year in which the auction is being conducted 
and a portion of the emission allowances for fu-
ture vintage years; 
‘‘(B) may offer at any auction under this 
section emission allowances for vintage years of 
up to 6 years after the year in which the auc-
tion is being conducted; and 
‘‘(C) during a vintage year, shall make 
available for auction not less than 50 percent of 
the emission allowances established under sec-
tion 715 for the vintage year, including any 
such emissions allowances— 
‘‘(i) auctioned on consignment pursu-
ant to section 721; or 
‘‘(ii) made available for auction from 
the emissions containment reserve. 
‘‘(3) AUCTION FORMAT.—Auctions shall follow 
a single-round, sealed-bid, uniform price format. 
‘‘(4) PARTICIPATION; FINANCIAL ASSURANCE.— 
Auctions shall be open to any person, except that 
the Administrator may establish financial assurance 
requirements to ensure that auction participants will 
perform on their bids. 
‘‘(5) DISCLOSURE
OF
BENEFICIAL
OWNER-
SHIP.—Each bidder in an auction shall be required 
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to disclose the person or entity sponsoring or bene-
fiting from the bidder’s participation in the auction 
if such person or entity is, in whole or in part, other 
than the bidder. 
‘‘(6) PURCHASE LIMITS.—No person may, di-
rectly or in concert with one or more other partici-
pants, purchase more than 5 percent of the emission 
allowances offered at any quarterly auction. 
‘‘(7) PUBLICATION OF INFORMATION.—After an 
auction, the Administrator shall, in a timely fashion, 
publish the identities of winning bidders, the quan-
tity of emission allowances obtained by each winning 
bidder, and the auction clearing price determined by 
the Administrator. 
‘‘(b) REGULATIONS.— 
‘‘(1) INITIAL REGULATIONS.—Not later than 12 
months after the date of enactment of this title, the 
Administrator, in consultation with other Federal 
agencies, as appropriate, shall promulgate regula-
tions governing the auction of emission allowances 
under this section and section 721. 
‘‘(2) REVISED REGULATIONS.—Not earlier than 
January 1, 2030, the Administrator may, in con-
sultation with other Federal agencies, as appro-
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priate, at any time, revise the initial regulations pro-
mulgated under paragraph (1). 
‘‘(3) OTHER
REQUIREMENTS.—The Adminis-
trator may include in the regulations under this sub-
section such other requirements or provisions as the 
Administrator, in consultation with other Federal 
agencies, as appropriate, considers appropriate to 
promote effective, efficient, transparent, and fair ad-
ministration of auctions. 
‘‘(c) MINIMUM PRICE.—The minimum price for any 
emission allowance auctioned under this section shall be 
$15 for any auction occurring in calendar year 2027. The 
minimum price for an emission allowance auctioned under 
this section for any auction occurring after calendar year 
2027 shall be— 
‘‘(1) the minimum price applicable under this 
subsection for the previous calendar year; plus 
‘‘(2) the dollar amount that is equal to— 
‘‘(A) such minimum price; multiplied by 
‘‘(B) the percent that is the sum of— 
‘‘(i) 5 percent; plus 
‘‘(ii) the percentage change in the 
Consumer Price Index (for all urban con-
sumers) for the previous calendar year. 
‘‘(d) COST CONTAINMENT RESERVE.— 
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‘‘(1) IN GENERAL.—The Administrator shall— 
‘‘(A) establish a cost containment reserve; 
‘‘(B) deposit into such reserve emission al-
lowances established pursuant to paragraph (2) 
and emission allowances described in subsection 
(e)(4); and 
‘‘(C) make available for auction allowances 
in such reserve in accordance with paragraph 
(4). 
‘‘(2) DEPOSITS INTO RESERVE.— 
‘‘(A) FILLING THE RESERVE INITIALLY.— 
The Administrator shall establish, and deposit 
into the cost containment reserve, a quantity of 
emission allowances equal to the average annual 
aggregate quantity of greenhouse gas emissions 
in calendar years 2023, 2024, and 2025 from 
equivalent entities described in section 711(d) 
for the respective calendar years. 
‘‘(B) REFILLING
THE
RESERVE.—Fol-
lowing any auction under this section, if any 
emission allowances that were offered at the 
auction were not purchased, the Administrator 
shall— 
‘‘(i) deposit a quantity, as determined 
appropriate by the Administrator, of such 
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emission allowances in the cost contain-
ment reserve; and 
‘‘(ii) retire the remaining quantity of 
such emission allowances. 
‘‘(C) SPECIAL RULE.—If any emission al-
lowances established pursuant to subparagraph 
(A) remain in the cost containment reserve, the 
Administrator shall retire one such emission al-
lowance for each emission allowance deposited 
into the reserve under subparagraph (B). 
‘‘(3) PRICE TRIGGERS.— 
‘‘(A) 
ANNUAL
DETERMINATION.—Each 
calendar year, the Administrator shall set at 
least two price triggers at which, if the auction 
clearing price for an auction under this section 
would meet or exceed the price trigger, the Ad-
ministrator may offer at such auction emission 
allowances from the cost containment reserve. 
‘‘(B) LOWEST PRICE TRIGGER.—The Ad-
ministrator may not set a price trigger under 
subparagraph (A) for a calendar year that is 
less than 4 multiplied by the minimum price of 
an emission allowance for that calendar year 
under subsection (c). 
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‘‘(4) RELEASE OF EMISSION ALLOWANCES.—If 
the auction clearing price for an auction conducted 
under this section meets or exceeds a price trigger 
set under paragraph (3), the Administrator may, 
with respect to such a price trigger, offer at such 
auction up to 5 percent of the emission allowances 
in the cost containment reserve at the beginning of 
the calendar year. For any auction under this sec-
tion, the Administrator may not offer more than 10 
percent of the emission allowances in the cost con-
tainment reserve. 
‘‘(e) EMISSIONS CONTAINMENT RESERVE.— 
‘‘(1) IN GENERAL.—The Administrator shall— 
‘‘(A) establish an emissions containment 
reserve; 
‘‘(B) each calendar year, deposit into such 
reserve 10 percent of the emission allowances 
established under section 715 for such calendar 
year; and 
‘‘(C) make available for auction emission 
allowances in such reserve pursuant to para-
graph (3). 
‘‘(2) PRICE TRIGGERS.— 
‘‘(A) 
ANNUAL
DETERMINATION.—Each 
calendar year, the Administrator shall set at 
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least two price triggers at which, if the auction 
clearing price for an auction under this section 
would meet or exceed the price trigger, the Ad-
ministrator will make available for auction 
emission allowances from the emissions contain-
ment reserve. 
‘‘(B) LOWEST PRICE TRIGGER.—The Ad-
ministrator may not set a price trigger under 
subparagraph (A) for a calendar year that is 
less than 125 percent of the minimum price of 
an emission allowance for that calendar year 
under subsection (c). 
‘‘(3) RELEASE OF EMISSION ALLOWANCES.—At 
any auction under this section, the Administrator— 
‘‘(A) may not offer more than 25 percent 
of the emission allowances deposited into the 
emissions containment reserve for the respective 
calendar year at any of the auctions under this 
section in such calendar year; and 
‘‘(B) for each price trigger met or exceeded 
by the auction clearing price, the Administrator 
may offer up to 12.5 percent of the emission al-
lowances deposited into the emissions contain-
ment reserve for the respective calendar year. 
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‘‘(2) TRANSPARENCY.—The Administrator shall 
publish— 
‘‘(A) the names of entities holding emission 
allowances that are made available for auction 
on consignment pursuant to paragraph (1); 
‘‘(B) the quantities of emission allowances 
that are so made available for auction; and 
‘‘(C) any additional information relating to 
emission allowances that are so made available 
for auction, as determined by the Adminis-
trator. 
‘‘(c) PROCEEDS.—Notwithstanding section 3302 of 
title 31, United States Code— 
‘‘(1) the Federal Government shall, not later 
than 90 days after receipt of the proceeds from any 
auction on consignment pursuant to subsection 
(b)(1), transfer such proceeds to the entity that re-
quested the Administrator offer the respective emis-
sion allowances at an auction under section 720; and 
‘‘(2) no such proceeds shall be held by any offi-
cer or employee of the United States or treated for 
any purpose as public monies. 
‘‘(d) UNSOLD EMISSION ALLOWANCES.—The Admin-
istrator shall return to the entity offering an emission al-
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lowance at auction on consignment pursuant to this sec-
tion any such allowance that is not sold at the auction. 
‘‘SEC. 722. ALLOCATION OF EMISSION ALLOWANCES. 
‘‘(a) FOR THE BENEFIT OF CONSUMERS.— 
‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2027, the Administrator shall allocate emission 
allowances established each calendar year under sec-
tion 715(a) to States and Indian Tribes in the fol-
lowing amounts: 
‘‘(A) For compliance period 1, 30 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(B) For compliance period 2, 27 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(C) For compliance period 3, 24 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(D) For compliance period 4, 21 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
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‘‘(E) For compliance period 5, 18 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(F) For compliance period 6, 15 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(G) For compliance period 7, 12 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(H) For compliance period 8, 9 percent of 
the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(I) For compliance period 9, 6 percent of 
the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(J) For compliance period 10, 3 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
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‘‘(K) For each subsequent compliance pe-
riod, 0 percent of the emission allowances es-
tablished for each year of such compliance peri-
ods under section 715(a). 
‘‘(2) DISTRIBUTION.—Not later than December 
31 of each year, the Administrator shall distribute 
among States and Indian Tribes the quantity of 
emission allowances allocated under paragraph (1) 
for the following vintage year, ratably based on the 
ratio of— 
‘‘(A) the aggregate quantity of greenhouse 
gases emitted within a jurisdiction in the sec-
ond preceding vintage year associated with the 
combustion of fuels for— 
‘‘(i) electricity generation; and 
‘‘(ii) residential and commercial end 
uses of fuels, excluding end uses related to 
transportation; to 
‘‘(B) the aggregate quantity of greenhouse 
gases emitted within the United States in the 
second preceding vintage year associated with 
the combustion of fuels for— 
‘‘(i) electricity generation; and 
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‘‘(ii) residential and commercial end 
uses of fuels, excluding end uses related to 
transportation. 
‘‘(3) USE OF EMISSION ALLOWANCES.—States 
and Indian Tribes shall— 
‘‘(A) sell, on consignment in accordance 
with section 721, the emission allowances allo-
cated under this subsection and use the pro-
ceeds of such sales exclusively for the benefit of 
consumers of electricity and residential and 
commercial end users of fuels by carrying out 
a— 
‘‘(i) cost-effective energy efficiency 
program to reduce the use of electricity 
and fuel; 
‘‘(ii) rebate or other financial incen-
tive program to encourage adoption and 
use of low-emission fuel alternatives, which 
may include a program that provides for 
electrification; or 
‘‘(iii) rebate or other direct financial 
assistance program, which may include a 
low-income ratepayer assistance program; 
or 
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‘‘(B) transfer, on a nonreimburseable 
basis, such emission allowances to one or more 
covered entities responsible for greenhouse gas 
emissions or attributable greenhouse gas emis-
sions within the jurisdiction of the State or In-
dian Tribe to be used by such entities exclu-
sively for the benefit of consumers of electricity 
and residential and commercial end users of 
fuels. 
‘‘(4) ADMINISTRATIVE EXPENSES.—States and 
Indian Tribes may use up to 5 percent of the pro-
ceeds from the sale of emission allowances allocated 
under this subsection for administrative purposes in 
carrying out programs under paragraph (3). 
‘‘(5) REPORTING.—Each State and Indian 
Tribe receiving emission allowances under this sub-
section shall submit to the Administrator, not later 
than 12 months after each receipt of such emission 
allowances, a report, in accordance with such re-
quirements as the Administrator may prescribe, 
that— 
‘‘(A) describes the use of emission allow-
ances sold or transferred under paragraph (3), 
including a description of the energy efficiency, 
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fuel switching, and consumer assistance pro-
grams supported pursuant to paragraph (3); 
‘‘(B) includes an evaluation, prepared by 
an independent third party, of the performance 
of the energy efficiency, fuel switching, and con-
sumer assistance programs supported pursuant 
to paragraph (3); and 
‘‘(C) describes any transfer of emission al-
lowances to covered entities under paragraph 
(3)(B). 
‘‘(6) ENFORCEMENT.—If the Administrator de-
termines a State or Indian Tribe is not in compli-
ance with this subsection, the Administrator may— 
‘‘(A)(i) withhold a portion of emission al-
lowances under this subsection that would oth-
erwise be distributed to the State or Indian 
Tribe for the next vintage year; and 
‘‘(ii) distribute such withheld emission al-
lowances among the remaining States and In-
dian Tribes ratably in accordance with the for-
mula under paragraph (2); or 
‘‘(B)(i) withhold a portion of emission al-
lowances under this subsection that would oth-
erwise be distributed to the State or Indian 
Tribe for the next vintage year; and 
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‘‘(ii) 
directly 
transfer, 
on 
a 
nonreimburseable basis, such withheld emission 
allowances to one or more covered entities re-
sponsible for greenhouse gas emissions or at-
tributable greenhouse gas emissions within the 
jurisdiction of such State or Indian Tribe to be 
used by such entities exclusively for the benefit 
of consumers as described in paragraph (3)(A). 
‘‘(b) ENERGY-INTENSIVE, TRADE-EXPOSED INDUS-
TRIES.— 
‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2027, the Administrator shall allocate emission 
allowances to eligible industry sectors designated 
and listed under section 723(a)(1), to be distributed 
in accordance with section 723, in the following 
amounts: 
‘‘(A) For compliance periods 1 and 2, 15 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(B) For compliance periods 3 and 4, 12 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
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‘‘(C) For compliance periods 5 and 6, 9 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(D) For compliance periods 7 and 8, 6 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(E) For compliance periods 9 and 10, 3 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(F) For each subsequent compliance pe-
riod, 0 percent of the emission allowances es-
tablished for each year of such compliance peri-
ods under section 715(a). 
‘‘(2) CARRYOVER.—After the Administrator dis-
tributes emission allowances pursuant to section 723 
for any vintage year, any emission allowances allo-
cated to eligible industry sectors designated and list-
ed under section 723(a)(1) pursuant to this sub-
section that have not been so distributed shall— 
‘‘(A) remain available for distribution pur-
suant to section 723 for the following vintage 
year; and 
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‘‘(B) be treated as part of the allocation to 
such entities for that following vintage year. 
‘‘(c) LOW-INCOME
CONSUMERS.—Beginning with 
vintage year 2027, the Administrator shall make available 
for auction, pursuant to section 720, 15 percent of the 
emission allowances established for each year under sec-
tion 715(a). The proceeds from such auction shall be made 
available to the Secretary of the Treasury to provide re-
bates under section 102 of the Climate Pollution Standard 
and Community Investment Act of 2025. 
‘‘(d) STATE, TERRITORIAL, AND TRIBAL GOVERN-
MENTS.—Beginning with vintage year 2027, the Adminis-
trator shall make available for auction, pursuant to section 
720, 10 percent of the emission allowances established for 
each year under section 715(a), with the proceeds distrib-
uted to States and Indian Tribes pursuant to section 724. 
‘‘(e) LOCAL GOVERNMENTS.—Beginning with vintage 
year 2027, the Administrator shall make available for auc-
tion, pursuant to section 720, 5 percent of the emission 
allowances established for each year under section 715(a). 
The proceeds from such auction shall be made available 
to the Secretary of Energy to carry out subtitle E of title 
V of the Energy Independence and Security Act of 2007. 
‘‘(f) JURISDICTIONS
HOSTING
HIGH-LEVEL
NU-
CLEAR WASTE.— 
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‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2027, the Administrator shall make available 
for auction, pursuant to section 720, 0.5 percent of 
the emission allowances established for each year 
under section 715(a), with the proceeds provided to 
each State and Indian Tribe for which a repository 
where high-level radioactive waste and spent nuclear 
fuel are permanently disposed of is located within 
the jurisdiction of the State or Indian Tribe. 
‘‘(2) NO ELIGIBLE STATE OR INDIAN TRIBE.— 
If no State or Indian Tribe is eligible to be provided 
proceeds under this subsection with respect to a vin-
tage year, such proceeds shall be provided to States 
and Indian Tribes pursuant to section 724. 
‘‘(3) MULTIPLE STATES OR INDIAN TRIBES.—If 
more than one State or Indian Tribe is eligible for 
proceeds under this subsection with respect to a vin-
tage year, such proceeds shall be distributed ratably 
among such States and Indian Tribes based on the 
ratio of— 
‘‘(A) the mass of high-level radioactive 
waste and spent nuclear fuel permanently dis-
posed of within the jurisdictions of the respec-
tive States or Indian Tribes; relative to 
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‘‘(B) the mass of high-level radioactive 
waste and spent nuclear fuel permanently dis-
posed of in the United States. 
‘‘(g) WORKER AND COMMUNITY ASSISTANCE.— 
‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2027, the Administrator shall make available 
for auction, pursuant to section 720, 5 percent of 
the emission allowances established for each year 
under section 715(a), with the proceeds deposited 
into the Worker and Community Assistance Fund 
established under section 103 of the Climate Pollu-
tion Standard and Community Investment Act of 
2025. 
‘‘(2) DETERMINATION
OF
ADDITIONAL
REVE-
NUES NEEDED.—For any year, the Administrator, 
in consultation with the Secretary of the Treasury, 
the Secretary of Labor, and the Director of the Of-
fice of Energy and Economic Transition as estab-
lished by section 203 of the Climate Pollution 
Standard and Community Investment Act of 2025— 
‘‘(A) may determine that additional rev-
enue is necessary to carry out sections 206, 
207, and 208 of the Climate Pollution Standard 
and Community Investment Act of 2025; and 
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‘‘(B) if emission allowances are available 
and upon a determination under subparagraph 
(A), may offer at an auction pursuant to sec-
tion 720, in addition to the emission allowances 
made available for auction pursuant to para-
graph (1), up to 5 percent of emissions allow-
ances established for such year under section 
715(a), with the proceeds deposited into the 
Worker and Community Assistance Fund estab-
lished under section 103 of the Climate Pollu-
tion Standard and Community Investment Act 
of 2025. 
‘‘(h) FRONTLINE COMMUNITIES.—Beginning with 
vintage year 2027, the Administrator shall make available 
for auction, pursuant to section 720, 10 percent of the 
emission allowances established for each year under sec-
tion 715(a), with the proceeds deposited into the Cleaner 
Air Community Fund established under section 104 of the 
Climate Pollution Standard and Community Investment 
Act of 2025. 
‘‘(i) NEGATIVE EMISSIONS ACTIVITIES.—The Admin-
istrator shall make available for auction, pursuant to sec-
tion 720, emission allowances established for each year 
under section 715(a), with the proceeds deposited into the 
Negative Emissions Activities Fund established under sec-
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tion 105 of the Climate Pollution Standard and Commu-
nity Investment Act of 2025, in the following amounts: 
‘‘(1) For compliance periods 1 and 2, 2.5 per-
cent of the emission allowances established for each 
year of such compliance periods under section 
715(a). 
‘‘(2) For compliance periods 3 and 4, 5 percent 
of the emission allowances established for each year 
of such compliance periods under section 715(a). 
‘‘(3) For compliance periods 5 and 6, 7.5 per-
cent of the emission allowances established for each 
year of such compliance periods under section 
715(a). 
‘‘(4) For compliance periods 7 and 8, 10 per-
cent of the emission allowances established for each 
year of such compliance periods under section 
715(a). 
‘‘(5) For compliance periods 9 and 10, 15 per-
cent of the emission allowances established for each 
year of such compliance periods under section 
715(a). 
‘‘(6) For each subsequent compliance period, 20 
percent of the emission allowances established for 
each year of such compliance period under section 
715(a). 
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‘‘(j) ENERGY INNOVATION FUND.—Beginning with 
vintage year 2027, the Administrator shall make available 
for auction, pursuant to section 720, 2.5 percent of the 
emission allowances established for each year under sec-
tion 715(a), with the proceeds deposited into the Energy 
Innovation Fund established under section 106 of the Cli-
mate Pollution Standard and Community Investment Act 
of 2025. 
‘‘SEC. 723. OUTPUT-BASED DISTRIBUTIONS FOR ENERGY-IN-
TENSIVE, TRADE-EXPOSED INDUSTRIES. 
‘‘(a) DESIGNATION OF ELIGIBLE INDUSTRIAL SEC-
TORS.— 
‘‘(1) IN GENERAL.—The Administrator shall— 
‘‘(A) designate (using the six-digit classi-
fication system of the North American Indus-
trial Classification System of 2002 or a super-
seding classification system) eligible industrial 
sectors based on the criteria described in para-
graph (3); and 
‘‘(B) maintain a list of such eligible indus-
trial sectors. 
‘‘(2) ELIGIBLE INDUSTRIAL SECTOR LIST.— 
‘‘(A) INITIAL LIST.—Not later than June 
30, 2026, the Administrator shall publish in the 
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Federal Register a list of eligible industrial sec-
tors designated under this subsection. 
‘‘(B) SUBSEQUENT LISTS.—Not later than 
June 30, 2032, and not less than every 6 years 
thereafter, the Administrator shall publish in 
the Federal Register an updated version of the 
list published under subparagraph (A). 
‘‘(3) ELIGIBILITY CRITERIA.— 
‘‘(A) IN GENERAL.—To be designated as 
an eligible industrial sector under this sub-
section, an industrial sector shall meet the cri-
teria in— 
‘‘(i) both subparagraphs (B) and (C); 
or 
‘‘(ii) subparagraph (D). 
‘‘(B) ENERGY OR GREENHOUSE GAS IN-
TENSITY.—An industrial sector meets the cri-
teria in this subparagraph if the sector has— 
‘‘(i) an energy intensity of at least 5 
percent, calculated by dividing— 
‘‘(I) the cost of purchased elec-
tricity and fuel of such sector; by 
‘‘(II) the value of the shipments 
of such sector; or 
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‘‘(ii) a greenhouse gas intensity of at 
least 5 percent, calculated by dividing— 
‘‘(I) the number of tons of green-
house gas emissions (including direct 
emissions from fuel combustion, proc-
ess emissions, and indirect emissions 
from the generation of electricity used 
to produce the output of the sector) of 
such sector, multiplied by 20; by 
‘‘(II) the value of the shipments 
of such sector. 
‘‘(C) TRADE
INTENSITY.—An industrial 
sector meets the criteria in this subparagraph if 
the sector has a trade intensity of at least 15 
percent, calculated by dividing— 
‘‘(i) the value of the imports and ex-
ports of such sector; by 
‘‘(ii) the sum of the value of the ship-
ments and the value of imports of such 
sector. 
‘‘(D) VERY
HIGH
ENERGY
OR
GREEN-
HOUSE GAS INTENSITY.—An industrial sector 
meets the criteria in this subparagraph if the 
sector has— 
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‘‘(i) an energy intensity of at least 20 
percent, as calculated under subparagraph 
(B)(i); or 
‘‘(ii) a greenhouse gas intensity of at 
least 20 percent, as calculated under sub-
paragraph (B)(ii). 
‘‘(4) USE OF DATA.—When determining the eli-
gibility of an industrial sector, or a subgroup of enti-
ties within an industrial sector, under this sub-
section— 
‘‘(A) the Administrator shall use the aver-
age annual data for the most recent 4 years for 
which such data are available; 
‘‘(B) if data are unavailable for any indus-
trial sector at the six-digit classification level 
referred to in paragraph (1)(A), the Adminis-
trator may extrapolate the information nec-
essary to determine the eligibility of a sector 
from available data pertaining to a broader in-
dustrial category classified in— 
‘‘(i) the North American Industrial 
Classification System of 2002; or 
‘‘(ii) a superseding classification sys-
tem; 
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‘‘(C) the Administrator may request any 
additional information, as determined necessary 
by the Administrator, from any owner or oper-
ator of an entity in a potentially eligible indus-
trial sector; and 
‘‘(D) the Administrator shall seek informa-
tion from the owner or operator of an entity in 
a potentially eligible industrial sector that pro-
duces more than one product at a facility in 
order to attribute energy usage and greenhouse 
gas emissions associated with the production of 
each product type. 
‘‘(5) LISTING OF SUBGROUPS AS AN ELIGIBLE 
INDUSTRIAL SECTOR.— 
‘‘(A) DESIGNATION OF SUBGROUPS.—The 
Administrator may, pursuant to paragraph (1), 
designate and list a subgroup of entities within 
an industrial sector as a separate eligible indus-
trial sector if the subgroup of entities meets the 
eligibility criteria in paragraph (3)(A) for des-
ignation as an eligible industrial sector. 
‘‘(B) DETERMINATION.—In determining 
under paragraph (3)(A) whether a subgroup of 
entities meets the criteria under subparagraphs 
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(B) and (C) or (D) of such paragraph, the Ad-
ministrator shall consider— 
‘‘(i) the energy intensity, greenhouse 
gas intensity, and trade intensity of the in-
dustrial sector represented by such sub-
group of entities; and 
‘‘(ii) the products manufactured by 
the subgroup and not the industrial proc-
ess by which such products are manufac-
tured, except that the Administrator may 
determine a subgroup of entities that man-
ufacture a product primarily from virgin 
material to be listed as a separate eligible 
industrial sector from another subgroup of 
entities that manufacture the same product 
primarily from recycled material. 
‘‘(6) INDIVIDUAL PETITION FOR ELIGIBILITY.— 
‘‘(A) PETITION.—The owner or operator of 
an entity in an industrial sector may petition 
the Administrator to designate, pursuant to 
paragraph (5), one or more entities in such in-
dustrial sector as an eligible industrial sector. 
‘‘(B) FINAL
ACTION.—Not later than 6 
months after the receipt of a petition under 
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subparagraph (A), the Administrator shall take 
final action on such petition. 
‘‘(7) SPECIAL CASES.— 
‘‘(A) IRON AND STEEL SECTOR.—For pur-
poses of this section, the Administrator shall 
consider as being in different industrial sec-
tors— 
‘‘(i) entities using integrated iron and 
steelmaking technologies (including coke 
ovens, 
blast 
furnaces, 
and 
other 
ironmaking technologies); and 
‘‘(ii) entities using electric arc furnace 
technologies. 
‘‘(B) METAL, SODA ASH, OR PHOSPHATE 
PRODUCTION CLASSIFIED UNDER MORE THAN 
ONE NAICS CODE.—For purposes of this sec-
tion, the Administrator— 
‘‘(i) may not aggregate data for the 
beneficiation or other processing (including 
agglomeration) of metal ores, soda ash, or 
phosphate with subsequent steps in the 
process of metal, soda ash, or phosphate 
manufacturing; 
‘‘(ii) shall consider the beneficiation or 
other processing (including agglomeration) 
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of metal ores, soda ash, or phosphate to be 
in separate industrial sectors from the 
metal, soda ash, or phosphate manufac-
turing sectors; and 
‘‘(iii) shall treat industrial sectors that 
beneficiate or otherwise process (including 
agglomeration) metal ores, soda ash, or 
phosphate as ineligible to receive emission 
allowances under this section related to the 
activity of extracting metal ores, soda ash, 
or phosphate. 
‘‘(C) PETROLEUM
REFINING.—Industrial 
sectors that refine petroleum products may not 
be designated and listed as an eligible industrial 
sector under this section. 
‘‘(b) OUTPUT-BASED ALLOCATION BENCHMARKS.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
determine the average greenhouse gas emissions per 
unit of output for each eligible industrial sector des-
ignated and listed under subsection (a)(1) (referred 
to in this subsection as the ‘output-based allocation 
benchmark’ for such sector). 
‘‘(2) CALCULATING BENCHMARK.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall calculate the output-based allocation 
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benchmark for each eligible industrial sector 
based on the greenhouse gas emissions, includ-
ing direct emissions, process emissions, and in-
direct emissions, expressed in tons of carbon di-
oxide equivalent, per unit of output, for such el-
igible industrial sector using an average of the 
3 most recent years of the best available data 
for such eligible industrial sector. 
‘‘(B) 
CALCULATING
INDIRECT
EMIS-
SIONS.—Each person selling electricity to the 
owner or operator of an entity in an eligible in-
dustrial sector shall— 
‘‘(i) provide the owner or operator of 
the entity and the Administrator relevant 
greenhouse gas emissions data for such en-
tity; and 
‘‘(ii) where it is not possible to deter-
mine the precise indirect greenhouse gas 
emissions for such entity, use the monthly 
average data reported by the Energy Infor-
mation Administration or collected and re-
ported for the electric utility serving the 
entity to determine greenhouse gas emis-
sions. 
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‘‘(C) MULTIPLE
ELIGIBLE
INDUSTRIAL 
SECTORS
AT
ONE
FACILITY.—The Adminis-
trator shall seek information from the owner or 
operator of an entity in an eligible industrial 
sector that produces more than one product at 
a facility in order to attribute energy usage and 
greenhouse gas emissions associated with the 
production of each product type at such facility. 
‘‘(3) DATA SOURCES.—For the purposes of this 
subsection, the Administrator— 
‘‘(A) shall use data— 
‘‘(i) reported to the Environmental 
Protection Agency; 
‘‘(ii) reported to other Federal agen-
cies; and 
‘‘(iii) from each owner or operator of 
an entity in an eligible industrial sector; 
and 
‘‘(B) may require an owner or operator of 
an entity in an eligible industrial sector to pro-
vide such information as the Administrator 
finds necessary to determine the output-based 
allocation benchmark for such eligible industrial 
sector. 
‘‘(c) DISTRIBUTION OF EMISSION ALLOWANCES.— 
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‘‘(1) IN GENERAL.—For each vintage year, the 
Administrator shall— 
‘‘(A) distribute pursuant to this section 
emission allowances allocated under section 
722(b), not later than October 31 of the pre-
ceding calendar year; and 
‘‘(B) make such annual distributions to the 
owner or operator of each entity responsible for 
output in an eligible industrial sector listed 
under subsection (a) in the amount of emission 
allowances calculated under this subsection. 
‘‘(2) ASSISTANCE FACTOR.—For the purpose of 
distributing emission allowances under this sub-
section, the Administrator shall use the following 
(referred to in this subsection as an ‘assistance fac-
tor’): 
‘‘(A) For compliance period 1, 1.0. 
‘‘(B) For compliance period 2, 0.9. 
‘‘(C) For compliance period 3, 0.8. 
‘‘(D) For compliance period 4, 0.7. 
‘‘(E) For compliance period 5, 0.6. 
‘‘(F) For compliance period 6, 0.5. 
‘‘(G) For compliance period 7, 0.4. 
‘‘(H) For compliance period 8, 0.3. 
‘‘(I) For compliance period 9, 0.2. 
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‘‘(J) For compliance period 10, 0.1. 
‘‘(K) For each subsequent compliance pe-
riod, 0. 
‘‘(3) AMOUNT
OF
EMISSION
ALLOWANCES.— 
The amount of emission allowances to be distributed 
to the owner or operator of an entity in an eligible 
industrial sector shall be calculated by— 
‘‘(A) the output-based allocation bench-
mark calculated pursuant to subsection (b) of 
the industrial sector of such entity; multiplied 
by 
‘‘(B) the average annual output of such 
entity for the 2 years preceding the year of the 
distribution; multiplied by 
‘‘(C) the appropriate assistance factor 
under paragraph (2). 
‘‘(4) NEW
ENTITIES.—Not later than 24 
months after the date of enactment of this title, the 
Administrator shall issue regulations governing the 
distribution of emission allowances for the first 4 
years of operation of a new entity in an eligible in-
dustrial sector. These regulations shall provide for— 
‘‘(A) the distribution of emission allow-
ances to such entities based on comparable enti-
ties in the same eligible industrial sector; and 
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‘‘(B) an adjustment in the third and 
fourth years of operation to reconcile the total 
amount of emission allowances received during 
the first 4 years of operation of the new entity 
to the amount the entity would have received 
during such years of operation had the appro-
priate data been available for the first and sec-
ond years of operation. 
‘‘(d) TOTAL MAXIMUM DISTRIBUTION.—The Admin-
istrator may not distribute more emission allowances for 
any vintage year pursuant to this section than are allo-
cated for use pursuant to section 722(b) for that vintage 
year. For any vintage year for which the total emission 
allowances calculated for distribution pursuant to this sec-
tion would exceed the number of emission allowances allo-
cated pursuant to section 722(b), the Administrator shall 
reduce each entity’s distribution on a pro rata basis so 
that the total distribution of emission allowances under 
this section equals the number of emission allowances allo-
cated under section 722(b). 
‘‘(e) CESSATION OF QUALIFYING ACTIVITIES.—If, as 
determined by the Administrator, an entity is no longer 
in an eligible industrial sector— 
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‘‘(1) the Administrator may not distribute emis-
sion allowances to the owner or operator of such en-
tity under this section; and 
‘‘(2) the owner or operator of such entity shall 
return to the Administrator— 
‘‘(A) all emissions allowances that have 
been distributed under this section to the owner 
or operator for future vintage years; and 
‘‘(B) a prorated amount of emission allow-
ances distributed under this section for the vin-
tage year in which the entity ceases to be in an 
eligible industrial sector. 
‘‘SEC. 724. ASSISTANCE TO STATE, TERRITORIAL, AND TRIB-
AL GOVERNMENTS. 
‘‘(a) IN GENERAL.—The Administrator shall annu-
ally distribute to States and Indian Tribes the proceeds 
of emission allowances auctioned pursuant to section 
722(d). Such proceeds shall be used by States and Indian 
Tribes to provide financial assistance and incentives in ac-
cordance with subsection (e) that support the reduction 
of air pollution, including criteria air pollutants, haz-
ardous air pollutants, and emissions of greenhouse gases, 
or promote adaptation to climate change. 
‘‘(b) REGULATIONS.—Not later than 24 months after 
the date of enactment of this section, the Administrator 
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shall promulgate regulations to carry out this section, in-
cluding regulations— 
‘‘(1) to ensure that each State and Indian Tribe 
provides financial assistance and incentives effi-
ciently and in accordance with this section and ap-
plicable Federal laws; 
‘‘(2) to prevent waste, fraud, and abuse; 
‘‘(3) to identify the forms of financial assist-
ance and incentives that States and Indian Tribes 
may provide; and 
‘‘(4) to prescribe the form and content of re-
ports that States and Indian Tribes are required to 
submit under this section. 
‘‘(c) INTENDED USE PLANS.— 
‘‘(1) IN GENERAL.—After providing for public 
review and comment, each State and Indian Tribe 
receiving proceeds under this section shall annually 
prepare a plan that identifies the intended uses of 
such proceeds. 
‘‘(2) CONTENTS.—An intended use plan pre-
pared under paragraph (1) shall include— 
‘‘(A) a list of the projects or programs in-
tended to be funded in the next fiscal year that 
begins after the date of the plan, including a 
description of each project or program; and 
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‘‘(B) additional information as determined 
appropriate by the Administrator. 
‘‘(d) DISTRIBUTION AMONG STATES
AND INDIAN 
TRIBES.— 
‘‘(1) IN GENERAL.—Not later than September 
30 of each calendar year, the Administrator shall, in 
accordance with this section, distribute the proceeds 
of emission allowances auctioned pursuant to section 
722(d) each year in accordance with the following 
formula: 
‘‘(A) 25 percent shall be divided equally 
among the States. 
‘‘(B) 50 percent of the emission allowances 
shall be distributed ratably among the States 
and Indian Tribes based on the population of 
each State and Indian Tribe, as contained in 
the most recent census data available from the 
Bureau of the Census at the time the Adminis-
trator calculates the formula for distribution. 
‘‘(C) 25 percent shall be distributed rat-
ably among the States and Indian Tribes on the 
basis of the energy consumption of each State 
and Indian Tribe as contained in the most re-
cent State Energy Data System report of the 
Energy Information Administration (or such al-
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ternative reliable source as the Administrator 
may designate). 
‘‘(2) 
MINIMUM
AMOUNTS
FOR
INDIAN 
TRIBES.—The Administrator shall ensure that not 
less than 5 percent of the total proceeds distributed 
to States and Indian Tribes in each calendar year is 
distributed to Indian Tribes. 
‘‘(3) 
RECALCULATION
OF
DISTRIBUTION 
AMOUNTS.—The Administrator shall recalculate the 
amounts to be distributed as determined by the for-
mula in paragraph (1) not less frequently than once 
every 5 years. 
‘‘(e) USES.—The proceeds distributed to each State 
and Indian Tribe pursuant to this section may be used 
to provide grants, tax credits, production incentives, loans, 
loan guarantees, forgivable loans, interest rate buydowns, 
and other types of financial assistance and incentives that 
support or promote the following: 
‘‘(1) Zero-emission electricity generation, in-
cluding— 
‘‘(A) research, development, and dem-
onstration of zero-emission electricity genera-
tion projects; and 
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‘‘(B) deployment of community-scale, low- 
income, and distributed generation zero-emis-
sion electricity generation projects. 
‘‘(2) Energy storage projects. 
‘‘(3) Energy efficiency programs. 
‘‘(4) Grid modernization, including support for 
integration of renewable energy resources and dis-
tributed generation, demand response, demand side 
management, and systems analysis. 
‘‘(5) Deployment of zero-emission vehicles, in-
cluding light-, medium-, and heavy-duty vehicles. 
‘‘(6) Charging, refueling, and grid infrastruc-
ture enhancement to support zero-emission vehicles. 
‘‘(7) Design, construction, and maintenance to 
improve the resilience of existing and new infrastruc-
ture, including public health infrastructure, to the 
impacts of climate change, including wildfires, 
drought, flooding, and other extreme weather events. 
‘‘(8) Electrification of residential and commer-
cial products that reduces demand for natural gas, 
heating oil, gasoline, diesel fuel, or propane. 
‘‘(9) Wildlife and natural resource adaptation, 
including— 
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‘‘(A) protection, maintenance, or restora-
tion of natural infrastructure such as wetlands, 
reefs, and barrier islands; 
‘‘(B) conservation or maintenance of public 
lands; 
‘‘(C) protection and restoration of water-
sheds; 
‘‘(D) floodplain restoration and flood pro-
tection in densely populated urban areas; and 
‘‘(E) mitigation of ocean-related climate 
change effects, including effects on bays, estu-
aries, populated barrier islands, and other 
ocean-related features. 
‘‘(10) Sustainable agricultural programs, in-
cluding promotion of soil health. 
‘‘(11) Food waste reduction programs. 
‘‘(12) Sustainable forest management and land 
use programs. 
‘‘(13) Reduction, capture, and use of methane 
from landfills and wastewater treatment facilities. 
‘‘(14) Material conservation programs. 
‘‘(15) Providing the non-Federal share of the 
cost of surface transportation capital projects that 
support public transportation and transit programs, 
including support for bike lanes and pathways, pe-
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destrian pathways, and bike share programs pro-
vided that not more than 10 percent of assistance 
distributed to each State and Indian Tribe pursuant 
to this section shall be used for such purposes. 
‘‘(16) Construction, expansion, and retooling of 
facilities that manufacture components for clean en-
ergy technology systems. 
‘‘(17) Installation, retrofit, or conversion of 
equipment to enable manufacturing facilities to man-
ufacture zero- or low-emission energy-intensive in-
dustrial products. 
‘‘(18) Any other program, including a State 
program, that reduces air pollution, deploys clean 
energy or energy efficient technologies, or enhances 
the resilience of infrastructure, as determined by the 
Administrator. 
‘‘(f) ADMINISTRATIVE COSTS.—Not more than 5 per-
cent of the proceeds distributed to States and Indian 
Tribes in any year may be used for the purposes of admin-
istrative expenses. 
‘‘(g) MAINTENANCE OF EFFORT.—A State or Indian 
Tribe’s use of proceeds distributed by this section shall 
include assurances that the State or Indian Tribe will 
maintain support for existing activities carried out by such 
State or Indian Tribe in future years at least at the levels 
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of such support that is the average of such State or Indian 
Tribe’s support for such programs in the 3 years pre-
ceding the date of enactment of this section. The Adminis-
trator may waive the requirement in this subsection for 
the purpose of relieving fiscal burdens on States and In-
dian Tribes that have experienced a precipitous decline in 
financial resources. 
‘‘(h) ASSISTANCE TO DISADVANTAGED AND RURAL 
COMMUNITIES.—Not less than 50 percent of funding dis-
tributed to each State and Indian Tribe shall be used to 
provide assistance to activities located within disadvan-
taged or rural communities, as determined by the Admin-
istrator. 
‘‘(i) REPORTING.—Each State and Indian Tribe shall 
submit to the Administrator a report every 2 years on the 
use of proceeds received under this section in accordance 
with such requirements as the Administrator may pre-
scribe. 
‘‘(j) ENFORCEMENT.—If the Administrator deter-
mines that a State or Indian Tribe is not in compliance 
with this section, the Administrator may withhold pro-
ceeds that are otherwise to be distributed to such State 
or Indian Tribe. Proceeds withheld pursuant to this sub-
section may be distributed among the remaining States 
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and Indian Tribes in accordance with the formula deter-
mined pursuant to subsection (d). 
‘‘SEC. 725. PROGRAM REVIEW. 
‘‘The Administrator shall— 
‘‘(1) in conjunction with the establishment of 
emission allowances under section 715(c)(2) for a 
compliance period, conduct a review of the imple-
mentation of this title; 
‘‘(2) in conducting each such review, seek public 
comment; and 
‘‘(3) upon completion of each such review, sub-
mit to Congress a report with the results of such re-
view, including recommendations, if any, for legisla-
tion or administrative actions appropriate to achieve 
the targets under section 711(a) and the reductions 
under section 711(b). 
‘‘SEC. 726. ADVISORY BOARD. 
‘‘(a) ESTABLISHMENT.—The Administrator shall es-
tablish an advisory board to provide independent advice 
and recommendations to the Environmental Protection 
Agency with respect to the administration of this title. 
‘‘(b) MEMBERSHIP.—The advisory board shall be 
composed of members representing— 
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‘‘(1) community-based organizations, including 
such organizations that carry out initiatives relating 
to environmental justice; 
‘‘(2) State governments; 
‘‘(3) Tribal Governments; 
‘‘(4) local governments; 
‘‘(5) labor organizations; 
‘‘(6) nongovernmental and environmental orga-
nizations; 
‘‘(7) agricultural organizations; 
‘‘(8) private sector organizations, including rep-
resentatives of industries and businesses required to 
comply with the requirements of this title; and 
‘‘(9) experts in the field of— 
‘‘(A) socioeconomic analysis; 
‘‘(B) health and environmental effects; 
‘‘(C) pollution monitoring and exposure 
evaluation; 
‘‘(D) environmental law and civil rights 
law; 
‘‘(E) environmental health science re-
search; or 
‘‘(F) agricultural science research. 
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‘‘(c) FACA.—Chapter 10 of title 5, United States 
Code (commonly known as the Federal Advisory Com-
mittee Act), shall apply to the advisory board. 
‘‘PART C—EMISSIONS REDUCTIONS IN EVERY 
COMMUNITY 
‘‘SEC. 731. DEFINITIONS. 
‘‘In this part: 
‘‘(a) CLEANER AIR COMMUNITY.—The term ‘Cleaner 
Air Community’ means a community designated as a 
Cleaner Air Community under section 733. 
‘‘(b) CLEANER AIR COMMUNITY FUND.—The term 
‘Cleaner Air Community Fund’ means the fund estab-
lished under section 104 of the Climate Pollution Stand-
ard and Community Investment Act of 2025. 
‘‘(c) COMMUNITY.—The term ‘community’ means a 
county, municipality, town, township, village, parish, bor-
ough, or other unit of general government below the State 
level. 
‘‘SEC. 732. USE OF FUNDS FROM THE CLEANER AIR COMMU-
NITY FUND. 
‘‘(a) IN GENERAL.— 
‘‘(1) ASSISTANCE.—Beginning in 2028 and 
each year thereafter, the Administrator shall provide 
assistance pursuant to this section using amounts 
made available in the Cleaner Air Community Fund. 
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‘‘(2) PRIORITY.—In providing assistance pursu-
ant to this section using amounts made available in 
the Cleaner Air Community Fund, the Adminis-
trator shall prioritize providing assistance to commu-
nities designated as a Cleaner Air Community under 
section 733. 
‘‘(b) ENVIRONMENTAL
AND
CLIMATE
JUSTICE 
BLOCK GRANTS.—The Administrator is authorized to use 
amounts made available in the Cleaner Air Community 
Fund to award grants and provide technical assistance 
under section 138. 
‘‘(c) ENHANCED AIR POLLUTION MONITORING.— 
‘‘(1) IN GENERAL.—The Administrator is au-
thorized to award grants using amounts made avail-
able in the Cleaner Air Community Fund to local 
and State governments, Indian Tribes, air pollution 
control agencies, and other public or nonprofit pri-
vate agencies, institutions, and organizations with 
appropriate technical capacity to support additional 
emissions monitoring in disadvantaged communities, 
as determined by the Administrator. 
‘‘(2) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an entity described in 
paragraph (1) shall submit an application to the Ad-
ministrator at such time, in such form, and con-
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taining such information and assurances as the Ad-
ministrator may require. 
‘‘(3) PRIORITIZATION OF USE OF FUNDS.—The 
Administrator shall prioritize awarding grants under 
this subsection to entities that propose, in an appli-
cation submitted under paragraph (2), to use grants 
to— 
‘‘(A) improve the reporting, monitoring, 
and enforcement of the requirements of this 
title; 
‘‘(B) improve air quality monitoring, in-
cluding by the use of hyperlocal air monitoring 
equipment and techniques, in locations deter-
mined by the Administrator to have insufficient 
monitoring equipment and capabilities; or 
‘‘(C) inform management decisions, such 
as the placement or relocation of stationary air 
pollution monitors, transportation or land use 
planning, investments in mitigating air pollu-
tion sources, and other planning decisions, by 
relevant local, State, and Tribal governments. 
‘‘(d) DEVELOPMENT
OF
EMISSIONS
REDUCTION 
PLANS.— 
‘‘(1) IN GENERAL.—The Administrator is au-
thorized to award grants and provide technical as-
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sistance using amounts made available in the Clean-
er Air Community Fund to local and State govern-
ments, Indian Tribes, air pollution control agencies, 
and other public or nonprofit private agencies, insti-
tutions, and organizations that are located in a 
Cleaner Air Community to develop multiyear plans 
to reduce air pollution in such community. 
‘‘(2) PLAN
CONTENTS.—A plan developed 
under paragraph (1) shall include— 
‘‘(A) a proposal to develop effective and 
practical processes, methods, and devices to re-
duce, prevent, or control air pollution, including 
greenhouse gas emissions, within a Cleaner Air 
Community; and 
‘‘(B) a description of the expected use of 
funds to develop such proposals. 
‘‘(3) COMMUNITY
ENGAGEMENT.—Any entity 
receiving a grant to develop a multi-year plan under 
paragraph (1) shall demonstrate sufficient commu-
nity engagement with local residents in the develop-
ment of a plan. 
‘‘(e) IMPLEMENTATION OF EMISSIONS REDUCTION 
PLANS.—The Administrator is authorized to award grants 
using amounts made available in the Cleaner Air Commu-
nity Fund to local and State governments, Indian Tribes, 
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air pollution control agencies, and other public or non-
profit private agencies, institutions, and organizations 
that received a grant and developed a plan under sub-
section (d)— 
‘‘(1) if the Administrator determines such enti-
ty demonstrated sufficient community engagement 
with local residents in the development of the plan; 
and 
‘‘(2) for purposes of implementing the plan. 
‘‘(f) COMMUNITY-BASED
HEALTH
SERVICES
IN 
CLEANER AIR COMMUNITIES.—The Administrator, in 
consultation with the Secretary of Health and Human 
Services, is authorized to award grants using amounts 
made available in the Cleaner Air Community Fund to 
local and State governments, Indian Tribes, air pollution 
control agencies, and other public or nonprofit private 
agencies, institutions, and organizations, which shall be 
used to— 
‘‘(1) support community-based health centers, 
health monitoring, and other health care services lo-
cated in a Cleaner Air Community; and 
‘‘(2) address the health impacts of individuals 
who reside or work in a Cleaner Air Community. 
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‘‘SEC. 733. CLEANER AIR COMMUNITIES. 
‘‘(a) DESIGNATION
OF
CLEANER
AIR
COMMU-
NITIES.—Beginning after compliance period 1, the Admin-
istrator shall designate, for a period of 5 years, commu-
nities as Cleaner Air Communities in accordance with this 
section. 
‘‘(b) ELIGIBILITY.—A community shall be eligible to 
be designated as a Cleaner Air Community under sub-
section (a) if the community, or a census tract within such 
community, experiences an increase of emissions of any 
greenhouse gas, hazardous air pollutant, or criteria air 
pollutant on an annual basis over the average annual 
quantity of emissions of the pollutant during the previous 
compliance period. 
‘‘(c) PETITION FOR DESIGNATION.—Any person may 
petition the Administrator to designate a community as 
a Cleaner Air Community under subsection (a). 
‘‘(d) CONSIDERATION OF PETITION.—The Adminis-
trator shall review a petition under subsection (c) and 
make a determination on such petition not later than 1 
year after receiving such petition. 
‘‘(e) REDESIGNATION
OF CLEANER AIR COMMU-
NITIES.—Not later than 4 years after a community is des-
ignated as a Cleaner Air Community, the Administrator 
shall determine whether to extend the designation of the 
community as a Cleaner Air Community for another 5- 
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year period beginning at the end of the last year during 
which that community experienced an increase of pollut-
ants as described in subsection (b). 
‘‘SEC. 734. ANNUAL REPORT TO CONGRESS. 
‘‘Beginning in 2028, not later than 180 days after 
the end of each year, the Administrator shall submit to 
Congress a report for the previous year, which shall in-
clude— 
‘‘(1) a description of each grant awarded and 
the technical assistance provided under this part or 
section 138 pursuant to this part; 
‘‘(2) the amount of funding that remains avail-
able in the Cleaner Air Community Fund; 
‘‘(3) an assessment of the air quality moni-
toring needs of disadvantaged communities, as deter-
mined by the Administrator, including a determina-
tion whether additional air quality monitoring is nec-
essary to determine the eligibility of communities to 
be designated as Cleaner Air Communities; and 
‘‘(4) an assessment of the air quality and public 
health of Cleaner Air Communities and efforts to re-
duce air pollution in such communities. 
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‘‘SEC. 735. REGULATIONS. 
‘‘The Administrator shall issue any regulations nec-
essary to implement this part not later than 36 months 
after the date of enactment of this part. 
‘‘PART D—NEGATIVE EMISSIONS ACTIVITIES 
‘‘SEC. 741. DEFINITIONS. 
‘‘In this part: 
‘‘(1) BEGINNING PRODUCER.—The term ‘begin-
ning producer’ means an individual that— 
‘‘(A)(i) has not operated a farm or ranch; 
or 
‘‘(ii) has operated a farm or ranch for not 
more than 10 years; and 
‘‘(B) meets such other criteria as the Ad-
ministrator, in consultation with the Secretary, 
may establish. 
‘‘(2) 
ELIGIBLE
CARBON
REMOVAL
TECH-
NOLOGY.— 
‘‘(A) IN GENERAL.—The term ‘eligible car-
bon removal technology’ means any equipment, 
technique, or technology, placed into service 
after January 1, 2025, that— 
‘‘(i) captures carbon dioxide directly 
from ambient air or seawater, as deter-
mined appropriate by the Administrator; 
and 
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‘‘(ii) permanently stores such cap-
tured carbon dioxide— 
‘‘(I) in a subsurface geologic for-
mation or in materials, including 
building materials and mineralized 
carbon materials; or 
‘‘(II) using other permanent stor-
age methods, as determined by the 
Administrator. 
‘‘(B) EXCLUSION.—The term ‘eligible car-
bon removal technology’ does not include any 
equipment, technique, or technology that— 
‘‘(i) captures carbon dioxide which is 
deliberately released from naturally occur-
ring subsurface springs; or 
‘‘(ii) stores or uses carbon dioxide for 
enhanced oil recovery. 
‘‘(3) ELIGIBLE LAND.— 
‘‘(A) IN
GENERAL.—The term ‘eligible 
land’ means land on which agricultural com-
modities, livestock, or forest-related products 
are produced. 
‘‘(B) INCLUSIONS.—The term ‘eligible 
land’ includes the following: 
‘‘(i) Cropland. 
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‘‘(ii) Grassland. 
‘‘(iii) Rangeland. 
‘‘(iv) Pasture land. 
‘‘(v) Nonindustrial private forest land. 
‘‘(vi) Other agricultural land (includ-
ing cropped woodland, marshes, environ-
mentally sensitive areas, and agricultural 
land used for the production of livestock) 
on which identified or expected resource 
concerns related to agricultural production 
could be addressed through a contract 
under the Program as determined by the 
Administrator, in consultation with the 
Secretary. 
‘‘(4) ELIGIBLE PRACTICE.—The term ‘eligible 
practice’ means an activity included on the list es-
tablished under section 744(a). 
‘‘(5) 
HIGH-QUALITY
PROJECT.—The 
term 
‘high-quality project’ means carrying out one or 
more eligible practices, which result in (as deter-
mined by the Administrator) verifiable, permanent, 
and additional reductions or avoidance of greenhouse 
gas emissions or sequestration of greenhouse gases. 
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‘‘(6) PAYMENT.—The term ‘payment’ means fi-
nancial assistance provided to a producer for per-
forming one or more practices under this part. 
‘‘(7) PRODUCER.—The term ‘producer’ means 
an individual or entity capable of carrying out an eli-
gible practice. 
‘‘(8) PROGRAM.—The term ‘Program’ means 
the program established under section 743. 
‘‘(9) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Department of Agriculture. 
‘‘(10) SOCIALLY DISADVANTAGED PRODUCER.— 
The term ‘socially disadvantaged producer’ means a 
farmer or rancher who is a member of a group 
whose members have been subjected to racial or eth-
nic prejudice because of their identity as members of 
the group without regard to their individual quali-
ties. 
‘‘SEC. 742. PURPOSES. 
‘‘The purposes of the Program are to incentivize ac-
tivities that result in reduction or avoidance of greenhouse 
gas emissions, or sequestration of greenhouse gases, and 
to optimize environmental benefits, by— 
‘‘(1) utilizing methodologies, in consultation 
with the Secretary for agricultural production and 
forest management practices on eligible land, for 
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each eligible practice type for quantifying and 
verifying potential and actual reduction and avoid-
ance of greenhouse emissions and sequestration of 
greenhouse gases; 
‘‘(2) avoiding, to the maximum extent prac-
ticable, the need for regulatory programs by assist-
ing producers implementing eligible practices on eli-
gible land in reducing or avoiding greenhouse gas 
emissions, or sequestering of greenhouse gases in 
order to achieve economy-wide greenhouse gas emis-
sions reduction targets pursuant to section 702; 
‘‘(3) avoiding or minimizing, to the maximum 
extent practicable, adverse effects on human health 
or the environment resulting from the implementa-
tion of practices under the Program; 
‘‘(4) assisting producers implementing eligible 
practices on eligible land with adaptation to chang-
ing climatic conditions and mitigating against in-
creasing weather volatility and drought; and 
‘‘(5) enabling the participation of beginning 
producers and socially disadvantaged producers in 
the Program. 
‘‘SEC. 743. ESTABLISHMENT. 
‘‘(a) IN GENERAL.—The Administrator, in consulta-
tion with the Secretary with respect to agricultural pro-
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duction and forest management practices on eligible land, 
shall establish a program to enter into contracts with pro-
ducers to carry out practices using amounts made avail-
able in the Negative Emissions Activities Fund. 
‘‘(b) REGULATIONS.—Not later than 2 years after 
the date of enactment of this part, the Administrator shall 
promulgate regulations to carry out this part. 
‘‘SEC. 744. ELIGIBLE PRACTICES. 
‘‘(a) LIST OF ELIGIBLE PRACTICES.—— 
‘‘(1) LISTING.—The Administrator, in consulta-
tion with the Secretary with respect to agricultural 
production and forest management activities on eli-
gible land, shall establish, and may periodically re-
vise, a list of activities that are eligible practices. 
‘‘(2) REQUIREMENTS.—The Administrator may 
include an activity as an eligible practice on the list 
established under paragraph (1) if the Adminis-
trator, in consultation with the Secretary with re-
spect to agricultural production and forest manage-
ment practices on eligible land, determines the activ-
ity can reduce or avoid greenhouse gas emissions or 
sequester greenhouse gases, consistent with the pur-
poses described in section 742. 
‘‘(3) MODIFICATIONS TO LIST.—The Adminis-
trator may at any time, by rule, add or remove an 
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activity to or from the list of eligible practices in ac-
cordance with paragraph (2). 
‘‘(b) ESTABLISHMENT OF INITIAL LIST.—In estab-
lishing the initial list under subsection (a), the Adminis-
trator, in consultation with the Secretary with respect to 
agricultural production and forest management practices 
on eligible land, shall give priority to consideration of ac-
tivities for which there are well developed methodologies 
for quantifying the reduction or avoidance of greenhouse 
gas emissions or sequestration of greenhouse gases with 
such modifications as the Administrator considers appro-
priate. At a minimum, the initial list prepared under this 
section shall include the following activities that reduce or 
avoid greenhouse gas emissions or sequester greenhouse 
gases: 
‘‘(1) Agricultural, grassland, and rangeland se-
questration and management activities on eligible 
land. 
‘‘(2) Changes in carbon stocks attributed to 
land use change and forestry activities on eligible 
land. 
‘‘(3) Manure management and disposal on eligi-
ble land. 
‘‘(4) Livestock management on eligible land. 
‘‘(5) Eligible carbon removal technologies. 
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‘‘(c) METHODOLOGIES.— 
‘‘(1) ESTABLISHMENT.—The Administrator, in 
consultation with the Secretary with respect to agri-
cultural production and forest management practices 
on eligible land, shall establish for each type of eligi-
ble practice a standardized methodology for deter-
mining the quantity of reduction or avoidance of 
greenhouse gas emissions, or sequestration of green-
house gases, expected to be achieved by the type of 
eligible practice, including protocols for monitoring, 
reporting, and verifying performance, and account-
ing for uncertainty. 
‘‘(2) PREEXISTING
METHODOLOGIES.—In es-
tablishing a standard methodology for each type of 
eligible practice under paragraph (1), the Adminis-
trator shall consider basing such standard method-
ology on methodologies that exist as of the date of 
enactment of this part. 
‘‘SEC. 745. APPLICATIONS. 
‘‘(a) IN GENERAL.—The Administrator may enter 
into a contract with a producer under section 746 if— 
‘‘(1) the producer submits to the Administrator 
an application that proposes to carry out one or 
more eligible practices; and 
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‘‘(2) the Administrator approves such applica-
tion under this section. 
‘‘(b) EVALUATION CRITERIA.—The Administrator 
shall develop criteria for evaluating applications submitted 
under subsection (a), which shall include consideration of 
the potential quantity and cost effectiveness of reduction 
or avoidance of greenhouse gas emissions, or sequestration 
of greenhouse gases, from the proposed eligible practices. 
‘‘(c) PRIORITIZATION OF APPLICATIONS.—In evalu-
ating applications submitted under subsection (a), the Ad-
ministrator shall prioritize approving applications based 
on— 
‘‘(1) the anticipated quantity of reduction or 
avoidance of greenhouse gas emissions, or sequestra-
tion of greenhouse gases from the proposed eligible 
practices; 
‘‘(2) the cost to carry out the proposed eligible 
practices relative to other, similar eligible practices; 
‘‘(3) how effectively and comprehensively the 
proposed eligible practices are expected to achieve 
the reduction or avoidance of greenhouse gas emis-
sions, or sequestration of greenhouse gases on eligi-
ble land; 
‘‘(4) the inclusion of high-quality projects; and 
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‘‘(5) how well the proposed eligible practices 
fulfill the purposes of the Program. 
‘‘(d) GROUPING OF APPLICATIONS.—To the greatest 
extent practicable, the Administrator shall evaluate appli-
cations that propose to carry out the same or similar eligi-
ble practices together. 
‘‘(e) GEOGRAPHIC SCOPE.—The Administrator shall, 
to the extent practicable, seek to approve applications 
from a diversity of geographic regions of the United 
States, taking into account factors such as soil type, crop-
ping history, and water availability. 
‘‘(f) SET ASIDE FOR USE OF ELIGIBLE CARBON RE-
MOVAL TECHNOLOGY.—The Administrator shall ensure 
that, each year, not less than 20 percent of the amount 
provided under contracts entered into under section 746 
be provided to carry out eligible practices that use eligible 
carbon removal technology. 
‘‘(g) REVERSE AUCTION.— 
‘‘(1) IN GENERAL.—The Administrator may ap-
prove applications submitted under subsection (a) 
using a reverse auction mechanism to promote the 
most cost effective means of achieving the antici-
pated reduction or avoidance of greenhouse gas 
emissions, or sequestration of greenhouse gases, pur-
suant to contracts entered into under section 746. 
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‘‘(2) MULTIFACTOR BIDDING.—When using a 
reverse auction mechanism under paragraph (1), the 
Administrator may incorporate noncost factors into 
the auction system, and prioritize approving applica-
tions that propose to carry out eligible practices 
that— 
‘‘(A) maximize the net greenhouse gas 
emissions reductions; 
‘‘(B) minimize the amount of greenhouse 
gas emissions released by carrying out the eligi-
ble practices; 
‘‘(C) would increase the diversity of types 
of eligible practices carried out pursuant to sec-
tion 746; 
‘‘(D) would be carried out in geographi-
cally diverse areas; 
‘‘(E) support economic development or job 
creation in disadvantaged or rural communities, 
as determined by the Administrator; 
‘‘(F) include robust public engagement and 
community benefits commitments; 
‘‘(G) provide benefits to beginning pro-
ducers and socially disadvantaged producers; 
and 
‘‘(H) include high-quality projects. 
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‘‘(h) THIRD-PARTY AGGREGATORS.—The Adminis-
trator may, when evaluating applications under this sec-
tion, approve applications from entities that aggregate eli-
gible practices from multiple producers. 
‘‘SEC. 746. CONTRACTS AND PAYMENTS. 
‘‘(a) CONTRACTS.—After approving an application 
under section 745, the Administrator shall seek to enter 
into a contract with the producer that submitted the appli-
cation. 
‘‘(b) REQUIRED PROVISIONS.—A contract entered 
into under subsection (a) shall— 
‘‘(1) require the producer to develop and imple-
ment a program plan which— 
‘‘(A) shall be approved by the Adminis-
trator, and may include such conditions the Ad-
ministrator may require; and 
‘‘(B) shall provide for how the producer 
will— 
‘‘(i) carry out the eligible practices 
proposed in the application; 
‘‘(ii) manage, maintain, and improve 
such eligible practices for the duration of 
the contract; 
‘‘(iii) provide for the verification of 
the actual quantity of greenhouse gas 
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emissions reduced or avoided, or green-
house gases sequestered, from such eligible 
practices 
in 
accordance 
with 
section 
747(b); and 
‘‘(iv) adequately mitigate environ-
mental impacts (including impacts on bio-
diversity, land use, and water quality) with 
carrying out such eligible practices; 
‘‘(2) require the producer to maintain and sup-
ply information required by the Administrator to de-
termine compliance with, and the effectiveness of, 
the program plan; 
‘‘(3) if the producer transfers the rights, title, 
and interests in eligible land subject to the contract 
(unless the transferee enters into an agreement with 
the Administrator to assume all obligations of the 
contract), require the producer to refund all pay-
ments received under the Program, as determined by 
the Administrator; 
‘‘(4) prohibit the producer from using payments 
made under subsection (e) to conduct any activities 
that would undermine the purposes of the Program; 
‘‘(5) include a provision that a producer may 
not be considered in violation of the contract for fail-
ure to comply with the contract due to cir-
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cumstances beyond the control of the producer, in-
cluding a disaster or other similar condition, as de-
termined by the Administrator; 
‘‘(6) provide for annual payments to the pro-
ducer in accordance with subsection (e); and 
‘‘(7) include any additional provisions the Ad-
ministrator determines are necessary to carry out 
the Program. 
‘‘(c) RENEWAL.—If the Administrator determines 
that further implementation of a producer’s program plan 
would continue to result in cost-effective reduction or 
avoidance of greenhouse gas emissions, or sequestration 
of greenhouse gases, the Administrator may seek to renew 
the existing contract in the last year of the contract term 
if the producer— 
‘‘(1) demonstrates compliance with the provi-
sions of the existing contract; and 
‘‘(2) agrees to adopt and continue to integrate 
new or improved eligible practices, as determined by 
the Administrator. 
‘‘(d) TERM OF CONTRACTS.— 
‘‘(1) IN GENERAL.—A contract entered into or 
renewed under this section shall be for a term of— 
‘‘(A) not less than 5 years; and 
‘‘(B) not more than 20 years. 
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‘‘(2) FACTORS
FOR
DETERMINING
CONTRACT 
DURATION.—The Administrator shall determine the 
term of a contract entered into or renewed under 
this section based on— 
‘‘(A) the eligible practices included in the 
producer’s program plan; 
‘‘(B) the opportunities for greenhouse gas 
emission reduction or avoidance, or sequestra-
tion of greenhouse gases, from such eligible 
practices; and 
‘‘(C) other factors determined appropriate 
by the Administrator. 
‘‘(e) ANNUAL PAYMENTS.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
provide annual payments to a producer with which 
the Administrator enters into or renews a contract 
under this section using amounts made available in 
the Negative Emissions Activities Fund. 
‘‘(2) AMOUNT.— 
‘‘(A) PRIMARY CONSIDERATION.—The Ad-
ministrator shall determine the amount of an 
annual payment under paragraph (1) based 
on— 
‘‘(i) the expected quantity of green-
house gas emission reduction or avoidance, 
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or sequestration of greenhouse gases, re-
sulting from the eligible practices included 
in the program plan; 
‘‘(ii) the amount and scale of high- 
quality projects included in the program 
plan; and 
‘‘(iii) if applicable, the results of a re-
verse auction carried out pursuant to sec-
tion 745(g). 
‘‘(B) ADDITIONAL
CONSIDERATIONS.—In 
determining the amount of an annual payment 
under this paragraph, the Administrator may 
also consider— 
‘‘(i) costs incurred by the producer as-
sociated with developing and implementing 
the program plan, including costs associ-
ated with plans, designs, materials, equip-
ment, and labor; 
‘‘(ii) income forgone by the producer 
from eligible land; and 
‘‘(iii) the extent to which compensa-
tion would ensure long-term continued 
maintenance, management, and improve-
ment of one or more practices included in 
the program plan. 
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101 
‘‘(C) ADDITIONAL PAYMENTS FOR MAINTE-
NANCE OF PROGRAM PLANS.—If the Adminis-
trator and a producer agree to renew a contract 
pursuant to subsection (c), the Administrator 
may provide the producer a separate payment 
for purposes of maintaining the previously im-
plemented program plan. Notwithstanding sub-
paragraph (A), such separate payment may be 
based on actual measured and verified green-
house gas emission reduction or avoidance, or 
sequestration of greenhouse gases. 
‘‘(3) ADVANCE PAYMENTS.— 
‘‘(A) IN
GENERAL.—The Administrator 
may, if requested by a producer, provide a por-
tion of an annual payment in advance for costs 
related to purchasing materials, equipment, or 
contracting in order to implement one or more 
eligible practices included in the producer’s pro-
gram plan. 
‘‘(B) RETURN OF FUNDS.—If a payment 
provided in advance under subparagraph (A) is 
not expended during the 90-day period begin-
ning on the date of receipt of the payment, the 
remaining amounts of such payment shall be re-
turned to the Negative Emissions Activities 
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Fund within a reasonable timeframe, as deter-
mined by the Administrator. 
‘‘(C) NOTIFICATION
AND
DOCUMENTA-
TION.—The Administrator shall— 
‘‘(i) notify each producer at the time 
of enrollment in the Program of the option 
to receive advance payments; and 
‘‘(ii) document each request to receive 
advance payments. 
‘‘(4) FINANCIAL
ASSISTANCE
FROM
OTHER 
SOURCES.— 
‘‘(A) IN
GENERAL.—Any payments re-
ceived by a producer from a State, private orga-
nization, or person for the implementation of 
one or more eligible practices on eligible land 
shall be in addition to the payments provided to 
the producer pursuant to this subsection. 
‘‘(B) PROHIBITION
ON
DOUBLE
COUNT-
ING.—The Administrator may require, as a 
condition of the contract, that a producer who 
receives payments for implementing eligible 
practices under this section may not also use 
such eligible practices as a compliance mecha-
nism for another greenhouse gas emissions 
management program, including any foreign, 
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Federal, State, local, or voluntary private 
greenhouse gas emissions management pro-
gram, if such use would undermine the goal es-
tablished by section 702. 
‘‘(5) LIMITATION OF PAYMENTS.—The Admin-
istrator may not make payments under this section 
in excess of the amounts made available in the Neg-
ative Emissions Activities Fund. If the aggregate of 
such payments in any calendar year will exceed such 
amount, the Administrator shall reduce the amount 
of payments to the extent necessary to comply with 
the requirement in the first sentence. 
‘‘(f) MODIFICATION
OR
TERMINATION
OF
CON-
TRACTS.— 
‘‘(1) VOLUNTARY
MODIFICATION
OR
TERMI-
NATION.—The Administrator may modify or termi-
nate a contract entered into or renewed with a pro-
ducer under this section if— 
‘‘(A) the producer agrees to the modifica-
tion or termination; and 
‘‘(B) the Administrator determines that 
the modification or termination is in the public 
interest. 
‘‘(2) INVOLUNTARY
TERMINATION.—The Ad-
ministrator may terminate a contract under the pro-
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gram if the Administrator determines that the pro-
ducer violated the contract. 
‘‘(3) REPAYMENT.—If a contract is terminated, 
the Administrator may— 
‘‘(A) allow the producer to retain payments 
already received under the contract; or 
‘‘(B) require repayment, in whole or in 
part, of payments received. 
‘‘(g) ENFORCEMENT OF TERMS AND CONDITIONS.— 
‘‘(1) 
TERMINATION.—Notwithstanding 
sub-
section (f), if the Administrator determines that a 
producer violated a term or condition of a contract 
entered into or renewed under this section, and such 
violation warrants termination of the contract (as 
determined by the Administrator), the producer— 
‘‘(A) may not receive payments under the 
contract; and 
‘‘(B) shall refund to the Administrator all 
or a portion of the payments received by the 
owner or operator under the contract, including 
any interest on the payments, as determined by 
the Administrator. 
‘‘(2) 
OTHER
PENALTIES.—Notwithstanding 
subsection (f), if the Administrator determines that 
a producer violated a term or condition of a contract 
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entered into or renewed under this section, but such 
violation does not warrant termination of the con-
tract, the producer shall refund to the Adminis-
trator, or accept adjustments to, the payments pro-
vided to the owner or operator, as the Administrator 
determines to be appropriate. 
‘‘SEC. 747. DUTIES OF THE ADMINISTRATOR. 
‘‘(a) TECHNICAL ASSISTANCE.— 
‘‘(1) IN GENERAL.—To the extent appropriate, 
the Administrator, in consultation with the Sec-
retary with respect to agricultural production and 
forest management practices on eligible land, shall 
assist producers with implementing program plans 
by providing to producers technical assistance, edu-
cation, and outreach, including with respect to infor-
mation and training to aid in the design, installa-
tion, and implementation of program plans. 
‘‘(2) PRIORITIZED PRODUCERS.—The Adminis-
trator shall prioritize providing technical assistance, 
education, and outreach under paragraph (1) to be-
ginning producers and socially disadvantaged pro-
ducers. 
‘‘(b) VERIFICATION OF PROGRAM PLANS.—The Ad-
ministrator shall establish requirements for how producers 
may verify the actual quantity of greenhouse gas emissions 
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reduced or avoided, or greenhouse gases sequestered, from 
eligible practices under section 746(b)(1)(B). The pro-
ducer shall submit to the Administrator a report prepared 
by a third-party verifier accredited pursuant to paragraph 
(2) that provides such information as the Administrator 
requires to verify such quantities. 
‘‘(1) SCHEDULE.—The Administrator shall pre-
scribe a schedule for the submission of reports under 
this subsection, which shall occur not less than once 
during the term of each contract. 
‘‘(2) VERIFIER ACCREDITATION.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall establish a process and requirements for 
periodic accreditation of third-party verifiers to 
ensure that such verifiers are professionally 
qualified and have no conflicts of interest. 
‘‘(B) 
FEDERAL
ACCREDITATION.—The 
process and requirements established under 
subparagraph (A) may include— 
‘‘(i) accreditation standards for third- 
party verifiers; and 
‘‘(ii) training and testing require-
ments for third-party verifiers. 
‘‘(C) PUBLIC ACCESSIBILITY.—Each third- 
party verifier meeting the requirements for ac-
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creditation established pursuant to subpara-
graph (A) shall be listed in a publicly accessible 
database, which shall be maintained and up-
dated by the Administrator. 
‘‘(c) AUDITS.—The Administrator shall conduct, on 
an annual basis, random audits of eligible activities car-
ried out by producers under program plans and the activi-
ties of third-party verifiers. At a minimum, the Adminis-
trator shall conduct audits each year of a representative 
sample of eligible activities and geographical areas. Noth-
ing in this subsection prevents the Administrator from 
conducting any other audit the Administrator considers to 
be necessary. 
‘‘(d) ASSESSMENT
OF
QUANTIFICATION
METH-
ODOLOGIES.—The Administrator shall regularly assess 
the verification requirements established under subsection 
(b) and develop new requirements for verification as need-
ed in order to effectively carry out this part. 
‘‘(e) COORDINATION WITH OTHER FEDERAL AGEN-
CIES.—In carrying out this part, the Administrator shall 
coordinate activities of the Environmental Protection 
Agency with the Department of Agriculture and other rel-
evant Federal agencies implementing conservation pro-
grams to align protocols, decrease administrative burdens, 
and increase enrollment in beneficial climate practices. 
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‘‘SEC. 748. REPORTING AND DATABASE. 
‘‘(a) REPORT REQUIRED.—Not later than January 1, 
2030, and every 2 years thereafter, the Administrator 
shall submit to Congress a report on the status of eligible 
practices funded under this part, including— 
‘‘(1) the amount of payments awarded; 
‘‘(2) results of the eligible practices associated 
with such payments, including estimates of the 
quantity of reduction or avoidance of greenhouse gas 
emissions, or increases in sequestration of green-
house gases; and 
‘‘(3) recommendations to improve the effective-
ness of such eligible practices. 
‘‘(b) PRACTICE DATABASE.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
use the data reported under subsection (a) to estab-
lish and maintain a publicly available database that 
provides— 
‘‘(A) a compilation and analysis of eligible 
practices being carried out under program 
plans; and 
‘‘(B) a list of recommended eligible prac-
tices. 
‘‘(2) PRIVACY.—Information provided under 
paragraph (1) shall be transformed into a statistical 
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or aggregate form so as to not include any identifi-
able or personal information of individual producers. 
‘‘SEC. 749. PROGRAM REVIEW AND REVISION. 
‘‘At least once every 5 years, the Administrator, in 
consultation with the Secretary with respect to agricul-
tural production and forest management practices on eligi-
ble land, shall review and, as appropriate, update and re-
vise— 
‘‘(1) the list of eligible practices established 
under section 744(a); 
‘‘(2) the methodologies established under sec-
tion 744(c); 
‘‘(3) the criteria to evaluate applications under 
section 745; 
‘‘(4) the Program, as necessary, to increase 
participation by beginning producers and socially 
disadvantaged producers; and 
‘‘(5) any other requirements established under 
this part to ensure the effectiveness of achieving the 
purposes in section 742, including by incorporating 
new data and evidence about actual emissions out-
comes of practices to improve model certainty and 
the accuracy of emission reduction estimates. 
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110 
‘‘PART E—INTERNATIONAL RESERVE 
ALLOWANCE PROGRAM 
‘‘SEC. 751. DEFINITIONS. 
‘‘In this part: 
‘‘(1) COVERED
ARTICLE.—The term ‘covered 
article’ means any good which— 
‘‘(A) is imported into the United States; 
and 
‘‘(B) contains greater than 100 pounds of 
any combination of any covered primary good. 
‘‘(2) COVERED
IMPORTED
GOOD.—The term 
‘covered imported good’ means— 
‘‘(A) a covered primary good; or 
‘‘(B) a covered article. 
‘‘(3) COVERED PRIMARY GOOD.—The term ‘cov-
ered primary good’ means any good which— 
‘‘(A) is imported into the United States; 
and 
‘‘(B) is produced by an eligible industrial 
sector listed pursuant to section 723. 
‘‘SEC. 752. INTERNATIONAL RESERVE ALLOWANCE PRO-
GRAM. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN
GENERAL.—The Administrator, with 
the concurrence of the Commissioner responsible for 
U.S. Customs and Border Protection and in con-
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sultation with additional Federal agencies as deter-
mined appropriate by the Administrator, shall issue 
regulations— 
‘‘(A) establishing an international reserve 
allowance program for the sale, exchange, pur-
chase, transfer, and banking of international re-
serve allowances for covered imported goods; 
‘‘(B) ensuring that the price for pur-
chasing an international reserve allowance is 
equivalent to the average of the previous four 
auction clearing prices for emission allowances 
under section 720; 
‘‘(C) establishing a general methodology 
for calculating the quantity of international re-
serve allowances that an importer of a covered 
imported good must submit; 
‘‘(D) requiring the submission of an appro-
priate amount of international reserve allow-
ances for covered imported goods entering the 
customs territory of the United States; 
‘‘(E) exempting from the requirements of 
subparagraph (D) covered imported goods that 
are— 
‘‘(i) determined, by independent third- 
party verification, to meet the relevant out-
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put-based allocation benchmark under sec-
tion 723(b); 
‘‘(ii) produced in any foreign country 
that the United Nations has identified as 
among the least developed of developing 
countries; or 
‘‘(iii) produced in any foreign country 
that the Administrator has determined to 
be responsible for less than 0.5 percent of 
total global greenhouse gas emissions and 
less than 5 percent of United States im-
ports of covered imported goods with re-
spect to the relevant eligible industrial sec-
tor; 
‘‘(F) specifying the procedures that U.S. 
Customs and Border Protection will apply for 
the declaration and entry of covered imported 
goods into the customs territory of the United 
States; 
‘‘(G) establishing procedures that prevent 
circumvention of the international reserve allow-
ance program requirements for covered im-
ported goods that are manufactured or proc-
essed in more than one foreign country; and 
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‘‘(H) publishing, on an annual basis, rel-
evant information regarding the quantity of 
international reserve allowances sold, the quan-
tity of covered imported goods entering the cus-
toms territory of the United States, relevant 
greenhouse gas emissions information of such 
goods, the country of origin of such goods, and 
other information as determined relevant by the 
Administrator. 
‘‘(2) PURPOSE
OF
PROGRAM.—The Adminis-
trator shall establish the program under paragraph 
(1) consistent with international agreements to 
which the United States is a party, in a manner that 
minimizes the likelihood of carbon leakage as a re-
sult of differences between— 
‘‘(A) the direct and indirect costs of com-
plying with part B of this title; and 
‘‘(B) the direct and indirect costs, if any, 
of complying in other countries with greenhouse 
gas regulatory programs, requirements, export 
tariffs, or other measures adopted or imposed 
to reduce greenhouse gas emissions. 
‘‘(b) GREENHOUSE GAS EMISSIONS DATA FOR COV-
ERED IMPORTED GOODS.— 
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‘‘(1) IN GENERAL.—Under the regulations es-
tablished under subsection (a), the Administrator 
shall require independent, third-party verification of 
greenhouse gas emissions data, including attrib-
utable greenhouse gas emissions, for all relevant 
stages of production of each covered imported good 
entering the customs territory of the United States. 
‘‘(2) FAILURE TO PRODUCE VERIFIED GREEN-
HOUSE GAS EMISSIONS DATA.—If the Administrator 
determines that an importer of a covered imported 
good has failed to provide accurate, sufficient, and 
independent, third-party verified data, the Adminis-
trator shall make a determination of the greenhouse 
gas emissions associated with the production of such 
good based on the best available data related to the 
greenhouse gas emissions and production data from 
all facilities which produce similar goods within the 
country of origin, the greenhouse gas emissions in-
tensity of the general economy of the country of ori-
gin of such good, and other factors determined rel-
evant by the Administrator. 
‘‘(c) DISPOSITION OF PROCEEDS.— 
‘‘(1) CLEAN ENERGY REBATE PROGRAM SUP-
PLEMENTAL FUNDING.—50 percent of the proceeds 
from the sale of international reserve allowances 
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under this section in each fiscal year shall be made 
available to the Secretary of the Treasury to carry 
out the Clean Energy Rebate Program established 
by section 102 of the Climate Pollution Standard 
and Community Investment Act of 2025. 
‘‘(2) ADMINISTRATIVE
EXPENSES.—The Ad-
ministrator may use, including the transfer of funds 
to the Commissioner responsible for U.S. Customs 
and Border Protection, not more than 10 percent of 
the proceeds from the sale of international reserve 
allowances under this section in each fiscal year to 
cover the administrative expenses associated with 
administering this section. 
‘‘(3) REMAINING
REVENUES.—The Adminis-
trator shall deposit any remaining proceeds from the 
sale of international reserve allowances under this 
section in a fiscal year in equal shares to the funds 
established by sections 103, 104, 105, and 106 of 
the Climate Pollution Standard and Community In-
vestment Act of 2025. 
‘‘(d) EFFECTIVE DATE.—The international reserve 
allowance program shall not apply to imports of covered 
imported goods entering the customs territory of the 
United States before January 1, 2028. 
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‘‘(e) COVERED ENTITIES.—International reserve al-
lowances shall not be used by covered entities to comply 
with part B of this title.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) FEDERAL ENFORCEMENT.—Section 113 of 
the Clean Air Act (42 U.S.C. 7413) is amended— 
(A) in subsection (a)(3), by striking ‘‘or 
title VI,’’ and inserting ‘‘title VI, or title VII’’; 
(B) in subsection (b)(2), by striking ‘‘or 
title VI’’ and inserting ‘‘title VI, or title VII’’; 
(C) in subsection (c)— 
(i) in the first sentence of paragraph 
(1), by striking ‘‘or title VI (relating to 
stratospheric ozone control),’’ and insert-
ing ‘‘title VI, or title VII,’’; and 
(ii) in the first sentence of paragraph 
(3), by striking ‘‘or VI’’ and inserting ‘‘VI, 
or VII’’; 
(D) in subsection (d)(1)(B), by striking 
‘‘or VI’’ and inserting ‘‘VI, or VII’’; and 
(E) in subsection (f), in the first sentence, 
by striking ‘‘or VI’’ and inserting ‘‘VI, or VII’’. 
(2) INSPECTIONS, MONITORING, AND ENTRY.— 
Section 114(a) of the Clean Air Act (42 U.S.C. 
7414(a)) is amended by striking ‘‘section 112, (ii)’’ 
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and inserting ‘‘section 112, or any regulation of 
greenhouse gas emissions under title VII, (ii)’’. 
(3) ENFORCEMENT.—Section 304(f) of the 
Clean Air Act (42 U.S.C. 7604(f)) is amended— 
(A) in paragraph (2), by striking ‘‘or’’ at 
the end; 
(B) in paragraph (3), by striking ‘‘; or’’ at 
the end and inserting a comma; 
(C) in paragraph (4), by striking the pe-
riod at the end and inserting ‘‘, or’’; and 
(D) by inserting the following new para-
graph after paragraph (4): 
‘‘(5) any requirement of title VII,’’. 
(4) ADMINISTRATIVE PROCEEDINGS AND JUDI-
CIAL REVIEW.—Section 307 of the Clean Air Act 
(42 U.S.C. 7607) is amended— 
(A) in subsection (a), by striking ‘‘, or sec-
tion 306’’ and inserting ‘‘section 306, or title 
VII’’; 
(B) in subsection (b)(1), by striking ‘‘sec-
tion 120,’’ in the first sentence and inserting 
‘‘section 120, any final action under title VII,’’; 
and 
(C) in subsection (d)(1)— 
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118 
(i) in subparagraph (T), by striking ‘‘, 
and’’ at the end and inserting a comma; 
(ii) by redesignating subparagraph 
(U) as subparagraph (V); and 
(iii) by inserting the following new 
subparagraph after subparagraph (T): 
‘‘(U) the promulgation or revision of any regu-
lation under title VII, and’’. 
(5) ENERGY
INDEPENDENCE
AND
SECURITY 
ACT OF 2007.—Section 548(b) of the Energy Inde-
pendence and Security Act of 2007 (42 U.S.C. 
17158(b)) is amended— 
(A) in paragraph (1), by striking the ‘‘or’’ 
at the end; 
(B) in paragraph (2), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(3) section 722(e) of the Clean Air Act.’’. 
SEC. 102. CLEAN ENERGY REBATE PROGRAM. 
(a) IN GENERAL.—The Secretary, in consultation 
with the Secretary of Agriculture and the Secretary of 
Health and Human Services, shall carry out a program 
to be known as the Clean Energy Rebate Program to pro-
vide rebates to eligible households using amounts made 
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available to the Secretary under sections 722(c) and 752 
of the Clean Air Act. 
(b) STREAMLINED PARTICIPATION
FOR CERTAIN 
BENEFICIARIES.—The Secretary shall— 
(1) periodically estimate the number of eligible 
households, and the number of participating eligible 
households, for the Clean Energy Rebate Program; 
and 
(2) develop procedures, in consultation with the 
Commissioner of Social Security, the Railroad Re-
tirement Board, the Secretary of Veterans Affairs, 
and relevant State agencies, to ensure that bene-
ficiaries of the benefit programs administered by 
such entities receive the rebate for which such bene-
ficiaries are eligible under the Clean Energy Rebate 
Program. 
(c) REBATE AMOUNT.—The rebate amount for an eli-
gible household under this section shall be determined by 
the Secretary, accounting for— 
(1) the amount of funding made available under 
section 722(c) of the Clean Air Act; and 
(2) the number of citizens and permanent legal 
residents of the eligible household. 
(d) DELIVERY MECHANISM.—The Secretary shall es-
tablish rules for providing rebates to eligible households 
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under this section in an administratively simple manner, 
and on a quarterly basis through— 
(1) direct deposit into the eligible household’s 
designated bank account; 
(2) a State’s electronic benefit transfer system; 
or 
(3) another Federal or State mechanism, if 
such a mechanism is approved by the Secretary. 
(e) ADMINISTRATION BY STATES.— 
(1) IN GENERAL.—The Secretary may, in con-
sultation with the Secretary of Agriculture and the 
Secretary of Health and Human Services, establish 
uniform national program standards to enable 
States, upon the approval of the Secretary, to ad-
minister the Clean Energy Rebate Program in the 
State. Such a State shall establish procedures gov-
erning the administration of the Clean Energy Re-
bate Program that the relevant State agency deter-
mines best serve eligible households in the State, in-
cluding households with special needs, such as 
households with elderly or disabled members, house-
holds in rural areas, homeless individuals, and 
households residing on reservations as defined in the 
Indian Child Welfare Act of 1978 and the Indian Fi-
nancing Act of 1974. 
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(2) COADMINISTRATION
WITH
OTHER
PRO-
GRAMS.—Such a State may coadminister the Clean 
Energy Rebate Program with other State programs, 
such as the supplemental nutrition assistance pro-
gram authorized by the Food and Nutrition Act of 
2008 in accordance with the provisions of this title. 
(3) ADDITIONAL
REQUIREMENTS.—No State 
shall impose any condition of eligibility for a rebate 
under this section other than what is required by 
this section. 
(4) OVERSIGHT.—Each State administering the 
Clean Energy Rebate Program shall— 
(A) assume responsibility for the certifi-
cation of eligible households and for the 
issuance of rebates and the control and ac-
countability thereof; and 
(B) report information to the Secretary at 
such a time and manner as determined appro-
priate by the Secretary. 
(f) OUTREACH.—The Secretary shall carry out a ro-
bust and comprehensive outreach program to ensure that 
eligible households learn of their eligibility for rebates and 
are advised of the opportunity to receive such rebates. 
(g) TAX TREATMENT.—Rebate amounts provided 
under this section may not be includible in the gross in-
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122 
come of the recipient for purposes of the Internal Revenue 
Code of 1986. 
(h) REGULATIONS.—Not later than 24 months after 
the date of enactment of this title, the Secretary shall 
issue such regulations, or guidance, as the Secretary de-
termines necessary or appropriate for the effective and ef-
ficient administration of the Clean Energy Rebate Pro-
gram. 
(i) DEFINITIONS.—In this section: 
(1) ELIGIBLE HOUSEHOLD.—The term ‘‘eligible 
household’’ means a household— 
(A) for which the gross income of the 
household does not exceed 200 percent of the 
poverty line; 
(B) for which the relevant State agency of 
the State in which the household is located de-
termines that the household is participating 
in— 
(i) the supplemental nutrition assist-
ance program authorized by the Food and 
Nutrition Act of 2008 (7 U.S.C. 2011 et 
seq.); 
(ii) the food distribution program on 
Indian reservations authorized by section 
4(b) of such Act; or 
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123 
(iii) the program for nutrition assist-
ance in Puerto Rico or American Samoa 
under section 19 of such Act; 
(C) that consists of a single individual or 
a married couple, and receives benefits under 
the supplemental security income program 
under title XVI of the Social Security Act (42 
U.S.C. 1381 et seq.); and 
(D) of which at least one member is a cit-
izen or permanent legal resident. 
(2) GROSS
INCOME
OF
A
HOUSEHOLD.—The 
term ‘‘gross income of a household’’ means the gross 
income of a household that is determined in accord-
ance with standards and procedures established 
under section 5 of the Food and Nutrition Act of 
2008 (7 U.S.C. 2014). 
(3) HOUSEHOLD.—The term ‘‘household’’ has 
the meaning given the term ‘‘Household’’ in section 
3(m) of the Food and Nutrition Act of 2008 (7 
U.S.C. 2012(m)). 
(4) POVERTY LINE.—The term ‘‘poverty line’’ 
has the meaning given such term in section 673(2) 
of the Community Services Block Grant Act (42 
U.S.C. 9902). 
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124 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
(6) STATE.—The term ‘‘State’’ means the 50 
States, the District of Columbia, the Commonwealth 
of Puerto Rico, American Samoa, the United States 
Virgin Islands, Guam, and the Commonwealth of the 
Northern Mariana Islands. 
SEC. 103. WORKER AND COMMUNITY ASSISTANCE FUND. 
(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a fund, to be known as the 
Worker and Community Assistance Fund, consisting of— 
(1) such amounts as are deposited in the fund 
under sections 722(g) and 752 of the Clean Air Act; 
and 
(2) such additional amounts as may be appro-
priated to supplement the fund. 
(b) EXPENDITURES FROM FUND.— 
(1) AVAILABILITY.—Amounts deposited in the 
fund pursuant to subsection (a) shall be available to 
the Secretary of Labor and the Director of the Of-
fice of Energy and Economic Transition without 
subsequent appropriation and shall remain available 
without fiscal year limitation until expended. 
(2) ADMINISTRATIVE
EXPENSES.—The Sec-
retary of Labor and the Director of the Office of 
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125 
Energy and Economic Transition may use not more 
than 5 percent of the amount available in the Work-
er and Community Assistance Fund on October 1 of 
each fiscal year to cover the administrative expenses 
of carrying out title II of this Act for that fiscal 
year. 
SEC. 104. CLEANER AIR COMMUNITY FUND. 
(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a fund, to be known as the 
Cleaner Air Community Fund, consisting of— 
(1) such amounts as are deposited in the fund 
under sections 722(h) and 752 of the Clean Air Act; 
and 
(2) such additional sums as may be appro-
priated to supplement the fund. 
(b) EXPENDITURES FROM FUND.— 
(1) IN GENERAL.—Amounts deposited in the 
fund pursuant to subsection (a) shall be available to 
the Administrator of the Environmental Protection 
Agency without subsequent appropriation and shall 
remain available without fiscal year limitation until 
expended. 
(2) ADMINISTRATIVE EXPENSES.—The Admin-
istrator of the Environmental Protection Agency 
may use not more than 5 percent of the amount 
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126 
available in the Cleaner Air Community Fund on 
October 1 of each fiscal year to cover the adminis-
trative expenses of carrying out part C of title VII 
of the Clean Air Act for that fiscal year. 
SEC. 105. NEGATIVE EMISSIONS ACTIVITIES FUND. 
(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a fund, to be known as the 
Negative Emissions Activities Fund, consisting of— 
(1) such amounts as are deposited in the fund 
under sections 722(i) and 752 of the Clean Air Act; 
and 
(2) such additional amounts as may be appro-
priated to supplement the fund. 
(b) EXPENDITURES FROM FUND.— 
(1) IN GENERAL.—Amounts deposited in the 
fund pursuant to subsection (a) shall be available to 
the Administrator of the Environmental Protection 
Agency without subsequent appropriation and shall 
remain available without fiscal year limitation until 
expended. 
(2) ADMINISTRATIVE EXPENSES.—The Admin-
istrator of the Environmental Protection Agency 
may use not more than 5 percent of the amount 
available in the Negative Emissions Activities Fund 
on October 1 of each fiscal year to cover the admin-
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127 
istrative expenses of carrying out part D of title VII 
of the Clean Air Act for that fiscal year. 
SEC. 106. ENERGY INNOVATION FUND. 
(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a fund, to be known as the 
Energy Innovation Fund, consisting of— 
(1) such amounts as are deposited in the fund 
under section 722(j) and 752 of the Clean Air Act; 
and 
(2) such additional amounts as may be appro-
priated to supplement the fund. 
(b) EXPENDITURES FROM FUND.— 
(1) IN
GENERAL.—Beginning in fiscal year 
2027, amounts deposited in the fund pursuant to 
subsection (a) shall be available to the Secretary of 
Energy without subsequent appropriation and shall 
remain available without fiscal year limitation until 
expended to provide assistance pursuant to sub-
section (c). 
(2) ADMINISTRATIVE
EXPENSES.—The Sec-
retary of Energy may use not more than 5 percent 
of the amount available in the Energy Innovation 
Fund on October 1 of each fiscal year to cover the 
administrative expenses of carrying out this section 
for that fiscal year. 
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128 
(c) USE OF FUNDS.—The Secretary of Energy shall 
provide assistance under this section, distributed on a 
competitive basis, to local, State, and Tribal governments, 
institutions of higher education, companies, research foun-
dations, trade and industry research collaborations, or 
consortia of such entities, or other appropriate research 
and development entities to support research, develop-
ment, and demonstration of technology that the Secretary 
determines supports achievement of the goal established 
by section 702 of the Clean Air Act, including through 
targeted acceleration of— 
(1) novel early-stage clean energy research; 
(2) development of techniques, processes, and 
technologies, and related testing and evaluation; 
(3) development of manufacturing processes for 
clean energy technologies; and 
(4) demonstration for commercial applications 
of clean energy technologies. 
(d) SUPPLEMENT NOT SUPPLANT.—Assistance pro-
vided under this section shall be used to supplement, and 
not to supplant, any other Federal resources available to 
carry out the activities described in this section. 
(e) REPORT TO CONGRESS.—Not later than 3 years 
after the date of enactment of this Act, and each year 
thereafter, the Secretary of Energy shall submit to Con-
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129 
gress and make available to the public a report that de-
scribes the activities funded by the Energy Innovation 
Fund. 
SEC. 107. EMISSION ALLOWANCE MARKET OVERSIGHT. 
(a) DEFINITION OF EMISSION ALLOWANCE.—In this 
section, the term ‘‘emission allowance’’ means any emis-
sion allowance established or issued under title VII of the 
Clean Air Act, or any derivative of such allowance. 
(b) INTERAGENCY WORKING GROUP.— 
(1) ESTABLISHMENT.—Not later than 1 year 
after the date of enactment of this section, the 
President shall establish an interagency working 
group to support the oversight of emission allowance 
transactions. Such working group shall include rep-
resentatives from— 
(A) the Environmental Protection Agency; 
(B) the Federal Energy Regulatory Com-
mission; 
(C) the Commodity Futures Trading Com-
mission; and 
(D) other relevant Federal agencies as de-
termined by the President. 
(2) RECOMMENDATIONS.—The working group 
shall make periodic recommendations to Congress 
and relevant Federal agencies to— 
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(A) provide for effective and comprehensive 
market oversight of emission allowance trans-
actions; 
(B) prohibit fraud, market manipulation, 
and excess speculation related to emission al-
lowance transactions; 
(C) limit unreasonable fluctuation in the 
prices of emission allowances; 
(D) ensure market transparency to provide 
for efficient price discovery, prevention of fraud, 
market manipulation, and excess speculation; 
and 
(E) facilitate compliance with title VII of 
the Clean Air Act. 
(3) REPORT.—Not later than 3 years after the 
date of enactment of this section, and biennially 
thereafter, the interagency working group shall sub-
mit to the President and Congress a written report 
that includes the recommendations made under 
paragraph (2) for— 
(A) regulations and other actions to be 
taken by Federal agencies to enhance the over-
sight of emission allowance transactions; and 
(B) statutory changes needed to ensure the 
proper operation and oversight of transparent, 
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137 
(3) assess impacts and potential impacts associ-
ated with the United States transition to achieving 
net-zero greenhouse gas emissions on workers in the 
types of occupations identified under paragraph (2); 
(4) identify skills, including professional certifi-
cations, typically associated with each type of occu-
pation identified under paragraph (2) and potential 
occupations utilizing the same or similar skills in in-
dustries not impacted by the United States transi-
tion to achieving net-zero greenhouse gas emissions, 
including an estimate of average wages and benefits 
for each such potential occupation; 
(5) identify the ages and locations of, and exist-
ing debt burdens, including debt burdens resulting 
from Department of Agriculture Rural Utilities 
Service loans, related to existing fossil fuel-powered 
electricity generating units; 
(6) identify municipal and county governments 
that derive— 
(A) more than 25 percent of locally gen-
erated tax revenue or employment within the 
jurisdiction of the government from industries 
employing workers in types of occupations iden-
tified under paragraph (2); and 
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156 
(f) DETERMINATION OF PAYMENT AMOUNT.—The 
amount of a payment under this section shall be deter-
mined by the Director based on the eligible local revenues 
from one or more impacted employers to an eligible local 
government entity equal to— 
(1) 90 percent of eligible local revenues in the 
first and second years; 
(2) 75 percent of eligible local revenues in the 
third and fourth years; 
(3) 50 percent of eligible local revenues in the 
fifth and sixth years; and 
(4) 25 percent of eligible local revenues in the 
seventh and eighth years. 
(g) ADJUSTMENT
OF PAYMENT AMOUNTS.—Not-
withstanding subsection (f), if the Director determines 
that the total amount of payments to eligible local govern-
ment entities in any year would exceed the amount of 
funding made available to carry out this section for that 
year, the Director may reduce each eligible local govern-
ment entity’s payment on a pro rata basis. 
(h) REPORT TO THE DIRECTOR.—An eligible local 
government entity receiving payment under this section 
shall be required to submit an annual report to the Direc-
tor explaining the use of payments, including a description 
of funding used for— 
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