period as the Commission may require by 
regulation; and 
‘‘(B) make such reports from the records, 
at such times and places, and in such form, as 
the Commission may require by regulation to 
protect the public interest and the interest of 
persons trading in regulated instruments. 
‘‘SEC. 405. REGISTRATION OF CARBON TRADING FACILI-
TIES, 
BROKERS, 
DEALERS, 
AND 
CARBON 
CLEARING ORGANIZATIONS. 
‘‘(a) CARBON TRADING FACILITIES.— 
‘‘(1) APPLICATION.—A trading facility may 
apply to the Commission for designation as a reg-
istered carbon trading facility by submitting to the 
Commission an application that contains such infor-
mation and commitments as the Commission may 
require. 
‘‘(2) REQUIREMENTS
FOR
DESIGNATION.—To 
be designated as a registered carbon trading facility, 
the trading facility shall demonstrate to the Com-
mission the following: 
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‘‘(A) PREVENTION OF MARKET MANIPULA-
TION.—The trading facility is capable of pre-
venting market manipulation through market 
surveillance, compliance, and enforcement prac-
tices and procedures, including methods for 
conducting real-time monitoring of trading and 
comprehensive and accurate trade reconstruc-
tions. 
‘‘(B) FAIR
AND
EQUITABLE
TRADING.— 
The trading facility has established, and is ca-
pable of enforcing, rules to ensure fair and eq-
uitable trading through the trading facility, and 
the capacity to detect, investigate, and dis-
cipline any person that violates the rules. 
‘‘(C) ESTABLISHMENT AND ENFORCEMENT 
OF RULES GOVERNING OPERATION OF TRADE 
EXECUTION FACILITY.—The trading facility has 
established, and is capable of enforcing, rules 
governing the manner of operation of the trade 
execution facility maintained by the trading fa-
cility, including the operation of any electronic 
matching platform. 
‘‘(D) FINANCIAL
INTEGRITY
OF
TRANS-
ACTIONS.—The trading facility has established, 
and is capable of enforcing, rules and proce-
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dures for ensuring the financial integrity of 
transactions entered into by or through the 
trading facility, including the clearance and set-
tlement of the transactions. 
‘‘(E) DISCIPLINARY
PROCEDURES.—The 
trading facility has established, and is capable 
of enforcing procedures that authorize the trad-
ing facility to discipline, suspend, or expel mem-
bers or market participants that violate the 
rules of the trading facility, or similar methods 
for performing the same functions, including 
delegation of the functions to third parties. 
‘‘(F) PUBLIC ACCESS.—The trading facil-
ity is capable of providing the public with ac-
cess to the rules, regulations, and contract spec-
ifications of the trading facility. 
‘‘(G) ABILITY TO OBTAIN INFORMATION.— 
The trading facility has established, and is ca-
pable of enforcing rules that allow the trading 
facility to obtain any necessary information to 
perform any of the functions described in this 
paragraph, including the capacity to carry out 
such international information-sharing agree-
ments as the Commission may require. 
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145 
‘‘(3) MAINTENANCE
OF
DESIGNATION.—To 
maintain the designation of a trading facility as a 
registered carbon trading facility, the trading facility 
shall comply (and shall have reasonable discretion in 
establishing the manner in which it complies) with 
the following: 
‘‘(A) COMPLIANCE WITH RULES OF THE 
TRADING FACILITY.—The trading facility shall 
monitor and enforce compliance with the rules 
of the trading facility, including the terms and 
conditions of any contracts to be traded on or 
through the trading facility and any limitations 
on access to the trading facility. 
‘‘(B) CONTRACTS NOT READILY SUBJECT 
TO MANIPULATION.—The trading facility shall 
list on the trading facility only contracts that 
are not readily susceptible to manipulation. 
‘‘(C) MONITORING
OF
TRADING.—The 
trading facility shall monitor trading on or 
through the facility to prevent manipulation, 
price distortion, and disruptions of the delivery 
or cash-settlement process. 
‘‘(D) POSITION LIMITATIONS OR ACCOUNT-
ABILITY.—To reduce the potential threat of 
market manipulation, the trading facility shall 
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146 
adopt position limitations or position account-
ability for speculators, where necessary and ap-
propriate. 
‘‘(E) EMERGENCY AUTHORITY.—The trad-
ing facility shall adopt rules to provide for the 
exercise of emergency authority, in consultation 
or cooperation with the Commission, where nec-
essary and appropriate, including the authority 
to— 
‘‘(i) liquidate or transfer open posi-
tions in any contract; 
‘‘(ii) suspend or curtail trading in any 
regulated instrument; and 
‘‘(iii) require market participants to 
meet special margin requirements. 
‘‘(F) AVAILABILITY OF GENERAL INFOR-
MATION.—The trading facility shall make avail-
able to market authorities, market participants, 
and the public information concerning— 
‘‘(i) the terms and conditions of the 
contracts traded on or through the trading 
facility; and 
‘‘(ii) the mechanisms for executing 
transactions on or through the trading fa-
cility. 
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147 
‘‘(G) DAILY PUBLICATION OF TRADING IN-
FORMATION.—The trading facility shall make 
public daily information on settlement prices, 
volume, open interest, and opening and closing 
ranges for all regulated instruments traded on 
the trading facility. 
‘‘(H) EXECUTION
OF
TRANSACTIONS.— 
The trading facility shall provide a competitive, 
open, and efficient market and mechanism for 
executing transactions on or through the trad-
ing facility. 
‘‘(I) SECURITY OF TRADE INFORMATION.— 
The trading facility shall maintain rules and 
procedures to provide for the recording and safe 
storage of all identifying trade information in a 
manner that enables the trading facility to use 
the information to assist the prevention of cus-
tomer and market abuses and provide evidence 
of violations of the rules of the trading facility. 
‘‘(J) FINANCIAL
INTEGRITY
OF
CON-
TRACTS.—The trading facility shall establish 
and enforce rules providing for the financial in-
tegrity of any contract traded on or through the 
trading facility (including the clearance and set-
tlement of the transactions), and rules to en-
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sure the financial integrity of introducing bro-
kers, dealers, floor brokers, and floor traders 
doing business on or through the trading facil-
ity, and the protection of customer funds. 
‘‘(K) PROTECTION
OF
MARKET
PARTICI-
PANTS.—The trading facility shall establish and 
enforce rules to protect market participants 
from abusive practices committed by any party 
acting as an agent for the participants. 
‘‘(L) DISPUTE RESOLUTION.—The trading 
facility shall establish and enforce rules regard-
ing and provide facilities for alternative dispute 
resolution as appropriate for market partici-
pants and any market intermediaries. 
‘‘(M) 
GOVERNANCE
FITNESS
STAND-
ARDS.—The trading facility shall establish and 
enforce appropriate fitness standards for direc-
tors, members of any disciplinary committee, 
members of the trading facility, and any other 
person with direct access to the trading facility 
(including any parties affiliated with any of the 
persons described in this subparagraph). 
‘‘(N) 
CONFLICTS
OF
INTEREST.—The 
trading facility shall establish and enforce rules 
to minimize conflicts of interest in the decision-
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making process of the trading facility and es-
tablish a process for resolving any such conflict 
of interest. 
‘‘(O) COMPOSITION OF BOARDS OF MUTU-
ALLY
OWNED
TRADING
FACILITIES.—In the 
case of a mutually owned trading facility, the 
trading facility shall ensure that the composi-
tion of the governing board reflects market par-
ticipants. 
‘‘(P) RECORDKEEPING.—The trading facil-
ity shall maintain records of all activities re-
lated to the business of the trading facility in 
a form and manner acceptable to the Commis-
sion for a period of 5 years. 
‘‘(Q) ANTITRUST
CONSIDERATIONS.—Un-
less necessary or appropriate to achieve the 
purposes of this part, the trading facility shall 
endeavor to avoid— 
‘‘(i) adopting any rules or taking any 
actions that result in any unreasonable re-
straints of trade; or 
‘‘(ii) imposing any material anti-
competitive burden on trading on or 
through the trading facility. 
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‘‘(b) BROKERS, DEALERS, AND
THEIR
ASSOCI-
ATES.—The Commission may prescribe regulations gov-
erning— 
‘‘(1) the eligibility of a person to act in the ca-
pacity of an introducing broker, a dealer, or a floor 
broker, or a floor trader in the United States; 
‘‘(2) the registration of introducing brokers, 
dealers, floor brokers, and floor traders with the 
Commission; and 
‘‘(3) the conduct of a person registered pursu-
ant to regulations prescribed under paragraph (2), 
and of a partner, officer, employee, or agent of the 
registered person, in connection with transactions in-
volving a regulated instrument. 
‘‘(c) CARBON CLEARING ORGANIZATIONS.— 
‘‘(1) APPLICATION.—An entity may apply to 
the Commission for registration as a carbon clearing 
organization by submitting to the Director an appli-
cation that contains such information and commit-
ments as the Commission may require for the pur-
pose of making the determinations required for ap-
proval under paragraph (2). 
‘‘(2) REQUIREMENTS FOR REGISTRATION.—To 
be registered and to maintain registration as a car-
bon clearing organization, an applicant shall dem-
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onstrate to the Commission that the applicant com-
plies (and shall have reasonable discretion in estab-
lishing the manner in which it complies) with the 
following core principles: 
‘‘(A) FINANCIAL RESOURCES.—The appli-
cant shall demonstrate that the applicant has 
adequate financial, operational, and managerial 
resources to discharge the responsibilities of a 
carbon clearing organization. 
‘‘(B) PARTICIPANT AND PRODUCT ELIGI-
BILITY.—The applicant shall establish— 
‘‘(i) appropriate admission and con-
tinuing eligibility standards (including ap-
propriate minimum financial requirements) 
for members of and participants in the ap-
plicant; and 
‘‘(ii) appropriate standards for deter-
mining eligibility of agreements, contracts, 
or transactions submitted to the applicant. 
‘‘(C) RISK MANAGEMENT.—The applicant 
shall have the ability to manage the risks asso-
ciated with discharging the responsibilities of a 
carbon clearing organization through the use of 
appropriate tools and procedures. 
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‘‘(D) SETTLEMENT
PROCEDURES.—The 
applicant shall have the ability to— 
‘‘(i) complete settlements on a timely 
basis under varying circumstances; 
‘‘(ii) maintain an adequate record of 
the flow of funds associated with each 
transaction that the applicant clears; and 
‘‘(iii) comply with the terms and con-
ditions of any permitted netting or offset 
arrangements with other carbon clearing 
organizations. 
‘‘(E) TREATMENT OF FUNDS.—The appli-
cant shall have standards and procedures de-
signed to protect and ensure the safety of mem-
ber and participant funds. 
‘‘(F) 
DEFAULT
RULES
AND
PROCE-
DURES.—The applicant shall have rules and 
procedures designed to allow for efficient, fair, 
and safe management of events when members 
or participants become insolvent or otherwise 
default on their obligations to the applicant. 
‘‘(G) RULE
ENFORCEMENT.—The appli-
cant shall— 
‘‘(i) maintain adequate arrangements 
and resources for the effective monitoring 
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and enforcement of compliance with rules 
of the applicant and for resolution of dis-
putes; and 
‘‘(ii) have the authority and ability to 
discipline, limit, suspend, or terminate the 
activities of a member or participant for 
violations of rules of the applicant. 
‘‘(H) SYSTEM
SAFEGUARDS.—The appli-
cant shall demonstrate that the applicant— 
‘‘(i) has established and will maintain 
a program of oversight and risk analysis to 
ensure that the automated systems of the 
applicant function properly and have ade-
quate capacity and security; and 
‘‘(ii) has established and will maintain 
emergency procedures and a plan for dis-
aster recovery, and will periodically test 
backup facilities sufficient to ensure daily 
processing, clearing, and settlement of 
transactions. 
‘‘(I) REPORTING.—The applicant shall pro-
vide to the Director all information necessary 
for the Commission to conduct oversight of the 
activities of the applicant. 
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‘‘(J) 
RECORDKEEPING.—The 
applicant 
shall maintain for a period of 5 years records 
of all activities related to the activities of the 
applicant as a carbon clearing organization in a 
form and manner acceptable to the Commis-
sion. 
‘‘(K) PUBLIC
INFORMATION.—The appli-
cant shall make information concerning the 
rules and operating procedures governing the 
clearing and settlement systems (including de-
fault procedures) available to market partici-
pants. 
‘‘(L) INFORMATION-SHARING.—The appli-
cant shall— 
‘‘(i) enter into and abide by the terms 
of all appropriate and applicable domestic 
and 
international 
information-sharing 
agreements; and 
‘‘(ii) use relevant information obtained 
from the agreements in carrying out the 
risk management program of the applicant. 
‘‘(M) ANTITRUST CONSIDERATIONS.—Un-
less appropriate to achieve the purposes of this 
part, the applicant shall avoid— 
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‘‘(i) adopting any rule or taking any 
action that results in any unreasonable re-
straint of trade; or 
‘‘(ii) imposing any material anti-
competitive burden on trading on a reg-
istered carbon trading facility. 
‘‘SEC. 406. ADMINISTRATIVE ENFORCEMENT. 
‘‘(a) INVESTIGATIONS.— 
‘‘(1) IN GENERAL.—The Commission may make 
such investigations as the Commission deems nec-
essary to determine whether any person has violated, 
is violating, or is about to violate this part, a regula-
tion or order issued under this part, or a rule of an 
entity registered under this part, or to secure infor-
mation which may serve as a basis for recom-
mending legislation concerning matters to which this 
part relates. In conducting any such investigation, 
the Commission may request the assistance of ap-
propriate Federal agencies. 
‘‘(2) PUBLICATION OF RESULTS.—The Commis-
sion may publish the results of any such investiga-
tion and such general statistical information gath-
ered in the investigation as the Commission deems 
of interest to the public. 
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‘‘(3) PUBLIC
DISCLOSURE
OF
INFORMATION 
AND DATA.— 
‘‘(A) IN GENERAL.—The Commission may 
not publish data and information that would 
separately disclose a transaction or market po-
sition of any person, a trade secret, or the 
names of a customer, except where the disclo-
sure is made in connection with a congressional 
proceeding or in an administrative or judicial 
proceeding brought under this part. 
‘‘(B) AUTHORITY TO WITHHOLD INFORMA-
TION.—The Commission may withhold from 
public disclosure any data or information con-
cerning or obtained in connection with any 
pending investigation of any person under this 
part. 
‘‘(4) DISCLOSURE OF REGISTRATION INFORMA-
TION
TO
OTHER
GOVERNMENT
ENTITIES.—The 
Commission shall provide any registration informa-
tion maintained by the Commission under this part 
on any registrant on reasonable request made by any 
department or agency of any State or any political 
subdivision of a State. Whenever the Administrator 
determines that such information may be appro-
priate for use by any department or agency of a 
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State or political subdivision of a State, the Commis-
sion shall provide such information without request. 
‘‘(b) REVIEW OF ADVERSE ACTION BY REGISTERED 
CARBON TRADING FACILITY.— 
‘‘(1) IN GENERAL.— 
‘‘(A) DISCIPLINARY ACTIONS.—The Com-
mission may, in accordance with such standards 
and procedures as the Commission deems ap-
propriate, review a decision by a registered car-
bon trading facility to suspend, expel, otherwise 
discipline a member of the trading facility, or 
deny access to the trading facility. 
‘‘(B) OTHER ACTIONS.—On application of 
any person who is adversely affected by any 
other registered carbon trading facility decision, 
the Commission may review the decision and 
issue such order with respect to the decision as 
the Commission deems appropriate to protect 
the public interest. 
‘‘(2) SCOPE OF AUTHORITY.—The Commission 
may affirm, modify, set aside, or remand a trading 
facility decision reviewed under paragraph (1), after 
a determination on the record as to whether the de-
cision was made in accordance with the rules of the 
trading facility. 
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‘‘(c) ENFORCEMENT PROCEEDINGS AGAINST CER-
TAIN PERSONS.— 
‘‘(1) SERVICE OF COMPLAINT.—If the Commis-
sion has reason to believe that a person (other than 
a registered carbon trading facility or carbon clear-
ing organization) has violated this part or a regula-
tion or order issued under this part, the Commission 
may serve upon the person a complaint stating the 
charges of the Commission in that respect, which 
complaint shall have attached or contain a notice of 
hearing, specifying a day and place not less than 3 
days after the service of the complaint, requiring the 
person to show cause why an order should not be 
made prohibiting the person from trading on or sub-
ject to the rules of any registered carbon trading fa-
cility, and directing that all such trading facilities 
refuse all privileges to the person, until further no-
tice of the Commission and to show cause why the 
registration of the person, if registered with the 
Commission in any capacity, should not be sus-
pended or revoked. 
‘‘(2) INVESTIGATORY POWERS.— 
‘‘(A) IN GENERAL.—For the purpose of se-
curing effective enforcement of this part, and 
for the purpose of any investigation or pro-
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ceeding under this part, the Commission (ex-
cept as provided in subparagraph (C)) may ad-
minister oaths and affirmations, subpoena wit-
nesses, compel their attendance, take evidence, 
and require the production of any books, pa-
pers, correspondence, memoranda, or other 
records that the Commission deems relevant or 
material to the inquiry. 
‘‘(B) AUTHORITY
TO
COMPEL
ATTEND-
ANCE
OF
WITNESSES, AND
PRODUCTION
OF 
RECORDS.—The attendance of witnesses and 
the production of records may be required from 
any place in the United States, any State or 
any foreign country or jurisdiction at any des-
ignated place of hearing. 
‘‘(C) EFFECT OF FAILURE TO OBEY SUB-
POENA.— 
‘‘(i) AUTHORITY TO SEEK COURT AS-
SISTANCE.—In case of contumacy by, or 
refusal to obey a subpoena issued to, any 
person, the Commission may invoke the aid 
of any court of the United States in the ju-
risdiction in which the investigation or pro-
ceeding is conducted, or where the person 
resides or transacts business, in requiring 
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the attendance and testimony of witnesses 
and the production of books, papers, cor-
respondence, 
memoranda, 
and 
other 
records. 
‘‘(ii) REMEDIES.— 
‘‘(I) IN
GENERAL.—The court 
may issue an order requiring the per-
son to appear before the Commission 
or an Administrative Law Judge or 
other officer designated by the Com-
mission, there to produce records, if 
so ordered, or to give testimony touch-
ing the matter under investigation or 
in question. 
‘‘(II) EFFECT
OF
FAILURE
TO 
OBEY COURT ORDER.—Any failure to 
obey the order of the court may be 
punished by the court as a contempt 
of the court. 
‘‘(3) PENALTIES.— 
‘‘(A) Upon evidence received in a pro-
ceeding under paragraph (1), the Commission 
may issue an order— 
‘‘(i) prohibiting the person from trad-
ing on or subject to the rules of any reg-
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istered carbon trading facility, and requir-
ing all such facilities to refuse the person 
all privileges for such period as may be 
specified in the order; 
‘‘(ii) if the person is registered with 
the Commission in any capacity, sus-
pending, for a period of not more than 6 
months, or revoking, the registration of the 
person; 
‘‘(iii) assessing the person, in accord 
with the gravity of the violation, a civil 
penalty of not more than the greater of 
$100,000 or triple the monetary gain to 
the person for each such violation; and 
‘‘(iv) requiring restitution to cus-
tomers of damages proximately caused by 
the violation. 
‘‘(B) AMOUNT OF CIVIL PENALTY BASED 
ON
GRAVITY
OF
VIOLATION.—In determining 
the amount of the money penalty, if any, to be 
assessed under subparagraph (A)(iii), the Com-
mission shall consider the appropriateness of 
the penalty to the gravity of the violation. 
‘‘(C) NOTICE
OF
ORDER.—The Commis-
sion shall send notice of the order forthwith by 
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162 
registered mail or by certified mail, or deliver 
the notice to the offending person and the gov-
erning board of each registered carbon trading 
facility. 
‘‘(4) APPEALS.—A petition for review of an 
order issued under paragraph (3) of this subsection 
may be filed in the Court of Appeals for the District 
of Columbia Circuit. 
‘‘(d) AUTHORITY TO SUSPEND OR REVOKE REG-
ISTERED CARBON TRADING FACILITY DESIGNATION OR 
CARBON CLEARING ORGANIZATION REGISTRATION.—The 
Commission may suspend for a period of not more than 
6 months, or revoke, the designation of a trading facility 
as a registered carbon trading facility, or the registration 
of an entity as a carbon clearing organization, if, after 
notice and opportunity for a hearing on the record, the 
Commission finds that— 
‘‘(1) the trading facility or the entity, as the 
case may be, has not complied with a requirement 
of section 405(a)(3), or section 405(c)(2), as the 
case may be; or 
‘‘(2) a director, officer, employee, or agent of 
the trading facility or entity, as the case may be, has 
violated this part or a regulation or order issued 
under this part. 
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163 
‘‘(e) CEASE AND DESIST ORDERS.—If the Commis-
sion finds that a person has violated this part or a regula-
tion or order issued under this part, the Commission may, 
in conjunction with an order issued against the person 
under subsection (c)(1), after notice and opportunity for 
a hearing on the record, and subject to appeal as provided 
for in subsection (c)(4), issue an order directing the per-
son to cease and desist from the violation. 
‘‘(f) TRADING SUSPENSIONS; EMERGENCY AUTHOR-
ITY.— 
‘‘(1) TRADING SUSPENSIONS.—If the Commis-
sion determines that the public interest so requires, 
the Commission may, by order, summarily suspend 
all trading of regulated instruments on any trading 
facility or otherwise, for a period not exceeding 90 
calendar days. The action described in the preceding 
sentence shall not take effect unless the Commission 
notifies the President of the decision of the Commis-
sion, and the President notifies the Commission that 
the President does not disapprove of the decision. 
‘‘(2) EMERGENCY ORDERS.— 
‘‘(A) IN GENERAL.—The Commission, in 
an emergency, may by order summarily take 
such action to alter, supplement, suspend, or 
impose requirements or restrictions with respect 
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164 
to any matter or action subject to regulation by 
the Commission or an entity registered under 
this part, as the Commission determines is nec-
essary in the public interest— 
‘‘(i) to maintain or restore fair and 
orderly markets in regulated instruments; 
or 
‘‘(ii) to ensure prompt, accurate, and 
safe clearance and settlement of trans-
actions in regulated instruments. 
‘‘(B) EFFECTIVE
PERIOD.—An order of 
the Commission under this paragraph shall con-
tinue in effect for the period specified by the 
Commission, and may be extended. Except as 
provided in subparagraph (C), an order of the 
Commission under this paragraph may not con-
tinue in effect for more than 10 business days, 
including extensions. 
‘‘(C) EXTENSION.—An order of the Com-
mission under this paragraph may be extended 
to continue in effect for more than 10 business 
days if, at the time of the extension, the Com-
mission finds that the emergency still exists and 
determines that the continuation of the order 
beyond 10 business days is necessary in the 
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165 
public interest and for the protection of inves-
tors to attain an objective described in clause 
(i) or (ii) of subparagraph (A). In no event 
shall an order of the Commission under this 
paragraph continue in effect for more than 30 
calendar days. 
‘‘(D) EXEMPTION.—In exercising the au-
thority provided by this paragraph, the Com-
mission shall not be required to comply with 
section 553 of title 5, United States Code. 
‘‘(3) TERMINATION
OF
EMERGENCY
ACTIONS 
BY PRESIDENT.—The President may direct that ac-
tion taken by the Commission under paragraph (2) 
shall not continue in effect. 
‘‘(4) COMPLIANCE WITH ORDERS.—A member 
of a trading facility, introducing broker, dealer, floor 
broker, or floor trader shall not effect any trans-
action in, or induce the purchase or sale of, any reg-
ulated instrument in contravention of an order of 
the Commission under this subsection, unless the 
order has been stayed, modified, or set aside as pro-
vided in paragraph (5) or has ceased to be effective 
on direction of the President as provided in para-
graph (3). 
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‘‘(5) LIMITATIONS ON REVIEW OF ORDERS.— 
An order of the Commission pursuant to this sub-
section shall be subject to review by the United 
States Court of Appeals for the District of Columbia 
Circuit. Review shall be based on an examination of 
all the information before the Commission at the 
time the order was issued. The reviewing court shall 
not enter a stay, writ of mandamus, or similar relief 
unless the court finds, after notice and hearing be-
fore a panel of the court, that the Commission’s ac-
tion is arbitrary, capricious, an abuse of discretion, 
or otherwise not in accordance with law. 
‘‘(6) EMERGENCY
DEFINED.—In this sub-
section, the term ‘emergency’ means— 
‘‘(A) a major market disturbance charac-
terized by or constituting— 
‘‘(i) sudden and excessive fluctuations 
of prices of regulated instruments gen-
erally, or a substantial threat thereof, that 
threaten fair and orderly markets; or 
‘‘(ii) a substantial disruption of the 
safe or efficient operation of the national 
system for clearance and settlement of 
transactions in regulated instruments, or a 
substantial threat thereof; or 
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167 
‘‘(B) a major disturbance that substan-
tially disrupts, or threatens to substantially dis-
rupt— 
‘‘(i) the functioning of markets in reg-
ulated instruments, or any significant por-
tion or segment of the markets; or 
‘‘(ii) the transmission or processing of 
transactions in regulated instruments. 
‘‘(g) OTHER AUTHORITY TO ISSUE ORDERS.—The 
Commission may issue such other orders as may be nec-
essary to ensure compliance with this part or a regulation 
prescribed under this part. 
‘‘SEC. 407. CIVIL JUDICIAL ENFORCEMENT. 
‘‘(a) IN GENERAL.—If it appears to the Commission 
that a person has engaged, is engaging, or is about to en-
gage in any act or practice constituting a violation of this 
part or a regulation or order issued under this part, the 
Commission may bring an action in the appropriate dis-
trict court of the United States or United States court 
of any territory or other place subject to the jurisdiction 
of the United States, to enjoin the act or practice, or to 
enforce compliance with this part or a regulation or order 
issued under this part. 
‘‘(b) FORMS OF RELIEF.— 
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168 
‘‘(1) 
INJUNCTIVE
RELIEF; 
RESTRAINING 
ORDER.—On a proper showing, the court shall grant 
a permanent or temporary injunction or issue a re-
straining order, without bond. 
‘‘(2) CIVIL MONEY PENALTY.— 
‘‘(A) IN GENERAL.—The Commission may 
seek and the court, on a proper showing, shall 
have jurisdiction to impose on any person found 
in the action brought under this section to have 
committed a violation a civil penalty in an 
amount that is not more than the greater of 
$100,000 or triple the monetary gain to the 
person for the violation. 
‘‘(B) ENFORCEMENT OF PENALTY BY THE 
ATTORNEY
GENERAL.—If a person on whom 
such a penalty is imposed fails to pay the pen-
alty within the time prescribed in the order of 
the court, the Commission may refer the matter 
to the Attorney General who shall recover the 
penalty by action in the appropriate United 
States district court. 
‘‘SEC. 408. CRIMINAL ENFORCEMENT. 
‘‘(a) VIOLATIONS GENERALLY.—Whoever knowingly 
violates section 404 or any regulation promulgated under 
section 404, or willfully violates any other provision of this 
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169 
part or a regulation issued under this part the violation 
of which is made unlawful or the observance of which is 
required by or under this part, shall be fined not more 
than $1,000,000 (or not more than $500,000, if the viola-
tor is an individual), imprisoned not more than 5 years, 
or both, and shall pay the costs of prosecution. 
‘‘(b) FAILURE TO COMPLY WITH CEASE AND DESIST 
ORDER.— 
‘‘(1) IN GENERAL.—If, after the period allowed 
for appeal of an order issued under section 406(e) 
or after the affirmance of such an order, a person 
subject to the order fails or refuses to comply with 
the order, the person shall be— 
‘‘(A) fined not more than the greater of 
$100,000 or triple the monetary gain to the 
person, imprisoned not less than 6 months nor 
more than 1 year, or both; or 
‘‘(B) if the failure or refusal to comply in-
volves a violation referred to in subsection (a) 
of this section, shall be subject to the penalties 
provided in such subsection for the violation. 
‘‘(2) SPECIAL RULE.—Each day during which a 
failure or refusal to comply with such an order con-
tinues is deemed a separate offense for purposes of 
paragraph (1). 
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170 
‘‘SEC. 409. MARKET REPORTS. 
‘‘(a) COLLECTION
AND ANALYSIS
OF INFORMA-
TION.—The Commission shall, on a continuous basis, col-
lect and analyze the following information on the func-
tioning of the markets for regulated instruments estab-
lished under this part: 
‘‘(1) The status of, and trends in, the markets, 
including prices, trading volumes, transaction types, 
and trading channels and mechanisms. 
‘‘(2) Spikes, collapses, and volatility in prices of 
regulated instruments, and the causes therefor. 
‘‘(3) The relationship between the market for 
emission allowances, offset credits, and allowance de-
rivatives, and the spot and futures markets for en-
ergy commodities, including electricity. 
‘‘(4) 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 has identified, 
and the effectiveness of corrective measures under-
taken by the Commission to address the fraud or 
manipulation, or threat. 
‘‘(5) The economic effects of the markets, in-
cluding to macro- and micro-economic effects of un-
expected significant increases and decreases in the 
price of regulated instruments. 
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‘‘(6) Any changes in the roles, activities, or 
strategies of various market participants. 
‘‘(7) Regional, industrial, and consumer re-
sponses to the market, and energy investment re-
sponses to the markets. 
‘‘(8) Any other issue related to the markets 
that the Commission deems appropriate. 
‘‘(b) QUARTERLY REPORTS TO THE CONGRESS.— 
Not later than 1 month after the end of each calendar 
quarter, the Commission shall submit to the President, the 
Committee on Energy and Commerce of the House of 
Representatives, and the Committee on Environment and 
Public Works of the Senate, and make available to the 
public, a report on the matters described in subsection (a) 
with respect to the quarter, including recommendations 
for any administrative or statutory measures the Commis-
sion considers necessary to address any threats to the 
transparency, fairness, or integrity of the markets in regu-
lated instruments. 
‘‘SEC. 410. APPLICATION OF OTHER PROVISIONS. 
‘‘The provisions of sections 3, 306 through 308, and 
313 through 317 of this Act shall not apply to the admin-
istration or enforcement of this part.’’. 
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172 
TITLE III—INVESTING IN AMER-
ICA’S LOW-CARBON FUTURE 
Subtitle A—Climate Trust Tax 
Credits and Rebates 
SEC. 301. PURPOSE. 
The purpose of this subtitle is to distribute proceeds 
from emission allowance auctions under title VII of the 
Clean Air Act (as added by section 101 of this Act) to 
middle- and low-income households, through refundable 
tax credits for wage earners and senior citizens and 
monthly rebates to low-income citizens, to offset any in-
creased direct or indirect energy costs such households 
may experience as a result of the regulation of greenhouse 
gas emissions. 
SEC. 302. CLIMATE TRUST TAX CREDIT FOR WORKING FAM-
ILIES AND SENIOR CITIZENS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by redes-
ignating section 36 as section 37 and by inserting after 
section 35 the following new section: 
‘‘SEC. 36. CLIMATE TRUST TAX CREDIT. 
‘‘(a) IN GENERAL.—In the case of an eligible indi-
vidual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount 
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173 
equal to the energy cost increase attributable to carbon 
regulation. 
‘‘(b) ENERGY COST INCREASE ATTRIBUTABLE TO 
CARBON REGULATION.—For purposes of this section— 
‘‘(1) IN GENERAL.—The energy cost increase 
attributable to carbon regulation for any taxable 
year shall be an amount equal to the applicable per-
centage of the base projected energy cost increase. 
‘‘(2) APPLICABLE PERCENTAGE.—The applica-
ble percentage shall be determined in accordance 
with the following table: 
‘‘In the case of: 
With: 
The ap-
plicable 
percent-
age is: 
An eligible individual making a 
joint return ...........................
No qualifying children .............
140 
1 qualifying child .....................
170 
2 or more qualifying children ..
200 
An eligible individual not mak-
ing a joint return ..................
No qualifying children .............
1 qualifying child .....................
140 
2 qualifying children ................
170 
‘‘(3) BASE
PROJECTED
ENERGY
COST
IN-
CREASE.—The term ‘base projected energy cost in-
crease’ means the base projected cost increase in ef-
fect under the Climate Trust Rebate Program (sec-
tion 303 of the Investing in Climate Action and Pro-
tection Act) for the calendar in which the taxable 
year of the taxpayer begins. 
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‘‘(c) LIMITATIONS.— 
‘‘(1) PHASE-IN.—In the case of a taxpayer with 
earned income for the taxable year of less than 
$8,000, the amount allowed as a credit under sub-
section (a) shall not exceed the amount which bears 
the same ratio to the amount which would be so al-
lowed as— 
‘‘(A) the earned income of the taxpayer for 
the taxable year, bears to 
‘‘(B) $8,000. 
‘‘(2) PHASE-OUT.— 
‘‘(A) IN
GENERAL.—The amount which 
would (but for this paragraph) be allowed as a 
credit under subsection (a) shall be reduced 
(but not below zero) by the amount determined 
under subparagraph (B). 
‘‘(B) 
AMOUNT
OF
REDUCTION.—The 
amount determined under this subparagraph is 
the amount which bears the same ratio to the 
amount which would be so allowed as— 
‘‘(i) the excess of— 
‘‘(I) 
the 
taxpayer’s 
adjusted 
gross income (or, if greater, earned 
income) for the taxable year, over 
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‘‘(II) 
the 
applicable 
amount, 
bears to 
‘‘(ii) the applicable denominator. 
‘‘(C) APPLICABLE
AMOUNT; APPLICABLE 
NUMERATOR.—The applicable amount and ap-
plicable denominator shall be determined in ac-
cordance with the following table: 
‘‘In the case of: 
The ap-
plicable 
amount 
is: 
The ap-
plicable 
denomi-
nator is: 
An eligible individual making a joint return ..........
$70,000 
$40,000 
An eligible individual with one or more qualifying 
children and not making a joint return ..............
$50,000 
$30,000 
Any other eligible individual ...................................
$30,000 
$20,000 
‘‘(d) DEFINITIONS AND SPECIAL RULES.— 
‘‘(1) ELIGIBLE INDIVIDUAL.—For purposes of 
this section— 
‘‘(A) IN GENERAL.—The term ‘eligible in-
dividual’ means, with respect to a taxable year, 
any individual who— 
‘‘(i) has earned income for such tax-
able year, and 
‘‘(ii) is not a dependent for whom a 
deduction is allowable under section 151 to 
another taxpayer for any taxable year be-
ginning in the same calendar year as such 
taxable year. 
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176 
‘‘(B) 
CERTAIN
ELIGIBLE
INDIVIDUAL 
RULES
MADE
APPLICABLE.—Rules similar to 
the rules of subparagraphs (B) through (F) of 
section 32(c)(1) shall apply. 
‘‘(2) EARNED
INCOME
QUALIFYING
CHILD.— 
For purposes of this section, the term ‘earned in-
come’ shall have the meaning given such term by 
section 32(c). 
‘‘(3) QUALIFYING CHILD.—For purposes of this 
section, the term ‘qualifying child’ shall have the 
meaning given such term by section 24. 
‘‘(4) MARRIED INDIVIDUALS.—In the case of an 
individual who is married (within the meaning of 
section 7703), this section shall apply only if a joint 
return is filed for the taxable year under section 
6103. 
‘‘(5) COORDINATION WITH CLIMATE TRUST RE-
BATE PROGRAM.— 
‘‘(A) IN
GENERAL.—The amount which 
would be allowed as a credit to a taxpayer 
under subsection (a) shall, before the applica-
tion of subsection (c), be reduced (but not 
below zero) by the amounts received by the tax-
payer under the Climate Trust Rebate Program 
under section 303 of the Investing in Climate 
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177 
Action and Protection Act for months beginning 
in the taxable year. 
‘‘(B) ALLOCATION OF CLIMATE TRUST RE-
BATES.—For purposes of this subparagraph, in 
the case of 2 or more eligible individuals who 
are members of the same household (as defined 
for purposes of the Climate Trust Rebate Pro-
gram) with respect to which an amount is re-
ceived under such program for any month, for 
each such month beginning in the taxable year 
such an individual shall be treated as receiving 
an amount equal to— 
‘‘(i) the amount received with respect 
to such household for such month, divided 
by 
‘‘(ii) the number of eligible individuals 
who are members of such household at the 
beginning of such month. 
‘‘(e) SENIOR CITIZENS CLIMATE TRUST CREDIT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
with qualifying retirement income for the taxable 
year, the taxpayer may elect to apply subsections (c) 
and (d)(1) by substituting ‘qualifying retirement in-
come’ for ‘earned income’. 
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178 
‘‘(2) LIMITATION.—If the taxpayer makes the 
election described in paragraph (1) for the taxable 
year, the amount allowed as a credit under sub-
section (a) for such taxable year shall not exceed an 
amount equal to 55 percent of the amount which 
would (but for this paragraph) be so allowed. 
‘‘(3) QUALIFYING
INCOME.—For purposes of 
this section, the term ‘qualifying retirement income’ 
means— 
‘‘(A) a distribution (other than a rollover) 
from— 
‘‘(i) a plan described in section 401(a) 
which includes a trust exempt from tax 
under section 501(a), 
‘‘(ii) an annuity plan described in sec-
tion 403(a), 
‘‘(iii) an annuity contract described in 
section 403(b), 
‘‘(iv) an individual retirement account 
described in section 408(a), 
‘‘(v) an individual retirement annuity 
described in section 408(b), 
‘‘(vi) a Roth IRA (as defined in 
408A(b)), 
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179 
‘‘(vii) an eligible deferred compensa-
tion plan (as defined in section 457), 
‘‘(viii) a governmental plan (as de-
fined in section 414(d)), 
‘‘(ix) a trust described in section 
501(c)(18), or 
‘‘(x) any other plan, contract, account, 
annuity, or trust which, at any time, has 
been determined by the Secretary to be 
such a plan, contract, account, annuity, or 
trust, 
‘‘(B) social security benefits (within the 
meaning of section 86(d)), 
‘‘(C) any compensation or pension received 
under chapter 11, chapter 13, or chapter 15 of 
title 38, United States Code, and 
‘‘(D) any other amount received which is 
in the nature of a retirement benefit payment.’’. 
(b) 
APPROPRIATIONS
FOR
REFUND.—Section 
1324(b)(2) of title 31, United States Code, is amended 
by striking ‘‘or 53(e)’’ and inserting ‘‘, 53(e), or 36’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1 
of such Code is amended by striking the item relating to 
section 36 and inserting the following new items: 
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180 
‘‘Sec. 36. Climate trust tax credit. 
‘‘Sec. 37. Overpayments of tax.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
SEC. 303. CLIMATE TRUST REBATES FOR LOW-INCOME 
HOUSEHOLDS. 
(a) DEFINITIONS.—For purposes of this section: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency or, if the President des-
ignates an alternative agency under subsection 
(b)(1), the head of such agency. 
(2) BASE
PROJECTED
COST
INCREASE.—The 
term ‘‘base projected cost increase’’ means an 
amount equal to the projected average annual in-
crease, for a year in direct and indirect energy costs 
for a 1-person household in the middle quintile of 
the income scale, that results from the regulation of 
greenhouse gas emissions under title VII of the 
Clean Air Act (as added by section 101 of this Act), 
provided that each quintile shall— 
(A) be based on income adjusted for house-
hold size; and 
(B) have an equal aggregate number of in-
dividuals. 
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181 
(3) ELDERLY
OR
DISABLED
MEMBER.—The 
term ‘‘elderly or disabled member’’ has the meaning 
given such term in section 3 of the Food Stamp Act 
of 1977 (7 U.S.C. 2012). 
(4) ELECTRONIC BENEFIT TRANSFER CARD.— 
The term ‘‘electronic benefit transfer card’’ means a 
card that makes a rebate provided under the Pro-
gram accessible to a household through an Elec-
tronic Benefits Transfer System. 
(5) ELECTRONIC
BENEFIT
TRANSFER
SYS-
TEM.—The term ‘‘Electronic Benefit Transfer Sys-
tem’’ means a system by which rebates provided 
under the Program are issued from and stored in a 
central databank by means of electronic benefit 
transfer cards. 
(6) 
HOUSEHOLD.—The 
term 
‘‘household’’ 
means— 
(A) an individual who lives alone; or 
(B) a group of individuals who live to-
gether. 
(7) STATE.—The term ‘‘State’’ means any of 
the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, American Samoa, 
the United States Virgin Islands, Guam, or the 
Commonwealth of the Northern Mariana Islands. 
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182 
(8) STATE AGENCY.—The term ‘‘State agency’’ 
means— 
(A) an agency of a State (including the 
local offices of such agency) that has the re-
sponsibility for the administration of federally 
aided public assistance programs in such State; 
or 
(B) in a State in which such programs are 
operated on a decentralized basis, the cor-
responding local agencies that administer such 
programs. 
(b) CLIMATE TRUST REBATE PROGRAM.— 
(1) FORMULATION
AND
ADMINISTRATION
OF 
PROGRAM.—The Administrator of the Environ-
mental Protection Agency, or the head of such other 
Executive agency (as defined in section 105 of title 
5 of the United States Code) as the President may 
designate, shall formulate and administer in accord-
ance with this section a program to be known as the 
‘‘Climate Trust Rebate Program’’ (in this section re-
ferred to as the ‘‘Program’’). 
(2) STATE PARTICIPATION IN THE PROGRAM.— 
At the request of a State, eligible households in such 
State shall be provided an opportunity to receive 
compensation through the issuance of a rebate in ac-
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183 
cordance with this section for increased energy re-
lated costs resulting from compliance with the re-
quirements of title VII of the Clean Air Act. 
(3) FUNDING.—Rebates under this section shall 
be funded from the Climate Trust Rebate Fund es-
tablished under section 722(a) of the Clean Air Act. 
Such funds shall be available for expenditure, with-
out further appropriation or fiscal year limitation, to 
carry out this section. 
(c) ELIGIBILITY.—Subject to subsection (d), a house-
hold shall be eligible to participate in the Program if the 
State agency designated by the chief executive officer of 
such State to carry out the Program in such State deter-
mines that— 
(1) such household contains 1 or more individ-
uals who participate in the food stamp program 
under the Food Stamp Act of 1977 (7 U.S.C. 2011 
et seq.); or 
(2) such household, without regard to whether 
such household includes an elderly or disabled mem-
ber, meets— 
(A) the gross income standard described in 
section 5(c)(2) of the Food Stamp Act of 1977 
(7 U.S.C. 2014(c)(2)); and 
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184 
(B) the financial resources limit described 
in section 5(g) the Food Stamp Act of 1977 (7 
U.S.C. 2014(g)). 
(d) LIMITATIONS.—The Administrator shall establish 
procedures to ensure that— 
(1) individuals who are not— 
(A) citizens or nationals of the United 
States; or 
(B) immigrants lawfully residing in the 
United States; 
are excluded for the purpose of calculating rebates 
under subsection (e); and 
(2) households do not receive more than 1 re-
bate per month. 
(e) REBATE CALCULATION.— 
(1) BASE
PROJECTED
COST
INCREASE.—Not 
later than October 1 of 2009, and of each subse-
quent calendar year, the Administrator of the En-
ergy Information Administration shall calculate and 
publish the base projected cost increase for the fol-
lowing year. 
(2) MAXIMUM
REBATE
AMOUNT.—The max-
imum rebate amount for each month of a calendar 
year shall be— 
(A) set by the Administrator; and 
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185 
(B) equal to 1⁄12 of— 
(i) 90 percent of the base projected 
cost increase for a household containing 1 
individual; 
(ii) 140 percent of the base projected 
cost increase for a household containing 2 
individuals; 
(iii) 170 percent of the base projected 
cost increase for a household containing 3 
individuals; and 
(iv) 200 percent of the base projected 
cost increase for a household containing 4 
or more individuals. 
(3) MONTHLY
REBATE
AMOUNTS.—Eligible 
households shall receive a monthly rebate calculated 
in the following manner: 
(A) A household with gross income, as de-
termined in the manner provided in section 5 of 
the Food Stamp Act of 1977 (7 U.S.C. 2014), 
that is less than 50 percent of the poverty line 
shall receive the maximum rebate amount for a 
household of equal size. 
(B) A household with gross income, as de-
termined in the manner provided in section 5 of 
the Food Stamp Act of 1977 (7 U.S.C. 2014), 
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186 
that is not less than 50 percent of the poverty 
line and not more than 130 percent of the pov-
erty line shall receive a rebate in an amount de-
termined in accordance with a schedule of 
phase-down rates based on household size, es-
tablished by the Administrator and specifying 
the amount by which the otherwise applicable 
maximum rebate amount shall be reduced for 
each dollar by which such gross income exceeds 
50 percent of the poverty line. The phase-down 
rate shall be— 
(i) for household sizes of 4 or fewer 
individuals, equal to the maximum rebate 
amount divided by 80 percent of the pov-
erty line applicable to the particular house-
hold size involved; and 
(ii) for household sizes of 5 or more 
individuals, equal to a rate determined in 
accordance with a methodology established 
by the Administrator. 
(C) Households with gross income exceed-
ing 130 percent of the poverty line shall not be 
eligible to receive a rebate under the Program. 
(f) SCHEDULE AND STANDARDS FOR IMPLEMENTA-
TION OF PROGRAM.—The Administrator shall establish by 
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187 
rule a schedule and standards to implement the Program. 
Such standards shall— 
(1) specify the required level of household pro-
tection regarding privacy, ease of rebate use, and ac-
cess to the rebates under the Program; 
(2) prohibit the imposition of any fee on a 
household for the withdrawal or expenditure of any 
part of such rebates; 
(3) require States participating in the Program 
to provide such rebates to recipient households 
through an Electronic Benefit Transfer System or 
by direct deposits into accounts established by 
household members at financial institutions; and 
(4) provide for the interoperability of the Pro-
gram among States and among law enforcement au-
thorities that monitor compliance with the Program. 
(g) STATE ADMINISTRATION OF PROGRAM.—A par-
ticipating State, and the State agency designated under 
subsection (b), shall be responsible for— 
(1) certifying the eligibility of households to re-
ceive rebates under the Program; and 
(2) issuance and control of rebates, and ac-
countability therefor. 
(h) REIMBURSEMENT
OF STATE ADMINISTRATIVE 
COSTS.—Subject to standards established by the Adminis-
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188 
trator, the Administrator shall reimburse each partici-
pating State as follows for administrative costs incurred 
by the designated State agency to carry out the Program: 
(1) For 3 years such costs shall be reimbursed 
at the rate of— 
(A) 90 percent of any automated data 
processing improvement, and Electronic Benefit 
Transfer contract amendment, necessary to pro-
vide rebates under the Program; and 
(B) 75 percent of such costs remaining. 
(2) For subsequent years such costs shall be re-
imbursed at the rate of 50 percent. 
(i) TREATMENT OF REBATES.—The amount of any 
rebate received under the Program shall not be considered 
to be income or resources for any purpose under any Fed-
eral, State, or local law, including any law relating to tax-
ation (including income tax) or public assistance (includ-
ing programs that provide health care, cash aid, child care, 
nutrition assistance, and housing assistance). No partici-
pating State (or political subdivision thereof) shall de-
crease any assistance otherwise provided to an individual 
or a household based on the fact that a household applied 
for or received a rebate under the Program. 
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189 
Subtitle B—Low-Carbon 
Technology Fund 
SEC. 311. PURPOSES. 
The purposes of this subtitle are— 
(1) to encourage rapid, sustained, and cost-ef-
fective development, demonstration, and deployment 
of advanced low-carbon energy and efficiency tech-
nologies that substantially reduce greenhouse gas 
emissions; and 
(2) to do so in a manner that encourages eco-
nomic growth and job creation in the United States, 
establishes the United States as a global leader in 
low-carbon energy technology innovation and produc-
tion, and minimizes the cost of meeting the climate 
protection objectives of this Act. 
SEC. 312. FUNDING. 
The Secretary of Energy shall utilize the Low-Carbon 
Technology Fund established under section 722(a) of the 
Clean Air Act (as added by section 101 of this Act) to 
carry out a comprehensive program of research, develop-
ment, demonstration, and deployment of low-carbon en-
ergy and efficiency technologies as provided in this sub-
title. Funds deposited in the Low-Carbon Technology 
Fund shall be available for expenditure, without further 
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190 
appropriation or fiscal year limitation, to carry out this 
subtitle. 
SEC. 313. RENEWABLE ENERGY AND ENERGY EFFICIENCY 
RESEARCH, 
DEVELOPMENT, 
AND 
DEM-
ONSTRATION. 
(a) IN GENERAL.—In each of fiscal years 2010 
through 2020, the Secretary of Energy shall use 35 per-
cent of the funds deposited in the Low-Carbon Technology 
Fund for renewable energy and energy efficiency tech-
nology programs in accordance with this section. In addi-
tion to amounts otherwise authorized to be appropriated 
for the programs described in subsection (b), there are au-
thorized to be appropriated such sums as may be nec-
essary for carrying out such programs for fiscal years 
2010 through 2020. 
(b) ALLOCATION OF FUNDS.—Funds available under 
this section shall be distributed as follows: 
(1) RENEWABLE
ELECTRICITY.—1⁄4
of such 
funds shall be used to carry out— 
(A) renewable energy programs under sec-
tion 931 of the Energy Policy Act of 2005 (42 
U.S.C. 16231); 
(B) solar thermal energy storage programs 
under section 602 of the Energy Independence 
and Security Act of 2007 (42 U.S.C. 17171); 
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(C) photovoltaic technology demonstration 
programs under section 607 of the Energy 
Independence and Security Act of 2007 (42 
U.S.C. 17175); 
(D) hydrothermal and geothermal energy 
programs under sections 613 through 616 of 
the Energy Independence and Security Act of 
2007 (42 U.S.C. 17192–95); and 
(E) marine and hydrokinetic renewable en-
ergy programs under sections 633 and 634 of 
the Energy Independence and Security Act of 
2007 (42 U.S.C. 17212 and 17213). 
(2) ELECTRIC
TRANSMISSION
AND
DISTRIBU-
TION EFFICIENCY.—1⁄8 of such funds shall be used 
to carry out— 
(A) electric transmission and distribution 
programs under section 925 of the Energy Pol-
icy Act of 2005 (42 U.S.C. 16215); and 
(B) smart grid technology programs under 
sections 1304 and 1306 of the Energy Inde-
pendence and Security Act of 2007 (42 U.S.C. 
17384 and 17386). 
(3) LOW-CARBON RENEWABLE FUELS AND BIO-
ENERGY.—1⁄8 of such funds shall be used to carry 
out— 
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192 
(A) biofuels and bioenergy programs under 
section 932 of the Energy Policy Act of 2005 
(42 U.S.C. 16232); 
(B) biofuels distribution and advanced 
biofuels infrastructure programs under section 
248 of the Energy Independence and Security 
Act of 2007 (42 U.S.C. 17054); and 
(C) biomass programs under section 307 of 
the Biomass Research and Development Act of 
2000 (7 U.S.C. 8606). 
(4) LOW-EMISSION
VEHICLES.—3⁄16
of such 
funds shall be used to carry out— 
(A) advanced vehicle efficiency technologies 
programs under section 911(a)(2)(A) of the 
Energy Policy Act of 2005 (42 U.S.C. 
16191(a)(2)(A)); 
(B) efficient hybrid and advanced diesel 
vehicles and components programs under sec-
tion 712 of the Energy Policy Act of 2005 (42 
U.S.C. 16062); and 
(C) lightweight vehicle materials programs 
under section 651 of the Energy Independence 
and Security Act of 2007 (42 U.S.C. 17241). 
(5) BUILDING EFFICIENCY.—1⁄8 of such funds 
shall be used to carry out— 
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193 
(A) 
the 
Zero-Net-Energy 
Commercial 
Buildings Initiative under section 422 of the 
Energy Independence and Security Act of 2007 
(42 U.S.C. 17082); and 
(B) building efficiency technology pro-
grams under section 911(a)(2)(B) of the En-
ergy Policy Act of 2005 (42 U.S.C. 16191). 
(6) INDUSTRIAL
EFFICIENCY.—1⁄16
of such 
funds shall be used to carry out— 
(A) the energy-intensive industries effi-
ciency program under section 452 of the En-
ergy Independence and Security Act of 2007 
(42 U.S.C. 17111); and 
(B) the waste energy recovery incentive 
grant program under section 373 of the Energy 
Policy and Conservation Act (42 U.S.C. 6343). 
(7) ENERGY STORAGE TECHNOLOGIES.—1⁄16 of 
such funds shall be used to carry out the energy 
storage technology programs under section 641 of 
the Energy Independence and Security Act of 2007 
(42 U.S.C. 17231). 
(8) ADVANCED RESEARCH PROJECTS AGENCY- 
ENERGY.—1⁄16 of such funds shall be used to fund 
programs carried out by the Advanced Research 
Projects Agency-Energy (ARPA–E) under section 
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5012 of the America COMPETES Act of 2007 (42 
U.S.C. 16538), for research and development of en-
ergy technologies to achieve reductions in green-
house gas emissions. 
SEC. 314. RENEWABLE ENERGY DEPLOYMENT INCENTIVES. 
(a) RENEWABLE ELECTRICITY PRODUCTION PAY-
MENTS.— 
(1) ALLOCATION.—In each of fiscal years 2010 
through 2030, the Secretary of Energy shall use 40 
percent of funds deposited in the Low-Carbon Tech-
nology Fund, in accordance with this subsection, to 
encourage deployment of renewable electricity gen-
eration technologies. 
(2) REGULATIONS.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
retary shall promulgate regulations establishing a 
program to competitively distribute funds allocated 
under paragraph (1) to producers of renewable elec-
tricity through reverse auctions, in accordance with 
the requirements of this subsection. 
(3) ELIGIBILITY
CRITERIA.—The Secretary 
shall provide incentives only for the domestic produc-
tion of electricity from— 
(A) generation units placed into service 
after the date of enactment of this Act that 
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195 
generate electricity exclusively from solar, wind, 
biomass, ocean (including tidal, wave, current, 
and thermal), or geothermal resources; or 
(B) additions of new capacity or increased 
efficiency that leads to increased generation at 
hydroelectric projects that commenced operation 
prior to the date of enactment of this Act. 
(4) REVERSE AUCTIONS.—The Secretary shall 
distribute funds among producers of eligible renew-
able electricity, on a competitive basis, through re-
verse auctions, based on the bids from producers in 
terms of dollars per megawatt-hour of electricity 
generated. In deciding among bids, the Secretary 
shall give preference to the lowest price bids, with 
the following exceptions: 
(A) The Secretary shall seek to ensure that 
the categories of renewable electricity tech-
nologies receiving funding under this subsection 
are diverse and that the distribution of funding 
is reasonably balanced among different tech-
nologies. 
(B) The Secretary shall require each bid-
der to notify the Secretary of any other finan-
cial assistance the bidder may reasonably be an-
ticipated to receive through other Federal, 
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196 
State, or local government programs for the 
same production, and shall seek to avoid pro-
viding payments under this subsection where 
the Secretary determines that such payments 
are likely, in light of other Federal, State, or 
local financial assistance, to provide the bidder 
with an unreasonably high rate of return. 
(5) FORM OF ASSISTANCE.—Funds shall be dis-
tributed under this subsection pursuant to contracts 
to provide production payments to producers of re-
newable electricity for each year during the first 10 
years of commercial service of the generating unit. 
The Secretary shall not award new contracts under 
this subsection after December 31, 2020. 
(6) AMOUNT OF PAYMENTS.—Production pay-
ments made pursuant to this subsection shall be dis-
tributed to each producer at the end of each year of 
operation in an amount equal to the product ob-
tained by multiplying— 
(A) the price bid by the producer per 
megawatt-hour of electricity generated; by 
(B) the lesser of— 
(i) the number of megawatt-hours 
generated and sold by the electricity gen-
eration unit during the preceding year; and 
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(ii) the number of megawatt-hours bid 
for that year by the producer. 
(b) DISTRIBUTED
RENEWABLE
ENERGY
TECH-
NOLOGY REBATES.— 
(1) DEFINITION OF DISTRIBUTED RENEWABLE 
ENERGY TECHNOLOGY.—For purposes of this sub-
section, the term ‘‘distributed renewable energy tech-
nology’’ means a technology that is designed to gen-
erate electric or thermal energy from solar, wind, or 
geothermal resources to serve energy consumers at 
or near the site at which the technology is installed. 
(2) ALLOCATION.—For each of fiscal years 
2010 through 2030, the Secretary of Energy shall 
use 5 percent of funds deposited in the Low-Carbon 
Technology Fund, in accordance with this sub-
section, to encourage deployment of distributed re-
newable energy technologies. 
(3) REGULATIONS.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
retary of Energy shall promulgate regulations estab-
lishing a program to distribute funds made available 
under paragraph (2), in accordance with this sub-
section, through rebates to persons or entities that 
purchase, install, and operate distributed renewable 
energy technologies. 
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(4) DISTRIBUTION OF ASSISTANCE.—The Sec-
retary shall distribute rebates to persons or entities 
that purchase, install, and operate distributed re-
newable energy technologies either— 
(A) directly; 
(B) through utilities or manufacturers of 
distributed renewable energy technologies; or 
(C) through such other entities as the Sec-
retary of Energy determines will provide a cost- 
effective channel of distribution. 
(5) ELIGIBILITY CRITERIA.— 
(A) ELIGIBLE
EQUIPMENT.—The Sec-
retary of Energy shall provide incentives only to 
persons or entities that, after the date of enact-
ment of this Act, purchase, install, and operate 
distributed renewable energy technology that 
is— 
(i) new equipment which uses solar 
energy to generate electricity, to heat or 
cool (or provide hot water for use in) a 
structure, or to provide solar process heat, 
except equipment that is used to generate 
energy for the purposes of heating a swim-
ming pool; 
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(ii) new equipment which uses solar 
energy to illuminate the inside of a struc-
ture using fiber-optic distributed sunlight; 
(iii) new equipment used to produce, 
distribute, or use energy derived from a 
geothermal deposit; or 
(iv) a new wind turbine which has a 
nameplate capacity of not greater than 100 
kilowatts. 
(B) LIMITATION.—Persons or entities shall 
not be eligible for rebates under this section for 
the purchase, installation, and operation of 
equipment for which they have received, or will 
receive, other financial incentives provided by a 
Federal, State, or local government. 
(6) AMOUNT OF REBATES.—Rebates under this 
section shall not exceed the lesser of— 
(A) 30 percent of cost of purchase and in-
stallation of eligible equipment; or 
(B) $5,000 per site. 
SEC. 315. CARBON CAPTURE AND SEQUESTRATION DEM-
ONSTRATION AND DEPLOYMENT. 
(a) ALLOCATION.—In each of fiscal years 2010 
through 2020, the Secretary of Energy shall use 20 per-
cent of funds deposited in the Low-Carbon Technology 
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Fund to encourage large-scale demonstration of carbon 
capture and geological sequestration technologies and 
early commercial deployment of such technologies at quali-
fying electric generating units. 
(b) DEMONSTRATION OF CARBON CAPTURE AND SE-
QUESTRATION.—The Secretary of Energy shall use funds 
allocated under subsection (a) to complete the carbon cap-
ture and sequestration programs established under section 
963 of the Energy Policy Act of 2005 (42 U.S.C. 16293) 
and section 703 of the Energy Independence and Security 
Act of 2007 (42 U.S.C. 17251). For each of fiscal years 
2010 through 2013, the Secretary shall fund those pro-
grams at the full level of authorization provided by those 
sections. 
(c) EARLY DEPLOYMENT INCENTIVES FOR CARBON 
CAPTURE AND SEQUESTRATION.— 
(1) ALLOCATION.—In each of fiscal years 2010 
through 2020, the Secretary shall use the remaining 
funds available under subsection (a), after funding 
the programs under subsection (b), to encourage 
commercial deployment of carbon capture and se-
questration technologies at qualifying electric gener-
ating units. 
(2) REGULATIONS.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
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retary shall promulgate regulations establishing a 
program to distribute funds allocated under para-
graph (1), in the form of cost-sharing grants, to 
owners or operators of electric generating units in 
accordance with the requirements of this subsection. 
(3) ELIGIBILITY
CRITERIA.—The Secretary 
shall provide incentives under this section only to 
projects— 
(A) at electric generating units— 
(i) with a rated capacity of 250 
megawatts or more; and 
(ii) that derive at least 50 percent of 
their annual fuel input from coal, petro-
leum coke, or any combination of these 
fuels; 
(B) that will achieve the capture and geo-
logical sequestration of not less than 85 percent 
of the total carbon dioxide emissions produced 
by the electric generating unit on an annual av-
erage basis; 
(C) the construction of which commences 
no later than December 31, 2020; and 
(D) that do not receive other Federal or 
State financial incentives, including loans, loan 
guarantees, grants, or tax credits. 
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(4) LEVEL OF FUNDING.—The level of assist-
ance provided to owners or operators of eligible elec-
tric generating units under this subsection shall be 
no greater than is necessary to permit recovery of 
reasonable incremental capital and operating costs of 
the project that are specifically attributable to imple-
mentation of carbon capture and sequestration, tak-
ing into account the reduced cost of compliance with 
section 712 of the Clean Air Act (as added by sec-
tion 101 of this Act). For purposes of this para-
graph, reasonable incremental capital and operating 
costs shall be determined based on the most cost-ef-
fective reasonably available technology for capturing 
and sequestering carbon dioxide emissions, taking 
into account the location of the electric generating 
unit and the type of fuel (including coal type) used 
to power the unit. 
(5) SELECTION CRITERIA.—As part of the reg-
ulations promulgated under this subsection, the Sec-
retary shall establish objective criteria for the selec-
tion of projects, in the event that there are more 
grant applicants that meet the eligibility criteria in 
paragraph (3) than can be funded. Such criteria 
shall, at minimum— 
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(A) give preference to projects that most 
cost-effectively capture and sequester carbon di-
oxide, so as to maximize the tonnage of carbon 
dioxide sequestered per dollar of assistance pro-
vided; and 
(B) seek to ensure funding for projects 
representing a diverse range of coal types, cap-
ture technologies, and geographic regions. 
SEC. 316. FISCAL YEARS 2021 THROUGH 2050. 
(a) RECOMMENDATIONS TO THE PRESIDENT AND 
CONGRESS.—The reports developed under section 703(d) 
and (e) of this Act shall contain recommendations on the 
allocation of funds from the Low Carbon Technology Fund 
in future fiscal years, beginning with fiscal year 2021. 
(b) EXCEPTION.—Subsection (a) shall not apply to 
the first report delivered under section 703(d) or the first 
report delivered under section 703(e) of this Act. 
(c) PRESIDENTIAL AUTHORITY.—If, after the 1-year 
period beginning on the date of submission of each report 
to which subsection (a) applies, Congress has not enacted 
a statute codifying the recommendations on the allocation 
of funds from the Low Carbon Technology Fund in future 
fiscal years or an alternative to such recommendations, the 
President is authorized to allocate funds from that Fund 
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pursuant to the recommendations for the next 5 fiscal 
years. 
Subtitle C—National Energy 
Efficiency Fund 
SEC. 321. PURPOSES. 
The purposes of this subtitle are— 
(1) to encourage widespread adoption of energy 
efficiency policies and measures, including programs 
to— 
(A) increase efficiency in electricity and 
natural gas consumption; 
(B) encourage the adoption and enforce-
ment of robust building efficiency codes; 
(C) develop and implement policies and 
projects that will reduce vehicle miles traveled; 
(D) provide weatherization and home en-
ergy assistance to low-income persons; and 
(E) encourage recycling of energy intensive 
consumer goods; and 
(2) by means of such programs to— 
(A) achieve substantial negative- or low- 
cost reductions in greenhouse gas emissions; 
(B) greatly reduce the overall cost to 
American consumers and businesses of achiev-
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ing the climate protection objectives of this Act; 
and 
(C) spur innovation, job creation, and eco-
nomic growth in the United States through in-
vestment in energy efficiency technologies. 
SEC. 322. DEFINITIONS. 
For purposes of this subtitle: 
(1) NATIONAL
ENERGY
EFFICIENCY
FUND.— 
The term ‘‘National Energy Efficiency Fund’’ means 
the National Energy Efficiency Fund established 
under section 722 of the Clean Air Act (as added by 
section 101 of this Act). 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
(3) STATE.—The term ‘‘State’’ means— 
(A) a State; and 
(B) the District of Columbia. 
SEC. 323. FUNDING. 
Funds deposited in the National Energy Efficiency 
Fund shall be available for expenditure, without further 
appropriation or fiscal year limitation, in accordance with 
the requirements of this subtitle. 
SEC. 324. ELECTRICITY CONSUMERS. 
(a) DEFINITION OF ELECTRICITY SAVINGS.— 
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(1) IN GENERAL.—The term ‘‘electricity sav-
ings’’ means a net reduction in statewide end-use 
electricity consumption that is achieved through con-
sumer energy efficiency measures and programs over 
a specified time period, relative to projected con-
sumption for the same time period, as determined by 
the Secretary. 
(2) INCLUSIONS.—The term ‘‘electricity sav-
ings’’ includes savings achieved as a result of— 
(A) electricity-saving practices; and 
(B) installation of energy-saving tech-
nologies and devices. 
(3) EXCLUSION.—The term ‘‘electricity sav-
ings’’ does not include savings from measures that 
would likely be adopted in the absence of consumer 
energy efficiency measures and programs, as deter-
mined by the Secretary. 
(b) ESTABLISHMENT OF PROGRAM.—In each of fiscal 
years 2011 through 2050, the Secretary shall distribute 
46 percent of the funds deposited in the National Energy 
Efficiency Fund to States, in accordance with this section, 
to encourage cost-effective investment in consumer energy 
efficiency measures and programs. 
(c) DISTRIBUTION OF FUNDS.— 
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(1) IN GENERAL.—The Secretary shall estab-
lish, by rule, a Start-Up Formula and a Perform-
ance-Based Formula, in accordance with paragraphs 
(2) and (3) of this subsection, to govern distribution 
of funds under this section. 
(2) START-UP
FORMULA.—The Start-up For-
mula referred to in paragraph (1) shall provide for 
the distribution of funds based on the following 2 
factors, each given equal weight: 
(A) The proportion that— 
(i) the quantity of electricity delivered 
to consumers within the State during the 
3 calendar years preceding the calendar 
year in which the funds are distributed; 
bears to 
(ii) the total quantity of electricity de-
livered to consumers in the United States 
during those 3 calendar years. 
(B) The proportion that— 
(i) the population of the State in the 
most recent year for which data is avail-
able for all States, as determined by the 
Secretary; bears to 
(ii) the population of the United 
States in that year. 
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(3) 
PERFORMANCE-BASED
FORMULA.—The 
Performance-Based Formula referred to in para-
graph (1) shall provide for the distribution of funds 
among States in direct proportion to the quantity of 
electricity savings actually achieved within each 
State in the prior year as a result of consumer en-
ergy efficiency measures and programs implemented 
in the State. Such formula shall— 
(A) define an appropriate baseline for cal-
culating electricity savings; 
(B) define a minimum level of annual 
statewide electricity savings, which shall not be 
less than 0.5 percent, necessary to qualify for 
funding under the formula; 
(C) take account of past performance in 
achieving electricity savings so as not to penal-
ize States that have taken early action to im-
prove efficiency; and 
(D) maximize, to the greatest extent pos-
sible, the incentive for States to achieve cost-ef-
fective electricity savings. 
(4) ALLOCATION.—The Secretary shall dis-
tribute the funds available under subsection (b) in 
accordance with the following table: 
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Fiscal Year 
Percent of Funds Allo-
cated According to 
Start-Up Formula 
Percent of Funds Allo-
cated According to Per-
formance-Based For-
mula 
2010 
100 
2011 
100 
2012 
2013 
2014 through 2050 
100 
(d) ELIGIBILITY.— 
(1) IN
GENERAL.—In fiscal years 2012 and 
2013, a State shall be eligible to receive funding 
pursuant to both the Start-Up Formula and the 
Performance-Based Formula. 
(2) ELIGIBILITY
FOR
FUNDS
DISTRIBUTED 
BASED ON START-UP FORMULA.—To be eligible to 
receive funds distributed based on the Start-Up For-
mula, a State must adopt a binding statewide elec-
tricity savings target that requires such State to 
achieve annual electricity savings of not less than 
0.25 percent in 2011 and 2012, and not less than 
0.5 percent in 2013 and 2014. 
(e) USE OF FUNDS.— 
(1) IN GENERAL.—A State’s use of funds dis-
tributed pursuant to this section shall be limited to 
measures and programs to— 
(A) increase consumer energy efficiency; 
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(B) increase transmission and distribution 
efficiency; and 
(C) promote deployment of— 
(i) renewable electricity generation; 
(ii) advanced biofuels that meet the 
baseline greenhouse gas lifecycle emissions 
requirements 
as 
defined 
in 
section 
211(o)(1)(B) of the Clean Air Act (42 
U.S.C. 7545(o)(1)(B)); and 
(iii) low-emission vehicles. 
(2) CERTIFICATION
AND
VERIFICATION.—The 
Secretary shall establish— 
(A) guidelines specifying the types of ac-
tivities for which funds distributed pursuant to 
this section may be used; 
(B) procedures requiring States to certify 
that funds distributed pursuant to this section 
are used in accordance with this subsection; 
and 
(C) procedures for reviewing and verifying 
States’ compliance with this subsection. 
(3) PENALTIES.—If the Secretary determines 
that a State is not in compliance with this sub-
section, the Secretary may withhold a portion of the 
funding, equal to twice the amount of funding re-
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ceived by the State that was not spent in accordance 
with the requirements in this subsection, for which 
such State would otherwise be eligible under this 
section in later years. 
(f) MEASUREMENT, MONITORING, CERTIFICATION, 
AND VERIFICATION OF ELECTRICITY SAVINGS.— 
(1) METHODS
AND
STANDARDS.—The Sec-
retary shall establish national measurement, moni-
toring, certification, and verification methods and 
standards to be used to evaluate the quantity of 
electricity savings achieved by a State for purposes 
of distributing funds based on the Performance- 
Based Formula. 
(2) STATE REQUIREMENTS.—As a condition of 
receipt of funds based on the Performance-Based 
Formula, States must, in accordance with paragraph 
(1)— 
(A) quantify and certify the quantity of 
electricity savings achieved each year by the 
State; 
(B) provide data necessary to support and 
verify such claim, as determined by the Sec-
retary; and 
(C) provide third-party verification of re-
ported electricity savings. 
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(g) REGULATIONS.—Not later than January 1, 2010, 
the Secretary shall promulgate regulations governing the 
implementation of this section. The Secretary shall review 
and, as appropriate, revise such regulations at least every 
5 years. 
SEC. 325. NATURAL GAS CONSUMERS. 
(a) DEFINITION OF NATURAL GAS SAVINGS.— 
(1) IN GENERAL.—The term ‘‘natural gas sav-
ings’’ means a net reduction in statewide natural gas 
consumption by residential and commercial con-
sumers that is achieved through consumer energy ef-
ficiency measures and programs over a specified 
time period, relative to projected consumption for 
the same time period, as determined by the Sec-
retary. 
(2) INCLUSIONS.—The term ‘‘natural gas sav-
ings’’ includes savings achieved as a result of— 
(A) natural gas-saving practices; and 
(B) installation of energy-saving tech-
nologies and devices. 
(3) EXCLUSION.—The term ‘‘natural gas sav-
ings’’ does not include savings from measures that 
would likely be adopted in the absence of consumer 
energy efficiency measures and programs, as deter-
mined by the Secretary. 
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(b) ESTABLISHMENT OF PROGRAM.—In each of fiscal 
years 2011 through 2050, the Secretary shall distribute 
8 percent of the funds deposited in the National Energy 
Efficiency Fund to States, in accordance with this section, 
to encourage cost-effective investment in consumer energy 
efficiency measures and programs. 
(c) DISTRIBUTION OF FUNDS.— 
(1) IN GENERAL.—The Secretary shall estab-
lish, by rule, a Start-Up Formula and a Perform-
ance-Based Formula, in accordance with paragraphs 
(2) and (3) of this subsection, to govern distribution 
of funds under this section. 
(2) START-UP
FORMULA.—The Start-up For-
mula referred to in paragraph (1) shall provide for 
the distribution of funds based on the following 2 
factors, each given equal weight: 
(A) The proportion that— 
(i) the quantity of natural gas deliv-
ered to residential and commercial con-
sumers within the State during the 3 cal-
endar years preceding the calendar year in 
which the funds are distributed; bears to 
(ii) the total quantity of natural gas 
delivered to residential and commercial 
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214 
consumers in the United States during 
those 3 calendar years. 
(B) The proportion that— 
(i) the population of the State in the 
most recent year for which data is avail-
able for all States, as determined by the 
Secretary; bears to 
(ii) the population of the United 
States in that year. 
(3) 
PERFORMANCE-BASED
FORMULA.—The 
Performance-Based Formula referred to in para-
graph (1) shall provide for the distribution of funds 
among States in direct proportion to quantity of 
natural gas savings actually achieved within each 
State in the prior year as a result of consumer en-
ergy efficiency measures and programs implemented 
in the State. Such formula shall— 
(A) define an appropriate baseline for cal-
culating natural gas savings; 
(B) define a minimum level of annual 
statewide natural gas savings, which shall not 
be less than 0.5 percent, necessary to qualify 
for funding under the formula; 
(C) take account of past performance in 
achieving natural gas savings so as not to pe-
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nalize States that have taken early action to im-
prove efficiency; and 
(D) maximize, to the greatest extent pos-
sible, the incentive for States to achieve cost-ef-
fective natural gas savings. 
(4) ALLOCATION.—The Secretary shall dis-
tribute the funds available under subsection (b) in 
accordance with the following table: 
Fiscal Year 
Percent of Funds Allo-
cated According to 
Start-Up Formula 
Percent of Funds Allo-
cated According to Per-
formance-Based For-
mula 
2010 
100 
2011 
100 
2012 
2013 
2014 through 2050 
100 
(d) ELIGIBILITY.— 
(1) IN
GENERAL.—In fiscal years 2012 and 
2013, a State shall be eligible to receive funding 
pursuant to both the Start-Up Formula and the 
Performance-Based Formula. 
(2) ELIGIBILITY
FOR
FUNDS
DISTRIBUTED 
BASED ON START-UP FORMULA.—To be eligible to 
receive funds distributed based on the Start-Up For-
mula, a State must adopt a binding statewide nat-
ural gas savings target that requires such State to 
achieve annual natural gas savings of not less than 
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0.25 percent of the quantity of natural gas delivered 
to residential and commercial consumers in the 
State in 2011 and 2012, and not less than 0.5 per-
cent in 2013 and 2014. 
(e) USE OF FUNDS.— 
(1) IN GENERAL.—A State’s use of funds dis-
tributed pursuant to this section shall be limited to 
measures 
and 
programs 
described 
in 
section 
324(e)(1). 
(2) CERTIFICATION
AND
VERIFICATION.—The 
Secretary shall establish— 
(A) guidelines specifying the types of ac-
tivities for which funds distributed pursuant to 
this section may be used; 
(B) procedures requiring States to certify 
that funds distributed pursuant to this section 
are used in accordance with this subsection; 
and 
(C) procedures for reviewing and verifying 
States’ compliance with this subsection. 
(3) PENALTIES.—If the Secretary determines 
that a State is not in compliance with this sub-
section, the Secretary may withhold a portion of the 
funding, equal to twice the amount of funding re-
ceived by the State that was not spent in accordance 
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with the requirements in this subsection, for which 
such State would otherwise be eligible under this 
section in later years. 
(f) MEASUREMENT, MONITORING, CERTIFICATION, 
AND VERIFICATION OF NATURAL GAS SAVINGS.— 
(1) METHODS
AND
STANDARDS.—The Sec-
retary shall establish national measurement, moni-
toring, certification, and verification methods and 
standards to be used to evaluate the quantity of nat-
ural gas savings achieved by a State for purposes of 
distributing funds based on the Performance-Based 
Formula. 
(2) STATE REQUIREMENTS.—As a condition of 
receipt of funds based on the Performance-Based 
Formula, States must, in accordance with paragraph 
(1)— 
(A) quantify and certify the quantity of 
natural gas savings achieved each year by the 
State; 
(B) provide data necessary to support and 
verify such claim, as determined by the Sec-
retary; and 
(C) provide third-party verification of re-
ported natural gas savings. 
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(g) REGULATIONS.—Not later than January 1, 2010, 
the Secretary shall promulgate regulations governing the 
implementation of this section. The Secretary shall review 
and, as appropriate, revise such regulations at least every 
5 years. 
SEC. 326. BUILDING EFFICIENCY. 
(a) IN GENERAL.—In each of fiscal years 2010 
through 2050, the Secretary shall distribute 12 percent 
of the funds deposited in the National Energy Efficiency 
Fund to States to encourage adoption and enforcement 
of statewide commercial and residential building efficiency 
codes. 
(b) DISTRIBUTION OF FUNDS.—Not later than Janu-
ary 1, 2010, the Secretary shall promulgate regulations 
governing distribution of funds under this section. Such 
regulations shall— 
(1) provide that a State shall qualify for receipt 
of funds under this section only if such State is in 
compliance with section 304(c) of the Energy Con-
servation and Production Act (as amended by sec-
tion 601 of this Act); 
(2) establish a performance-based formula for 
distribution of funding under this section that will 
reward States that adopt and effectively enforce 
statewide building efficiency codes that achieve 
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greater energy savings than those required under 
section 304(c) of the Energy Conservation and Pro-
duction Act (as amended by section 601 of this Act), 
using multiple tiers of energy savings performance; 
and 
(3) establish a program for periodic review and 
verification of State enforcement of building effi-
ciency codes to ensure the energy savings objectives 
of the program are being met. 
(c) PERIODIC UPDATING.—The Secretary shall re-
view and, as appropriate, revise the regulations adopted 
under subsection (b) at least every 5 years. Any revised 
regulations shall adhere to the requirements set forth in 
paragraphs (1) through (3) of subsection (b). 
SEC. 327. SMART GROWTH AND MASS TRANSIT. 
(a) DEFINITIONS.—In this section: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency or, if the President des-
ignates an alternative agency under subsection (b), 
the head of such agency. 
(2) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means a State or an eligible unit of local govern-
ment. 
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(3) ELIGIBLE UNIT OF LOCAL GOVERNMENT.— 
The term ‘‘eligible unit of local government’’ 
means— 
(A) a city with a population of at least 
35,000; or 
(B) a county with a population of at least 
200,000. 
(4) VMT REDUCTION PLAN.—The term ‘‘VMT 
reduction plan’’ means a comprehensive plan to re-
duce vehicle miles traveled within a jurisdiction, de-
veloped pursuant to guidelines issued by the Admin-
istrator under subsection (d) of this section. 
(b) ESTABLISHMENT OF PROGRAM.—In each of fiscal 
years 2010 through 2050, the Administrator, or the head 
of such other Executive agency (as defined in section 105 
of title 5, United States Code) as the President may des-
ignate, shall distribute 20 percent of the funds deposited 
in the National Energy Efficiency Fund to eligible entities 
in the form of grants to support the development and im-
plementation of strategies to reduce vehicle miles traveled 
within their respective jurisdictions. 
(c) ALLOCATION
OF FUNDS.—Of amounts made 
available to provide grants under this section for each fis-
cal year, the Administrator shall allocate— 
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(1) 70 percent to eligible units of local govern-
ment; and 
(2) 30 percent to States. 
(d) GUIDELINES FOR VMT REDUCTION PLANS AND 
GRANT PROPOSALS.—Not later than 18 months after the 
date of enactment of this Act, the Administrator shall pro-
mulgate guidelines for the development, by eligible units 
of local government and by States, of— 
(1) VMT reduction plans for the relevant juris-
diction; and 
(2) proposals to use funds provided under this 
section for the implementation of one or more ele-
ments of such a plan. 
(e) PLANNING GRANTS.—The Administrator is au-
thorized to make initial grants to eligible entities to sup-
port the development of VMT reduction plans and grant 
proposals in accordance with the guidelines issued under 
subsection (d), including through the retention of technical 
consultants. 
(f) IMPLEMENTATION GRANTS.— 
(1) IN
GENERAL.—The Administrator shall 
award grants, on a competitive basis, to eligible enti-
ties to support the implementation of policies, meas-
ures, and projects that will substantially reduce vehi-
cle miles traveled within the relevant jurisdiction. 
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(2) REQUIREMENTS.— 
(A) IN
GENERAL.—The Administrator 
shall not provide to an eligible entity any grant 
under this section until the eligible entity has 
submitted a VMT reduction plan and a grant 
proposal that satisfy the requirements of the 
guidelines established under subsection (d), and 
the Administrator has approved such plan and 
such proposal under this subsection. 
(B) APPROVAL BY ADMINISTRATOR.— 
(i) IN GENERAL.—The Administrator 
shall approve or disapprove a VMT reduc-
tion plan or grant proposal submitted 
under this subsection by not later than 
180 days after the date of submission of 
the VMT reduction plan and grant pro-
posal. 
(ii) DISAPPROVAL.—If the Adminis-
trator disapproves a VMT reduction plan 
or grant proposal, the Administrator shall 
notify the eligible entity of the reasons for 
the disapproval and the eligible entity may 
revise and resubmit the plan or proposal 
for approval. 
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(3) SELECTION CRITERIA.—In awarding grants 
under this subsection, the Administrator shall seek 
to maximize the reduction in vehicle miles traveled 
achieved per dollar of assistance provided. 
(4) USE
OF
FUNDS.—Implementation grants 
provided under this section may be used to imple-
ment any program or project that the Administrator 
determines is likely to result in substantial reduc-
tions in vehicle miles traveled in the relevant juris-
diction, including— 
(A) efforts to increase mass transit service 
and ridership, including by adding new mass 
transit systems; 
(B) promotion of transit-oriented and 
mixed-infill development, including through the 
updating of relevant zoning or other regula-
tions; 
(C) construction of bicycle and pedestrian 
infrastructure; and 
(D) programs to promote telecommuting or 
satellite work centers. 
(g) LIMITATIONS.—The Administrator is authorized 
to establish, by regulation, appropriate limitations on the 
proportion of planning grants under subsection (e) or im-
plementation grants under subsection (f) that can be used 
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for administrative expenses, revolving loan funds, or sub-
grants to other governmental or nongovernmental entities. 
(h) REVIEW AND EVALUATION.— 
(1) IN GENERAL.—The Administrator may re-
view and evaluate the administration of use of any 
grant awarded under this section, including by con-
ducting an audit, as the Administrator determines to 
be appropriate. 
(2) WITHHOLDING OF FUNDS.—The Adminis-
trator may withhold from an eligible entity any por-
tion of a grant to be provided to the eligible entity 
under the program if the Administrator determines 
that the eligible entity has failed to achieve compli-
ance with any applicable guideline of the Adminis-
trator relating to the program established by this 
section, including the misuse of misappropriation of 
funds provided under this section. 
SEC. 328. WEATHERIZATION ASSISTANCE PROGRAM AND 
LOW-INCOME 
HOME 
ENERGY 
ASSISTANCE 
PROGRAM. 
(a) WEATHERIZATION ASSISTANCE PROGRAM.—In 
each of fiscal years 2010 through 2050, the Secretary 
shall use 5 percent of the funds deposited in the National 
Energy Efficiency Fund for the Weatherization Assistance 
Program for Low-Income Persons established under part 
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A of title IV of the Energy Conservation and Production 
Act (42 U.S.C. 6861 et seq.). 
(b) LOW-INCOME HOME ENERGY ASSISTANCE PRO-
GRAM.—In each of fiscal years 2010 through 2050, the 
Secretary of Health and Human Services shall use 5 per-
cent of the funds deposited in the National Energy Effi-
ciency Fund for the Low-Income Home Energy Assistance 
Program established under the Low Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8621 et seq.). 
SEC. 329. RECYCLING. 
(a) DEFINITIONS.—For purposes of this section: 
(1) BEVERAGE.—The term ‘‘beverage’’ means 
water, mineral water, soda water, flavored water, 
sports drinks, juice, iced tea, wine cooler, beer or 
other malt beverage, or a carbonated nonalcoholic 
beverage of any variety in liquid form intended for 
human consumption, but does not include milk or 
other dairy products or dairy-derived products. 
(2) BEVERAGE
CONTAINER.—The term ‘‘bev-
erage container’’ means a container constructed of 
metal, glass, plastic, or some combination of these 
materials and having a capacity of up to one gallon 
of liquid and which is or has been sealed and used 
to contain a beverage for sale in interstate com-
merce. 
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(b) ESTABLISHMENT OF PROGRAM.—In each of fiscal 
years 2010 through 2050, the Secretary shall distribute 
4 percent of the funds deposited in the National Energy 
Efficiency Fund to States that adopt and enforce state-
wide programs for the recycling of beverage containers. 
(c) DISTRIBUTION OF FUNDS.—Not later than Janu-
ary 1, 2010, the Secretary shall promulgate regulations 
governing distribution of funds under this section. Such 
regulations shall at a minimum— 
(1) provide that a State shall qualify for receipt 
of funds under this section only if such State’s recy-
cling programs achieve a rate of recycling of at least 
60 percent of the beverage containers sold within the 
State each year; 
(2) establish a performance-based formula for 
distribution of funding under this section that will 
reward States that adopt and effectively enforce 
statewide recycling programs for beverage containers 
that achieve greater rates of recycling than are re-
quired under paragraph (1); and 
(3) establish a program for periodic review and 
verification of State programs to ensure that claimed 
recycling rates are being achieved in practice. 
(d) PERIODIC UPDATING.—The Secretary shall re-
view and, as appropriate, revise the regulations adopted 
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under subsection (c) at least every 5 years. Any revised 
regulations shall adhere to the requirements set forth in 
paragraphs (1) through (3) of subsection (c). 
Subtitle D—Agriculture and 
Forestry Carbon Fund 
SEC. 331. PURPOSE. 
The purpose of this subtitle is to achieve real, 
verifiable, additional, permanent, and enforceable in-
creases in carbon sequestration by, and reductions in 
greenhouse emissions from, agriculture and forest man-
agement activities within the United States through— 
(1) the establishment of a program to provide 
financial incentives to undertake projects that 
achieve these objectives; and 
(2) the implementation of coordinated research, 
education, and outreach initiatives in support of 
such program. 
SEC. 332. DEFINITIONS. 
In this subtitle— 
(1) AGRICULTURE
AND
FORESTRY
CARBON 
FUND.—The term ‘‘Agriculture and Forestry Carbon 
Fund’’ means the Agriculture and Forestry Carbon 
Fund established under section 722 of the Clean Air 
Act (as added by section 101 of this Act). 
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(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Agriculture. 
SEC. 333. FUNDING. 
(a) IN GENERAL.—Funds deposited in the Agri-
culture and Forestry Carbon Fund shall be available for 
expenditure, without further appropriation or fiscal year 
limitation, to carry out this subtitle. 
(b) LIMITATION.—The Secretary shall ensure that 
not less than 99 percent of the expenditures under this 
subtitle shall be dedicated to the incentive program under 
section 335. 
SEC. 334. AGRICULTURAL AND FORESTRY GREENHOUSE 
GAS MANAGEMENT RESEARCH. 
(a) REPORT.—Not later than 1 year after the date 
of enactment of this Act, the Secretary, in consultation 
with scientific and agricultural and forestry experts, shall 
prepare and submit to the President and Congress a re-
port that describes the status of research on agricultural 
and forestry greenhouse gas management, including a de-
scription of— 
(1) research on soil carbon sequestration and 
other agricultural and forestry greenhouse gas man-
agement that has been carried out; 
(2) information on techniques to measure and 
monitor increases in biological sequestration by, and 
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reductions in greenhouse emissions from, agriculture 
and forest management activities; 
(3) information on large-scale observation and 
monitoring of greenhouse gas emissions from and bi-
ological sequestration by the agriculture and forestry 
sectors; 
(4) any further research that is necessary; 
(5) the proposed priority for further research; 
and 
(6) the most appropriate approaches for con-
ducting the further research. 
(b) RESEARCH.—After the date of submission of the 
report required under subsection (a), the President and 
the Secretary (in collaboration with the member institu-
tions of higher education of the Consortium for Agricul-
tural Soil Mitigation of Greenhouse Gases, other institu-
tions of higher education, and research entities) shall ini-
tiate a program to conduct any further research on agri-
cultural and forestry greenhouse gas management that is 
necessary. 
SEC. 335. INCENTIVE PROGRAM. 
(a) AUTHORIZATION.—In each of fiscal years 2010 
through 2050, the Secretary shall use the funds deposited 
in the Agriculture and Forestry Carbon Fund to provide 
incentive payments to entities that carry out projects in 
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the United States that meet the criteria described in this 
section. 
(b) ESTABLISHMENT OF PROGRAM.— 
(1) REGULATIONS.—Not later than January 1, 
2010, the Secretary shall, in consultation with the 
Administrator, promulgate regulations establishing a 
program to provide assistance to entities that carry 
out projects, within eligible project types under sub-
sections (c) and (d), that achieve real, verifiable, ad-
ditional, permanent, and enforceable increases in bi-
ological sequestration by, and reductions in green-
house gas emissions from, agriculture and forest 
management activities within the United States. 
(2) REQUIREMENTS.—In designing the program 
under paragraph (1), the Secretary shall— 
(A) provide for the implementation of the 
requirements of this section; 
(B) take into account the findings of the 
report prepared under section 334(a); 
(C) integrate the program, as appropriate, 
with existing Natural Resources Conservation 
Service and Forest Service assistance programs, 
provided that funds distributed under this sec-
tion shall not be substituted for, or otherwise 
used as a basis for reducing, funding authorized 
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or appropriated to be provided under such ex-
isting programs; 
(D) seek to maximize the reduction of 
greenhouse gas emissions and increases in se-
questration per dollar of assistance provided; 
and 
(E) incorporate any environmental safe-
guards the Administrator determines necessary 
to ensure that no significant environmental deg-
radation results from projects that receive as-
sistance under this section. 
(c) ELIGIBLE
PROJECT
TYPES.—The types of 
projects eligible for assistance under this section shall be 
limited to— 
(1) cropland and rangeland management prac-
tices that reduce greenhouse gas emissions (other 
than emissions from the combustion of fossil fuels) 
or increase biological sequestration, including— 
(A) altered tillage practices; 
(B) winter cover cropping, continuous 
cropping, and other means to increase biomass 
returned to soil in lieu of planting followed by 
fallowing; 
(C) conversion of cropland to rangeland or 
grassland, on the condition that the land has 
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been in nonforest use for at least 10 years be-
fore the date of initiation of the project; 
(D) reduction of nitrogen fertilizer use or 
increase in nitrogen use efficiency; 
(E) reduction in the frequency and dura-
tion of flooding of rice paddies; and 
(F) reduction in carbon emissions from or-
ganic soils; 
(2) forest management practices that result in 
an increase in forest stand volume; and 
(3) other activities that the Secretary deter-
mines, in consultation with the Administrator, will 
result in net sequestration of carbon in wetlands or 
other nonforest natural lands. 
(d) EXCLUDED ACTIVITIES.—The Secretary, in con-
sultation with the Administrator, shall ensure that no as-
sistance shall be provided under this section for— 
(1) any activity eligible to receive offset credits 
under section 742 of the Clean Air Act (as added by 
section 101 of this Act); or 
(2) any activity that is required by or under-
taken to comply with any law, including any regula-
tion. 
(e) 
MEASUREMENT, 
MONITORING, 
AND 
VERIFICATION PROTOCOLS.— 
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(1) IN GENERAL.—The Secretary shall, in con-
sultation with the Administrator and taking into ac-
count the report developed under section 334(a), de-
velop measurement, monitoring, and verification pro-
tocols and tools for use by applicants and by the 
Secretary in administering this program. 
(2) REQUIREMENTS.—Such protocols and tools 
shall be designed to ensure that increases in seques-
tration or reductions in emissions reported by enti-
ties are accurate, real, verifiable, additional, perma-
nent, and enforceable. 
(3) ACQUISITION OF NEW DATA AND REVIEW 
OF METHODS.—The Secretary shall establish a com-
prehensive field sampling program to improve the 
scientific bases on which the standardized tools and 
methods developed under this section are based. 
(4) UPDATING.—The Secretary shall review, 
and revise if necessary, such protocols every five 
years, taking into account research performed under 
this subsection, section 334(b), and the reports pre-
pared by the National Academy of Sciences pursuant 
to title VII of this Act. 
(f) ENVIRONMENTAL CONSIDERATIONS.— 
(1) COORDINATION TO MINIMIZE NEGATIVE EF-
FECTS.—In designing and implementing the pro-
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gram established under this section, the Secretary, 
in consultation with the Administrator, shall act to 
avoid or minimize, to the maximum extent prac-
ticable, adverse effects on human health or the envi-
ronment resulting from projects or activities receiv-
ing support under this section. 
(2) USE OF NATIVE PLANT SPECIES.—Not later 
than January 1, 2010, the Secretary shall promul-
gate regulations for the selection, use, and storage 
of native and nonnative plant materials using assist-
ance provided under this section— 
(A) to ensure native species are given pri-
mary consideration in projects receiving assist-
ance under this section, in accordance with ap-
plicable Department of Agriculture guidance for 
the use of native plant materials; 
(B) to prohibit the use of federally des-
ignated or State-designated noxious weeds; and 
(C) to prohibit the use of a species listed 
by a regional or State invasive plant council 
within the applicable region or State. 
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SEC. 336. OUTREACH INITIATIVE ON REVENUE ENHANCE-
MENT FOR AGRICULTURAL PRODUCERS AND 
FORESTERS. 
(a) 
ESTABLISHMENT.—The 
Secretary, 
acting 
through the Chief of the Natural Resources Conservation 
Service, the Chief of the Forest Service, the Administrator 
of the Cooperative State Research, Education, and Exten-
sion Service, and land-grant colleges and universities, in 
consultation with the Administrator and the heads of 
other appropriate departments and agencies, shall estab-
lish an outreach initiative to provide information to agri-
cultural producers, agricultural organizations, foresters, 
and other landowners about opportunities under this Act 
to earn new revenue. 
(b) COMPONENTS.—The initiative under this sec-
tion— 
(1) shall be designed to ensure that, to the 
maximum extent practicable, agricultural organiza-
tions and individual agricultural producers, for-
esters, and other landowners receive detailed prac-
tical information about— 
(A) opportunities to receive assistance 
under this subtitle and related application, cer-
tification, 
measurement, 
monitoring, 
and 
verification protocols, procedures, tools, and re-
quirements; 
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(B) opportunities to earn offset credits 
under subtitle E of title VII of the Clean Air 
Act (as added by section 101 of this Act) and 
related initiation, measurement, and verification 
protocols, procedures, tools, and requirements; 
and 
(C) local, regional, and national databases 
and aggregation networks to facilitate achieve-
ment, measurement, registration, and sales of 
offsets; 
(2) shall provide— 
(A) outreach materials, including the hand-
book published under subsection (c), to inter-
ested parties; 
(B) workshops; and 
(C) technical assistance; and 
(3) may include the creation and development 
of regional marketing centers or coordination with 
existing centers (including centers within the Nat-
ural Resources Conservation Service or the Coopera-
tive State Research, Education, and Extension Serv-
ice or at land-grant colleges and universities). 
(c) HANDBOOK.— 
(1) IN GENERAL.—Not later than 2 years after 
the date of enactment of this Act, the Secretary, in 
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consultation with the Administrator and after an op-
portunity for public comment, shall publish a hand-
book for use by agricultural producers, agricultural 
cooperatives, foresters, other landowners, offset buy-
ers, and other stakeholders that provides easy-to-use 
guidance on— 
(A) earning assistance under this subtitle; 
and 
(B) securing issuance of and marketing 
offset credits under subtitle E of title VII of the 
Clean Air Act (as added by section 101 of this 
Act). 
(2) DISTRIBUTION.—The Secretary shall en-
sure, to the maximum extent practicable, that the 
handbook— 
(A) is made available through the Internet 
and in other electronic media; 
(B) includes, with respect to the electronic 
form of the handbook described in subpara-
graph (A), electronic forms and calculation 
tools to facilitate the offset credit approval 
process under subtitle E of title VII of the 
Clean Air Act (as added by section 101 of this 
Act); and 
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(C) is distributed widely through land- 
grant colleges and universities and other appro-
priate institutions. 
Subtitle E—Green Jobs Training 
and Worker Transition Assistance 
CHAPTER 1—GENERAL PROVISIONS 
SEC. 341. PURPOSES. 
The purposes of this subtitle are— 
(1) to support programs that provide worker 
training for high-quality jobs in the growing renew-
able energy and energy efficiency industries; and 
(2) to provide adjustment assistance, in the 
form of income support, training, assistance in pur-
chasing health care insurance, and job placement 
and relocation assistance, to any workers laid off as 
a result of the United States transition to a low-car-
bon economy. 
SEC. 342. DEFINITIONS. 
In this subtitle: 
(1) ADVERSELY
AFFECTED
EMPLOYMENT.— 
The term ‘‘adversely affected employment’’ means 
employment in a firm or appropriate subdivision of 
a firm, if workers of such firm or subdivision are eli-
gible to apply for adjustment assistance under this 
subtitle. 
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(2) ADVERSELY
AFFECTED
WORKER.—The 
term ‘‘adversely affected worker’’ means an indi-
vidual who, because of lack of work in adversely af-
fected employment— 
(A) has been totally separated or partially 
separated from adversely affected employment, 
or 
(B) has been totally separated from em-
ployment with the firm in a subdivision of 
which adversely affected employment exists. 
(3) AVERAGE WEEKLY WAGE.— 
(A) IN
GENERAL.—The term ‘‘average 
weekly wage’’ means one-thirteenth of the total 
wages paid to an individual in the high calendar 
quarter. 
(B) OTHER DEFINITIONS.—In this para-
graph: 
(i) HIGH CALENDAR QUARTER.—The 
term ‘‘high calendar quarter’’ means the 
calendar quarter in which the individual’s 
total wages were highest among the first 4 
of the last 5 completed calendar quarters 
immediately before the calendar quarter in 
which occurs the week with respect to 
which the computation is made. Such week 
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shall be the week in which total separation 
from adversely affected employment oc-
curred, or, in cases in which partial sepa-
ration from adversely affected employment 
is claimed, an appropriate week, as defined 
in regulations prescribed by the Secretary. 
(ii) CALENDAR QUARTER.—The term 
‘‘calendar quarter’’ means any 3-month pe-
riod beginning on January 1, April 1, July 
1, or October 1 of a calendar year. 
(4) CLIMATE
CHANGE
WORKER
TRANSITION 
FUND.—The term ‘‘Climate Change Worker Transi-
tion Fund’’ means the Climate Change Worker 
Transition Fund established under section 722 of 
the Clean Air Act (as added by section 101 of this 
Act). 
(5) PARTIAL
SEPARATION; PARTIALLY
SEPA-
RATED.— 
(A) IN GENERAL.—The term ‘‘partial sep-
aration’’ or ‘‘partially separated’’ means, with 
respect to an individual who has not been to-
tally separated, that— 
(i) the individual’s hours of work have 
been reduced to 80 percent or less of the 
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individual’s average weekly hours in ad-
versely affected employment, and 
(ii) the individual’s wages have been 
reduced to 80 percent or less of the indi-
vidual’s average weekly wage in adversely 
affected employment. 
(B) AVERAGE
WEEKLY
HOURS.—In this 
paragraph, the term ‘‘average weekly hours’’ 
means the average hours worked by the indi-
vidual (excluding overtime) in the employment 
from which he has been or claims to have been 
separated in the 52 weeks (excluding weeks 
during which the individual was sick or on vaca-
tion) preceding the week specified in the last 
sentence of paragraph (3)(B)(i) of this section. 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Labor. 
(7) 
STATE; 
UNITED
STATES.—The 
term 
‘‘State’’ means any of the several States, the Dis-
trict of Columbia, the Commonwealth of Puerto 
Rico, American Samoa, the United States Virgin Is-
lands, Guam, or the Commonwealth of the Northern 
Mariana Islands. The term ‘‘United States’’, when 
used in the geographical sense, includes each of the 
territories identified in the preceding sentence. 
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242 
(8) STATE AGENCY.—The term ‘‘State agency’’ 
means the agency of the State which administers the 
State law. 
(9) STATE LAW.—The term ‘‘State law’’ means 
the unemployment compensation law of the State, 
approved by the Secretary of Labor under section 
3304 of the Internal Revenue Code of 1986. 
(10) TOTAL
SEPARATION; 
TOTALLY
SEPA-
RATED.—The term ‘‘total separation’’ or ‘‘totally 
separated’’ means, with respect to an individual, the 
layoff or severance of the individual from employ-
ment with a firm in which, or in a subdivision of 
which, adversely affected employment exists. 
(11) UNEMPLOYMENT COMPENSATION BENEFIT 
PERIOD.— 
(A) IN GENERAL.—The term ‘‘unemploy-
ment compensation benefit period’’ means, with 
respect to an individual— 
(i) the benefit year and any ensuing 
period, as determined under applicable 
State law, during which the individual is 
eligible for regular compensation, addi-
tional compensation, or extended com-
pensation, or 
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243 
(ii) the equivalent to such a benefit 
year or ensuing period provided for under 
the applicable Federal unemployment in-
surance law. 
(B) OTHER DEFINITIONS.—In this para-
graph, the terms ‘‘regular compensation’’, ‘‘ex-
tended compensation’’, and ‘‘additional com-
pensation’’ have the meanings given such terms 
in paragraphs (2), (3), and (4) of section 205 
of the Federal-State Extended Unemployment 
Compensation Act of 1970 (26 U.S.C. 3304 
note.). 
(12) UNEMPLOYMENT INSURANCE.—The term 
‘‘unemployment insurance’’ means the unemploy-
ment compensation payable to an individual under 
any State law or Federal unemployment compensa-
tion law, including chapter 85 of title 5, United 
States Code, and the Railroad Unemployment Insur-
ance Act. 
(13) WEEK OF UNEMPLOYMENT.— 
(A) IN GENERAL.—The term ‘‘week of un-
employment’’ means a week of total, part-total, 
or partial unemployment, as determined under 
the applicable State law or Federal unemploy-
ment insurance law. 
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244 
(B) WEEK.—In this paragraph, the term 
‘‘week’’ means a week as defined in the applica-
ble State law. 
SEC. 343. FUNDING. 
(a) IN GENERAL.—Funds deposited in the Climate 
Change Worker Transition Fund shall be available for ex-
penditure by the Secretary, in accordance with this sec-
tion, without further appropriation or fiscal year limita-
tion. 
(b) ENERGY EFFICIENCY AND RENEWABLE ENERGY 
WORKER TRAINING PROGRAM.—In each of fiscal years 
2010 through 2050, the Secretary shall use 25 percent 
of the funds deposited in the Climate Change Worker 
Transition Fund to implement the energy efficiency and 
renewable energy worker training program established 
under section 171(e) of the Workforce Investment Act of 
1998 (29 U.S.C. 2916(e)). 
(c) ADJUSTMENT ASSISTANCE PROGRAM.— 
(1) IN GENERAL.—In each of fiscal years 2010 
through 2050, 75 percent of the funds deposited in 
the Climate Change Worker Transition Fund shall 
be available to the Secretary to carry out the worker 
transition program established under this subtitle. 
(2) REMAINING FUNDS.—If, at the end of any 
fiscal year, after the requirements for worker transi-
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245 
tion assistance under chapter 2 of this subtitle have 
been fully satisfied, any of the funds described in 
paragraph (1) remain unexpended, such funds shall 
be used to by the Secretary to implement the energy 
efficiency and renewable energy worker training pro-
gram described in subsection (b) of this section. 
SEC. 344. ESTABLISHMENT OF WORKER TRANSITION AS-
SISTANCE PROGRAM. 
(a) IN GENERAL.—Not later than 1 year after the 
date of the enactment of this Act, the Secretary shall es-
tablish a program to provide adjustment assistance under 
this subtitle to workers separated from employment as a 
result of the implementation of title VII of the Clean Air 
Act (as added by section 101 of this Act). 
(b) REGULATIONS.—The Secretary shall promulgate 
regulations, consistent with the requirements of this sub-
title, to implement the program established under sub-
section (a). 
SEC. 345. PETITION AND CERTIFICATION OF ELIGIBILITY. 
(a) FILING
OF PETITION.—A petition for certifi-
cation of eligibility to apply for adjustment assistance 
under this subtitle may be filed with the Secretary by any 
of the following: 
(1) A group of workers. 
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246 
(2) A certified or recognized union or other 
duly authorized representative of such workers. 
(3) Employers of such workers, one-stop opera-
tors or one-stop partners (as defined in section 101 
of the Workforce Investment Act of 1998 (29 U.S.C. 
2801)), including State employment security agen-
cies, or the State dislocated worker unit established 
under title I of such Act, on behalf of such workers. 
(b) DETERMINATION
BY
SECRETARY.—The Sec-
retary, within 30 days after receiving a petition under sub-
section (a), shall determine whether the petition meets the 
eligibility requirements described in section 346. Upon a 
determination that the petition meets such requirements, 
the Secretary shall issue to workers covered by the petition 
a certification of eligibility to apply for adjustment assist-
ance under this subtitle. 
SEC. 346. GROUP ELIGIBILITY REQUIREMENTS. 
(a) IN GENERAL.—A group of workers shall be eligi-
ble to apply for adjustment assistance under this subtitle 
pursuant to a petition filed under section 345(a) if the 
Secretary determines that— 
(1) a significant number or proportion of the 
workers in such workers’ firm, or an appropriate 
subdivision of the firm, have become totally sepa-
rated or partially separated, or are threatened to be-
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247 
come totally separated or partially separated, from 
adversely affected employment; 
(2) the sales or production, or both, of such 
firm or subdivision have decreased absolutely; and 
(3) compliance with the requirements of title 
VII of the Clean Air Act (as added by section 101 
of this Act) contributed importantly to such workers’ 
separation or threat of separation from employment. 
(b) 
DEFINITION
OF
‘‘CONTRIBUTED
IMPOR-
TANTLY’’.—In subsection (a)(3), the term ‘‘contributed 
importantly’’ means a cause which is important but not 
necessarily more important than any other cause. 
SEC. 347. BENEFIT INFORMATION FOR WORKERS. 
(a) IN GENERAL.—The Secretary shall provide full 
information to workers about the adjustment assistance 
under this subtitle and about the petition and application 
procedures, and the appropriate filing dates, for such ad-
justment assistance. The Secretary shall provide whatever 
assistance is necessary to enable groups of workers to pre-
pare petitions or applications for adjustment assistance 
under this subtitle. In providing such information and as-
sistance to workers under this section, the Secretary shall, 
to the extent possible, seek to cooperate with the certified 
or recognized union or other duly authorized representa-
tive of such workers. 
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248 
(b) NOTICE OF BENEFITS.— 
(1) TO WORKERS.—The Secretary shall provide 
written notice through the mail of the adjustment 
assistance available under this subtitle to each work-
er whom the Secretary has reason to believe is cov-
ered by a certification made under this subtitle— 
(A) at the time such certification is made, 
if the worker was partially separated or totally 
separated from adversely affected employment 
before such certification; or 
(B) at the time of total separation or par-
tial separation from adversely affected employ-
ment of the worker, if subparagraph (A) does 
not apply. 
(2) TO REPRESENTATIVES OF WORKERS.—The 
Secretary shall provide notice of the adjustment as-
sistance available under this subtitle to the certified 
or recognized union or other duly authorized rep-
resentative of workers described in paragraph (1). 
(3) GENERAL
PUBLICATION.—The Secretary 
shall publish notice of the adjustment assistance 
available under this subtitle to workers covered by 
each certification made under this subtitle in news-
papers of general circulation in the areas in which 
the workers reside and on the Internet. 
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249 
CHAPTER 2—PROGRAM BENEFITS 
SEC. 351. INCOME SUPPORT ASSISTANCE. 
(a) IN GENERAL.—An adversely affected worker who 
is covered by a certification issued by the Secretary under 
section 345(b) and who applies for adjustment assistance 
under this subtitle shall be provided income support assist-
ance in the form of a weekly adjustment allowance in ac-
cordance with the requirements of this section. 
(b) ELIGIBILITY REQUIREMENTS.—An adversely af-
fected worker shall be eligible to receive a weekly adjust-
ment allowance under this section if the following condi-
tions are met: 
(1) UNEMPLOYMENT.—The worker is unem-
ployed for the week for which the adjustment allow-
ance is paid. 
(2) DATE OF SEPARATION.—The worker’s total 
separation or partial separation from adversely af-
fected employment occurred— 
(A) on or after the date, as specified in the 
certification under which the worker is covered, 
on which total separation or partial separation 
from adversely affected employment began or 
threatened to begin; and 
(B) before the expiration of the 2-year pe-
riod beginning on the date on which the Sec-
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250 
retary’s determination under section 345(b) was 
made. 
(3) PRIOR EMPLOYMENT.—The worker had, in 
the 52-week period ending with the week in which 
total separation or partial separation from adversely 
affected employment occurred— 
(A) at least 26 weeks of employment in ad-
versely affected employment with a single firm 
or subdivision of a firm; or 
(B) if data with respect to weeks of em-
ployment with a firm are not available, equiva-
lent amounts of employment computed under 
regulations prescribed by the Secretary. 
(4) ENROLLMENT
IN
TRAINING
PROGRAM.— 
The worker— 
(A) is enrolled in a training program ap-
proved 
by 
the 
Secretary 
under 
section 
352(b)(2) and such enrollment began by the 
later of— 
(i) the last day of the 26th week of 
the worker’s initial unemployment com-
pensation benefit period; 
(ii) the last day of the 26th week after 
the week in which the Secretary issues a 
certification covering the worker; 
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303 
(v) consult with local governments, 
conservation organizations, scientists, and 
other interested stakeholders; and 
(vi) provide public notice and oppor-
tunity for comment. 
(C) CONTENTS.—The President shall in-
clude in the national adaptation strategy, at a 
minimum, prioritized goals and measures and a 
schedule for implementation— 
(i) to identify and monitor fish and 
wildlife, fish and wildlife habitat, plants, 
and associated ecological processes that are 
particularly likely to be adversely affected 
by climate change and ocean acidification 
and have the greatest need for conserva-
tion; 
(ii) to identify and monitor coastal, 
estuarine, marine, terrestrial, and fresh-
water habitats that are at the greatest risk 
of being damaged by climate change and 
ocean acidification; 
(iii) to assist species in adapting to 
the impacts of climate change and ocean 
acidification; 
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363 
negative determination, not later than 2 years 
after the specified date or the date of the deter-
mination, each State shall certify that the State 
has— 
‘‘(i) reviewed the revised code or 
standard; and 
‘‘(ii) updated the provisions of the res-
idential and commercial building codes of 
the State as necessary to meet or exceed, 
as applicable— 
‘‘(I) any provisions of a national 
code or standard determined to im-
prove energy efficiency in buildings; or 
‘‘(II) energy savings achieved by 
those provisions through other means. 
‘‘(c) ACHIEVEMENT OF COMPLIANCE BY STATES.— 
‘‘(1) IN
GENERAL.—Not later than 3 years 
after the date on which a State makes a certification 
under subsection (b), the State shall certify to the 
Secretary that the State has achieved compliance 
with the building energy code that is the subject of 
the certification. 
‘‘(2) RATE OF COMPLIANCE.—The certification 
shall include documentation of the rate of compli-
ance based on independent inspections of a random 
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364 
sample of the new and renovated buildings covered 
by the State code during the preceding calendar 
year. 
‘‘(3) COMPLIANCE.—A State shall be considered 
to achieve compliance for purposes of paragraph (1) 
if— 
‘‘(A) at least 90 percent of new and ren-
ovated buildings covered by the State code dur-
ing the preceding calendar year substantially 
meet all the requirements of the code; or 
‘‘(B) the estimated excess energy use of 
new and renovated buildings that did not meet 
the requirements of the State code during the 
preceding calendar year, as compared to a base-
line of comparable buildings that meet the re-
quirements of the code, is not more than 10 
percent of the estimated energy use of all new 
and renovated buildings covered by the State 
code during the preceding calendar year. 
‘‘(d) FAILURE TO CERTIFY.— 
‘‘(1) EXTENSION
OF
DEADLINES.—The Sec-
retary shall extend a deadline for certification by a 
State under subsection (b) or (c) for not more than 
1 additional year, if the State demonstrates to the 
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365 
satisfaction of the Secretary that the State has 
made— 
‘‘(A) a good faith effort to comply with the 
certification requirement; and 
‘‘(B) significant progress with respect to 
the compliance. 
‘‘(2) NONCOMPLIANCE BY STATE.— 
‘‘(A) IN GENERAL.—A State that fails to 
submit a certification required under subsection 
(b) or (c), and to which an extension is not pro-
vided under paragraph (1), shall be considered 
to be out of compliance with this section. 
‘‘(B) EFFECT ON LOCAL GOVERNMENTS.— 
A local government of a State that is out of 
compliance with this section may be considered 
to be in compliance with this section if the local 
government meets each applicable certification 
requirement of this section. 
‘‘(e) TECHNICAL ASSISTANCE.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
technical assistance (including building energy anal-
ysis and design tools, building demonstrations, and 
design assistance and training) to ensure that na-
tional model building energy codes and standards 
meet the goals described in subsection (a)(1). 
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366 
‘‘(2) ASSISTANCE TO STATES.—The Secretary 
shall provide technical assistance to States— 
‘‘(A) to implement this section, including 
procedures for States to demonstrate that the 
codes of the States achieve equivalent or great-
er energy savings than the national model codes 
and standards; 
‘‘(B) to improve and implement State resi-
dential and commercial building energy effi-
ciency codes; and 
‘‘(C) to otherwise promote the design and 
construction of energy-efficient buildings. 
‘‘(f) INCENTIVE FUNDING.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
incentive funding to States— 
‘‘(A) to implement this section; and 
‘‘(B) to improve and implement State resi-
dential and commercial building energy effi-
ciency codes, including increasing and verifying 
compliance with the codes. 
‘‘(2) AMOUNT.—In determining whether, and in 
what amount, to provide incentive funding under 
this subsection, the Secretary shall take into consid-
eration actions proposed by the State— 
‘‘(A) to implement this section; 
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