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submitted pursuant to paragraph (1), and annually 
thereafter, the Administrator of USAID, in consulta-
tion with the Secretary of State, shall submit to the 
President and the appropriate congressional commit-
tees a report that— 
(A) describes the extent to which global cli-
mate change, through its potential negative im-
pacts on sensitive populations and natural re-
sources in the most vulnerable developing coun-
tries, may threaten, cause, or exacerbate polit-
ical, economic, environmental, cultural, or social 
instability or international conflict in those re-
gions; 
(B) describes the ramifications of any po-
tentially destabilizing impacts climate change 
may have on the national security, foreign pol-
icy, and economic interests of the United 
States, including— 
(i) the creation of environmental mi-
grants and internally displaced peoples; 
(ii) international or internal armed 
conflicts over water, food, land, or other 
resources; 
(iii) loss of agricultural and other live-
lihoods, cultural stability, and other causes 
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of increased poverty and economic desta-
bilization; 
(iv) decline in availability of resources 
needed for survival, including water; 
(v) increased impact of natural disas-
ters (including droughts, flooding, and 
other severe weather events); 
(vi) increased prevalence or virulence 
of climate-related diseases; and 
(vii) intensified urban migration; 
(C) describes how allowances available 
under this section were distributed during the 
previous fiscal year to enhance the national se-
curity, foreign policy, and economic interests of 
the United States and assist in avoiding the 
economically, politically, environmentally, cul-
turally, and socially destabilizing impacts of cli-
mate change in most vulnerable developing 
countries; 
(D) identifies and recommends the devel-
oping countries, including the most vulnerable 
communities and populations therein, that are 
most vulnerable to climate change impacts and 
in which assistance may have the greatest and 
most sustainable benefit in reducing vulner-
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ability to climate change, including in the form 
of deploying technologies, investments, capacity- 
building activities, and other types of assistance 
for adaptation to climate change impacts and 
approaches to reduce greenhouse gases in ways 
that may also provide community-level resilience 
to climate change impacts; and 
(E) describes cooperation undertaken with 
other nations and international organizations to 
carry out this part. 
(e) MONITORING AND EVALUATION.— 
(1) 
IN
GENERAL.—The 
Administrator 
of 
USAID shall establish and implement a system to 
monitor and evaluate the effectiveness and efficiency 
of assistance provided under this section in order to 
maximize the long-term sustainable development im-
pact of such assistance, including the extent to 
which such assistance is meeting the purposes of 
this part and addressing the adaptation needs of de-
veloping countries. 
(2) REQUIREMENTS.—In carrying out para-
graph (1), the Administrator of USAID shall— 
(A) in consultation with national govern-
ments in recipient countries, establish perform-
ance goals for assistance authorized under this 
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section and express such goals in an objective 
and quantifiable form, to the extent practicable; 
(B) establish performance indicators to be 
used in measuring or assessing the achievement 
of the performance goals described in subpara-
graph (A), including an evaluation of— 
(i) the extent to which assistance 
under this section provided for disclosure 
of information to, consultation with, and 
informed participation by local commu-
nities; 
(ii) the extent to which local commu-
nities participated in the design, implemen-
tation, and evaluation of programs and ac-
tivities implemented pursuant to this sec-
tion; and 
(iii) the impacts of such participation 
on the goals and objectives of the pro-
grams and activities implemented under 
this section; 
(C) provide a basis for recommendations 
for adjustments to assistance authorized under 
this section to enhance the impact of such as-
sistance; and 
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(D) include, in the annual report to the 
appropriate congressional committees and other 
relevant agencies required under subsection 
(d)(2), findings resulting from the monitoring 
and evaluation of programs and activities under 
this section. 
Subtitle F—Deficit Neutral 
Budgetary Treatment 
SEC. 496. DEFICIT NEUTRALITY. 
(a) FUNDS ESTABLISHED.—Funds established under 
sections 422, 467, and 480 of this Act are to be treated 
as separate accounts in the Treasury and shall be known 
as ‘‘the Funds’’. 
(b) AVAILABILITY.—Funds appropriated or made 
available pursuant to sections 422(b), 467(b), and 
480(b)(2) are only available for the purposes set forth 
under this Act. Receipts in the Funds and appropriations 
therefrom shall not be available and are precluded from 
obligation for any other purpose. 
(c) ESTIMATION OF BUDGETARY IMPACT.—For the 
purposes of estimating the revenue and spending effects 
of this Act; 
(1) the revenue assumed to be deposited into 
the Funds established under sections 422, 467, and 
480, shall be attributed to this Act; and 
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(2) the authorization or availability of appro-
priations from the Funds shall be treated as new di-
rect spending and attributed to this Act. 
(d) BUDGETARY TREATMENT.—For the purposes of 
section 257 of the Balanced Budget and Emergency Def-
icit Control Act of 1985, the Funds, and amounts subse-
quently appropriated or made available for the purposes 
for which such Funds were established, shall be deemed 
to be included on the list of appropriations referenced 
under section 250(c)(17) of that Act. Such appropriations 
from each Fund shall not be in excess of the amounts de-
posited into the respective Fund in the previous year. 
TITLE V—AGRICULTURAL AND 
FORESTRY RELATED OFFSETS 
Subtitle A—Offset Credit Program 
From Domestic Agricultural and 
Forestry Sources 
SEC. 501. DEFINITIONS. 
(a) IN GENERAL.—In this title: 
(1) 
ADDITIONAL.—The 
term 
‘‘additional’’, 
when used with respect to reductions or avoidance of 
greenhouse gas emissions, or to sequestration of 
greenhouse gases, means reductions, avoidance, or 
sequestration that result in a lower level of net 
greenhouse gas emissions or atmospheric concentra-
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tions than would occur in the absence of an offset 
project. 
(2) ADDITIONALITY.—The term ‘‘additionality’’ 
means the extent to which reductions or avoidance 
of greenhouse gas emissions, or sequestration of 
greenhouse gases, are additional. 
(3) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency. 
(4) ADVISORY COMMITTEE.—The term ‘‘Advi-
sory Committee’’ means the USDA Greenhouse Gas 
Emission Reduction and Sequestration Advisory 
Committee established under section 1245(f) of the 
Food Security Act of 1985 (16 U.S.C. 3845). 
(5) GREENHOUSE GAS.—The term ‘‘greenhouse 
gas’’ means any of the following: 
(A) Carbon dioxide. 
(B) Methane. 
(C) Nitrous oxide. 
(D) Sulfur hexafluoride. 
(E) Hydrofluorocarbons from a chemical 
manufacturing process at an industrial sta-
tionary source. 
(F) Any perfluorocarbon. 
(G) Nitrogen trifluoride. 
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(H) Any other anthropogenic gas des-
ignated as a greenhouse gas by the Adminis-
trator. 
(6) LEAKAGE.—The term ‘‘leakage’’ means a 
significant and quantifiable increase in greenhouse 
gas emissions, or a significant and quantifiable de-
crease in sequestration, which is caused by an offset 
practice and occurs outside the boundaries of the 
offset practice. 
(7) OFFSET CREDIT.—The term ‘‘offset credit’’ 
means a tradeable compliance instrument that— 
(A) represents the reduction, avoidance, or 
sequestration of 1 ton of carbon dioxide equiva-
lent; and 
(B) is issued pursuant to this title. 
(8) OFFSET PRACTICE.—The term ‘‘offset prac-
tice’’ means an activity that reduces, avoids, or se-
questers greenhouse gas emissions, and for which 
offset credits may be issued pursuant to this title. 
(9) OFFSET PRODUCER.—The term ‘‘offset pro-
ducer’’ means an owner, operator, landlord, tenant, 
or sharecropper who has or shares responsibility for 
ensuring that an offset practice is established and 
maintained during the crediting period for purposes 
of an offset credit. 
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(10) OFFSET
PROJECT.—The term ‘‘offset 
project’’ means a practice or set of practices that re-
duce or avoid greenhouse gas emissions, or sequester 
greenhouse gases as implemented by an offset pro-
ducer. 
(11) OFFSET PROJECT DEVELOPER.—The term 
‘‘offset project developer’’ means the offset producer 
or designee of the offset producer. 
(12) PRACTICE
TYPE.—The term ‘‘practice 
type’’ means a discrete category of offset practices 
for which the Secretary develops a standardized 
methodology to accurately estimate the amount of 
greenhouse gas emissions reduced or avoided or 
greenhouse gases sequestered. 
(13) REVERSAL.—The term ‘‘reversal’’ means 
an intentional or unintentional loss of sequestered 
greenhouse gases to the atmosphere. 
(14) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Agriculture. 
(15) SEQUESTRATION
AND
SEQUESTERED.— 
The terms ‘‘sequestered’’ and ‘‘sequestration’’ mean 
the separation, isolation, or removal of greenhouse 
gases from the atmosphere, as determined by the 
Secretary. The terms include biological sequestra-
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tion, but do not include ocean fertilization tech-
niques. 
(16) TERM OFFSET CREDIT.—The term ‘‘term 
offset credit’’ means a compliance instrument au-
thorized under section 504(d). 
(b) AGRICULTURAL AND FORESTRY EXCEPTION TO 
DEFINITION OF CAPPED SECTOR.—For purposes of this 
title and title III of this Act, and amendments made by 
such titles, the term ‘‘capped sector’’ means a sector of 
economic activity that directly emits capped emissions, in-
cluding the industrial sector, the electricity generation sec-
tor, the transportation sector, and the residential and 
commercial sectors (to the extent they burn oil or natural 
gas), but not including the agricultural or forestry sectors. 
SEC. 502. ESTABLISHMENT OF OFFSET CREDIT PROGRAM 
FROM DOMESTIC AGRICULTURAL AND FOR-
ESTRY SOURCES. 
(a) ESTABLISHMENT.—Not later than 1 year after 
the date of enactment of this title, the Secretary shall es-
tablish a program governing the generation of offset cred-
its from domestic agricultural and forestry sources. 
(b) REQUIREMENTS.—The program described in sub-
section (a) shall— 
(1) 
ensure 
that 
offset 
credits 
represent 
verifiable and additional greenhouse gas emission re-
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ductions or avoidance, or increases in sequestration; 
and 
(2) ensure that offset credits issued for seques-
tration offset projects are only issued for greenhouse 
gas reductions that result in a permanent net reduc-
tion in atmospheric greenhouse gases. 
(c) DUTIES OF SECRETARY.—In addition to the du-
ties described in subsection (a) and section 1245 of the 
Food Security Act of 1985 (16 U.S.C. 3845), the Sec-
retary shall, with respect to practices relating to offset 
credits from agricultural and forestry sources— 
(1) establish by rule methodologies by practice 
types for quantifying greenhouse gas benefits; 
(2) establish by rule methodologies for each 
practice type for establishing activity baselines and 
determining additionality; 
(3) establish by rule methodologies by practice 
types for accounting for and mitigating potential 
leakage; 
(4) establish rules to account for and address 
reversals; 
(5) establish rules to require third-party 
verification; 
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(6) provide technical assistance to offset project 
developers using funds appropriated to the Con-
servation Operations account; 
(7) establish rules for approval of offset project 
plans; 
(8) establish rules for certification of implemen-
tation of offset project plans; 
(9) establish by rule requirements for reporting 
and record keeping; and 
(10) conduct audits. 
SEC. 503. LIST OF ELIGIBLE DOMESTIC AGRICULTURAL 
AND FORESTRY OFFSET PRACTICE TYPES. 
(a) LIST REQUIRED.— 
(1) PREPARATION
AND
PUBLICATION.—Not 
later than 1 year after the date of enactment of this 
title, the Secretary shall prepare and publish in the 
Federal Register a list of domestic agricultural and 
forestry practice types that are eligible to generate 
offset credits under this title because the practices 
avoid or reduce greenhouse gas emissions or seques-
ter greenhouse gases. 
(2) RECOMMENDATIONS.—In preparing the list 
under paragraph (1), the Secretary shall take into 
consideration the recommendations of the Advisory 
Committee. 
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(b) INITIAL LIST.—At a minimum, the list prepared 
under this section shall include those practices that avoid 
or reduce greenhouse gas emissions or sequester green-
house gases, such as— 
(1) agricultural, grassland, and rangeland se-
questration and management practices, including— 
(A) altered tillage practices; 
(B) winter cover cropping, continuous 
cropping, and other means to increase biomass 
returned to soil in lieu of planting followed by 
fallowing; 
(C) reduction of nitrogen fertilizer use or 
increase in nitrogen use efficiency; 
(D) reduction in the frequency and dura-
tion of flooding of rice paddies; 
(E) reduction in carbon emissions from or-
ganic soils; 
(F) reduction in greenhouse gas emissions 
from manure and effluent; and 
(G) reduction in greenhouse gas emissions 
due to changes in animal management prac-
tices, including dietary modifications; 
(2) changes in carbon stocks attributed to land 
use change and forestry activities, including— 
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(A) afforestation or reforestation of acre-
age that is not forested; 
(B) forest management resulting in an in-
crease in forest carbon stores including but not 
limited to harvested wood products; 
(C) management of peatland or wetland; 
(D) conservation of grassland and forested 
land; 
(E) improved forest management, includ-
ing accounting for carbon stored in wood prod-
ucts; 
(F) reduced deforestation or avoided forest 
conversion; 
(G) urban tree-planting and maintenance; 
(H) agroforestry; and 
(I) adaptation of plant traits or new tech-
nologies that increase sequestration by forests; 
and 
(3) manure management and disposal, includ-
ing— 
(A) waste aeration; 
(B) biogas capture and combustion; and 
(C) application to fields as a substitute for 
commercial fertilizer. 
(c) ADDITIONS AND REVISIONS TO LIST.— 
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(1) PERIODIC
REVISION.—Not later than 2 
years after the date of enactment of this title, and 
every 2 years thereafter, the Secretary, after public 
notice and opportunity for comment, shall add to 
and revise the types of offset practices to the list es-
tablished under subsection (a) if those types of prac-
tices meet the standards for environmental integrity 
that are consistent with the purposes of this title. 
(2) CONSIDERATION OF PETITIONS.—The Sec-
retary shall— 
(A) consider petitions to add types of off-
set practices to the list established under sub-
section (a); and 
(B) add those types of offset practices to 
the list if the types of offset practices meet 
standards for environmental integrity consistent 
with the purposes of this title. 
(3) TIME
FOR
CONSIDERATION
OF
PETI-
TIONS.—Not later than 1 year after the receipt of 
a petition under paragraph (2), the Secretary shall 
make a decision to either grant or deny the petition 
and publish a written explanation of the reasons for 
the Secretary’s decision. The Secretary may not 
deny a petition under this subsection on the basis of 
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inadequate Department of Agriculture resources at 
the time of the review. 
SEC. 504. REQUIREMENTS FOR DOMESTIC AGRICULTURAL 
AND FORESTRY PRACTICES. 
(a) METHODOLOGIES.— 
(1) IN GENERAL; CONDITION.—In promulgating 
regulations under section 502, the Secretary shall 
establish methodologies for domestic agricultural 
and forestry practices listed under section 503, if 
the Secretary determines that methodologies can be 
established for such practices that meet each of the 
requirements of this section. The Secretary shall 
only issue offset credits under this title pursuant to 
promulgated methodologies applicable to the offset 
practice that avoided or reduced greenhouse gas 
emissions or sequestered greenhouse gases. 
(2) SPECIFIED
METHODOLOGIES.—The Sec-
retary shall establish the following methodologies 
under this section: 
(A) ACTIVITY BASELINES.—A standardized 
methodology for establishing activity baselines 
for an offset practice of that type. The Sec-
retary shall set activity baselines to reflect a 
conservative estimate of performance or activi-
ties for the relevant type of practice (excluding 
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changes in performance or activities due to the 
availability of offset credits) such that the base-
line provides an adequate margin of safety to 
ensure the environmental integrity of offset 
credits calculated in reference to such baseline. 
(B) 
ADDITIONALITY.—A 
standardized 
methodology for determining the additionality 
of greenhouse gas emissions reduction or avoid-
ance, or greenhouse gas sequestration, achieved 
by an offset practice of that type. Such method-
ology shall ensure, at a minimum, that any 
greenhouse gas emission reduction or avoidance, 
or any greenhouse gas sequestration, is consid-
ered additional only to the extent that it results 
from activities that— 
(i) are not required by existing gov-
ernment regulations, as determined by the 
Secretary; 
(ii) were not commenced prior to Jan-
uary 1, 2009, except in the case of— 
(I) offset project activities that 
commenced after January 1, 2001, 
and were registered as of the date of 
enactment of this title under an offset 
program with respect to which an af-
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firmative 
determination 
has 
been 
made under section 740 of the Clean 
Air Act; or 
(II) activities that are readily re-
versible, with respect to which the 
Secretary may set an alternative ear-
lier date under this subparagraph that 
is not earlier than January 1, 2001, 
where the Secretary determines that 
setting such an alternative date may 
produce an environmental benefit by 
removing an incentive to cease and 
then reinitiate activities that began 
prior to January 1, 2009; and 
(iii) exceed the applicable activity 
baseline established under paragraph (2). 
(C) QUANTIFICATION METHODS.—A stand-
ardized methodology for determining the extent 
to which greenhouse gas emission reductions or 
avoidance, or greenhouse gas sequestration, 
achieved by an offset practice of that type ex-
ceeded a relevant activity baseline, including 
methods for monitoring and accounting for un-
certainty. 
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(D) LEAKAGE.—A standardized method-
ology for accounting for and mitigating poten-
tial leakage, if any, from an offset practice of 
that type, taking uncertainty into account, ex-
cluding international indirect land use changes 
unless a positive determination is made under 
section 211(o)(13)(C)(iii) of the Clean Air Act. 
(b) SPECIAL CONSIDERATIONS.— 
(1) EXISTING OFFSET PRACTICES.—In estab-
lishing the methodologies under subsection (a), the 
Secretary shall give due consideration to methodolo-
gies for offset practices existing as of the date of the 
enactment of this title. 
(2) CERTAIN FACTORS.—As part of the meth-
odologies established under subsection (a), the Sec-
retary shall establish a formula that takes into ac-
count the components of the practice, the character-
istics of the land on which the practice is applied, 
the crop produced, and such other factors as deter-
mined appropriate by the Secretary. 
(c) ACCOUNTING FOR REVERSALS.— 
(1) IN GENERAL.—Except as provided in sub-
section (d) with respect to issuance of a term offset 
credit, for each type of practice listed under section 
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503, the Secretary shall establish requirements to 
account for and address reversals, including— 
(A) a requirement to report any reversal 
with respect to an offset practice for which off-
set credits have been issued under this title; 
(B) provisions to require emission allow-
ances or offset credits to be held in amounts to 
fully compensate for greenhouse gas emissions 
attributable to reversals, and to assign responsi-
bility for holding such emission allowances; and 
(C) any other provisions that the Secretary 
determines to be necessary to account for and 
address reversals. 
(2) MECHANISMS.— 
(A) IN
GENERAL.—The Secretary shall 
prescribe mechanisms to ensure that any se-
questration of greenhouse gases, with respect to 
which an offset credit is issued under this title, 
results in a permanent net increase in seques-
tration of greenhouse gases, and that full ac-
count is taken of any actual or potential rever-
sal of such sequestration, with an adequate 
margin of safety. 
(B) SPECIFIC
MECHANISMS.—The Sec-
retary shall make available one or more of the 
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following mechanisms to meet the requirements 
of this paragraph: 
(i) An offsets reserve, pursuant to 
paragraph (3). 
(ii) Insurance that provides for pur-
chase and provision to the Secretary for 
retirement of a quantity of offset credits or 
emission allowances equal in number to the 
tons of carbon dioxide equivalents of green-
house gas emissions released due to rever-
sal. 
(iii) Another mechanism if the Sec-
retary determines it is necessary to satisfy 
the requirements of this title, taking into 
account whether the reversal was inten-
tional or unintentional. 
(3) OFFSETS RESERVE.— 
(A) IN GENERAL.—An offsets reserve re-
ferred to in paragraph (2)(B)(i) is a program 
under which, before issuance of offset credits 
under this title, the Secretary shall— 
(i) subtract and reserve from the 
quantity to be issued a quantity of offset 
credits based on the risk of reversal; 
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(ii) hold those reserved offset credits 
in the offsets reserve; and 
(iii) register the holding of the re-
served offset credits in an offset registry. 
(B) PRACTICE REVERSAL.— 
(i) IN
GENERAL.—If a reversal has 
occurred with respect to an offset practice 
within an offset project, for which offset 
credits are reserved under this paragraph, 
the Secretary shall retire offset credits 
from the offsets reserve to fully account 
for the tons of carbon dioxide equivalent 
that are no longer sequestered. 
(ii) INTENTIONAL REVERSALS.—If the 
Secretary determines that a reversal was 
intentional, the offset practice developer 
for the relevant offset practice shall place 
into the offsets reserve a quantity of offset 
credits, or combination of offset credits 
and emission allowances, equal in number 
to the number of reserve offset credits that 
were retired pursuant to clause (i). 
(iii) UNINTENTIONAL REVERSALS.—If 
the Secretary determines that a reversal 
was unintentional, the offset project devel-
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oper for the relevant offset project shall 
place into the offsets reserve a quantity of 
offset credits, or combination of offset 
credits and emission allowances, equal in 
number to half the number of offset credits 
that were reserved for that offset project, 
or half the number of reserve offset credits 
that were canceled due to the reversal pur-
suant to clause (i), whichever is less, ex-
cept that the Secretary may lower this 
amount based on undue hardship in the 
event of a catastrophic occurrence. 
(C) USE
OF
RESERVED
OFFSET
CRED-
ITS.—Offset credits placed into the offsets re-
serve under this paragraph may not be used to 
comply with section 722 of the Clean Air Act. 
(d) TERM OFFSET CREDITS.— 
(1) APPLICABILITY.—With respect to a practice 
listed under section 503 that sequesters greenhouse 
gases and has a crediting period of no more than 5 
years, the Secretary may address reversals pursuant 
to this subsection in lieu of permanently accounting 
for reversals pursuant to subsection (c). 
(2) ACCOUNTING FOR REVERSALS.—For such 
practices or projects implementing such practices, 
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the Secretary shall require only reversals that occur 
during the crediting period to be accounted for and 
addressed pursuant to subsection (c). 
(3) CREDITS ISSUED.—For practices or projects 
regulated pursuant to paragraph (2), the Secretary 
shall issue under section 507 a term offset credit, in 
lieu of an offset credit, for each ton of carbon diox-
ide equivalent that has been sequestered. 
(e) CREDITING PERIODS.— 
(1) IN GENERAL.—For each offset practice type 
within an offset project, the Secretary shall specify 
a crediting period, and establish provisions for re-
enrollment for a subsequent crediting period, in ac-
cordance with this subsection. 
(2) DURATION.—The crediting period shall 
have a term of up to— 
(A) 5 years for agricultural sequestration 
practices; 
(B) 20 years for forestry sequestration 
practices; and 
(C) 10 years for other practice types that 
reduce or avoid greenhouse gas emissions or se-
quester greenhouse gases. 
(3) ELIGIBILITY.—An offset practice, within an 
offset project, shall— 
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environmental integrity of the cap established under sec-
tion 703 of the Clean Air Act is not compromised. 
SEC. 505. PROJECT PLAN SUBMISSION AND APPROVAL. 
(a) PROJECT PLAN REQUIRED.—An offset project 
developer shall submit to the Secretary an offset project 
plan for approval. 
(b) REQUIREMENTS.—As part of the regulations pro-
mulgated under this title, the Secretary shall include pro-
visions for, and shall specify, the required components of 
an offset project plan, including— 
(1) designation of an offset project developer; 
(2) a list and schedule of the practices to be im-
plemented; 
(3) any other information that the Secretary 
considers to be necessary— 
(A) to determine whether the offset prac-
tice, within the offset project, is eligible for 
issuance of offset credits under regulations pro-
mulgated under this title; and 
(B) to achieve the purposes of this title. 
(c) TIME FOR CONSIDERATION; NOTIFICATION.—Not 
later than 90 days after receiving a complete offset project 
plan under subsection (a), the Secretary shall— 
(1) approve the plan in writing and include an 
estimate of the offset project credits that will be 
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earned if the plan is implemented, subject to 
verification of all project-specific variables; or 
(2) if the plan is denied, provide the reasons for 
denial in writing. 
(d) APPEAL.—The Secretary shall establish proce-
dures for appeal and review of determinations made under 
this section. 
(e) RESUBMISSION.—After an offset project plan is 
approved, the offset project developer shall not be required 
to resubmit a project plan during the crediting period. 
SEC. 506. VERIFICATION OF OFFSET PRACTICES. 
(a) IN GENERAL.—As part of the regulations promul-
gated under this title, the Secretary shall establish re-
quirements to verify— 
(1) that offset practices in an approved offset 
project plan have been implemented; and 
(2) the quantity of greenhouse gas emission re-
ductions or avoidance, or sequestration of green-
house gases, resulting from an offset practice and 
project. 
(b) VERIFICATION REPORTS.— 
(1) IN GENERAL.—The regulations described in 
subsection (a) shall require an offset project devel-
oper to submit a report, prepared by a third-party 
verifier accredited under subsection (c). 
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(2) 
REQUIREMENTS.—The 
Secretary 
shall 
specify the components of a verification report re-
quired under paragraph (1), including— 
(A) the name and contact information for 
the offset project developer; 
(B) a certification that the project plan 
has been implemented; 
(C) the quantity of greenhouse gases re-
duced, avoided, or sequestered; 
(D) a certification establishing that the 
conflict of interest requirements in the regula-
tions promulgated under this title have been 
complied with; 
(E) any other information that the Sec-
retary requires to determine the quantity of 
greenhouse gas emission reduction or avoidance, 
or sequestration of greenhouse gases, resulting 
from the offset practice and project; and 
(F) any other information that the Sec-
retary considers to be necessary to achieve the 
purposes of this title. 
(c) VERIFIER ACCREDITATION.— 
(1) IN GENERAL.—As part of the regulations 
promulgated under this title, the Secretary shall es-
tablish a process and requirements for periodic ac-
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creditation of third-party verifiers for offset credits 
under this program to ensure that those verifiers are 
professionally qualified and have no conflicts of in-
terest. 
(2) 
PUBLIC
ACCESSIBILITY.—Each 
verifier 
meeting the requirements for accreditation in ac-
cordance with this subsection shall be listed in a 
publicly accessible database, which shall be main-
tained and updated by the Secretary. 
SEC. 507. CERTIFICATION OF OFFSET CREDITS. 
(a) DETERMINATION AND NOTIFICATION.—Not later 
than 90 days after receiving a complete verification report, 
the Secretary shall— 
(1) make a determination of the quantity of 
greenhouse gas emissions that have been reduced or 
avoided, or greenhouse gases that have been seques-
tered, by the offset practice in an approved and 
verified offset project plan; and 
(2) notify the offset project developer in writing 
of the determination. 
(b) ISSUANCE OF OFFSET CREDITS.—The Secretary 
shall issue 1 offset credit to an offset project developer 
for each ton of carbon dioxide equivalent that the Sec-
retary determines has been reduced, avoided, or seques-
tered during the crediting period. Offset credits may be 
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issued only for greenhouse gas emissions reduced, avoided, 
or sequestered after January 1, 2009. 
(c) APPEAL.—The Secretary shall establish proce-
dures for appeal and review of determinations made under 
subsection (a). 
(d) TIMING.—Offset credits meeting the criteria de-
scribed in subsection (b) shall be issued by the Secretary 
not later than 14 days after the date on which the Sec-
retary makes a determination under subsection (a). 
(e) REGISTRATION.—The Secretary shall obtain from 
the Administrator a unique serial number to allow for the 
registration of each offset credit to be issued under this 
title. 
SEC. 508. OWNERSHIP AND TRANSFER OF OFFSET CREDITS. 
(a) OWNERSHIP.—Initial ownership of an offset cred-
it shall lie with the offset project developer, unless other-
wise specified in a legally binding contract or agreement. 
(b) TRANSFERABILITY.—An offset credit issued 
under this title may be sold, traded, or transferred, unless 
the offset credit has expired or been retired. 
SEC. 509. PROGRAM REVIEW AND REVISION. 
At least once every 5 years, the Secretary shall review 
and, based on new or updated information and taking into 
consideration the recommendations of the Advisory Board, 
update and revise— 
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(1) the list of eligible practice types established 
under section 503; 
(2) the methodologies established, including 
specific activity baselines, under section 504(a); 
(3) the reversal requirements and mechanisms 
established or prescribed under subsections (c) and 
(d) of section 504; 
(4) measures to improve the accountability of 
the offsets program; and 
(5) any other requirements established under 
this title to ensure the environmental integrity and 
effective operation of this title. 
SEC. 510. ENVIRONMENTAL CONSIDERATIONS. 
If the Secretary lists forestry practices as eligible off-
set practice types under section 503, the Secretary, in con-
sultation with appropriate Federal agencies, shall promul-
gate regulations for the selection and use of species in for-
estry and other relevant land management-related offset 
practices— 
(1) to ensure that native species are given pri-
mary consideration in such practices; 
(2) to encourage the conservation of biological 
diversity in such practices; 
(3) to prohibit the use of federally designated 
or State-designated noxious weeds; 
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(4) to prohibit the use of a species listed by a 
regional or State invasive plant authority within the 
applicable region or State; and 
(5) in accordance with widely accepted, environ-
mentally sustainable forestry practices. 
SEC. 511. AUDITS. 
(a) AUDITS REQUIRED.—The Secretary shall con-
duct, on an annual basis, random audits of offset projects, 
offset credits, and the practices of third-party verifiers. At 
a minimum, the Secretary shall conduct audits each year 
for a representative sample of practice types and geo-
graphical areas. 
(b) ADDITIONAL AUTHORITY.—Nothing in this sec-
tion prevents the Secretary from conducting any audit the 
Secretary considers to be necessary. 
Subtitle B—USDA Greenhouse Gas 
Emission Reduction and Seques-
tration Advisory Committee 
SEC. 531. ESTABLISHMENT OF USDA GREENHOUSE GAS 
EMISSION REDUCTION AND SEQUESTRATION 
ADVISORY COMMITTEE. 
Section 1245 of the Food Security Act of 1985 (16 
U.S.C. 3854), as added by section 2709 of the Food, Con-
servation, and Energy Act of 2008 (Public Law 110–246; 
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122 Stat. 1809), is amended by adding at the end the 
following new subsection: 
‘‘(f) USDA GREENHOUSE GAS EMISSION REDUC-
TION AND SEQUESTRATION ADVISORY COMMITTEE.— 
‘‘(1) ESTABLISHMENT.—Not later than 30 days 
after the date of the enactment of the American 
Clean Energy and Security Act of 2009, the Sec-
retary shall establish an independent advisory com-
mittee, to be known as the ‘USDA Greenhouse Gas 
Emission Reduction and Sequestration Advisory 
Committee’, to provide scientific and technical advice 
on establishing, implementing, and ensuring the 
overall environmental integrity of an offset program 
for domestic agricultural and forestry practices that 
reduce or avoid greenhouse gas emissions, or seques-
ter greenhouse gases. 
‘‘(2) MEMBERSHIP.—The Advisory Committee 
shall be comprised of nine members, including a 
chairperson and vice-chairperson, appointed by the 
Secretary. Each member shall be qualified by edu-
cation, training, and experience to evaluate scientific 
and technical information for domestic agricultural 
and forestry offset practices that reduce or avoid 
greenhouse gas emissions or sequester greenhouse 
gases. 
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‘‘(3) TERMS.—Terms shall be 3 years in length, 
except for the initial terms, which may be up to 5 
years in length to allow staggered terms. Members 
may be reappointed only once for an additional 3- 
year term, and such term may follow directly after 
a first term. 
‘‘(4) 
DUTIES.—The 
Advisory 
Committee 
shall— 
‘‘(A) provide options and recommenda-
tions, not later than 180 days after the date of 
the enactment of the American Clean Energy 
and Security Act of 2009, to the Secretary re-
garding the establishment of methodologies as 
described in section 504 of such Act, taking 
into account relevant scientific information, in-
cluding— 
‘‘(i) the availability of representative 
data for use in developing an activity base-
line for a land area, forest, soil, industry 
sector, and facility type; 
‘‘(ii) 
the 
potential 
for 
accurate 
quanitification of greenhouse gas reduc-
tion, or sequestration for an offset practice 
type; 
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‘‘(iii) the potential level of scientific 
and measurement uncertainty associated 
with an offset practice type; and 
‘‘(iv) the use of practice methodologies 
that account for common practice or other 
direct comparisons within a relevant land 
area, industry sector, forest, soil, or facility 
type; 
‘‘(B) make available to the Secretary op-
tions and recommendations for the program as 
a whole and on offset methodologies for each 
practice type that should be considered under 
regulations promulgated pursuant to section 
504 of the American Clean Energy and Secu-
rity Act of 2009, including methodologies to ad-
dress the issues of additionality, activity base-
lines, measurement, leakage, including the ap-
plication of sector specific leakage factors, un-
certainty, permanence, and environmental in-
tegrity; 
‘‘(C) make available to the Secretary ad-
vice and comment on areas where further 
knowledge is required to appraise the adequacy 
of existing, revised, or proposed methodologies 
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and describe the research efforts necessary to 
provide the required information; 
‘‘(D) make available to the Secretary ad-
vice and comments on other ways to improve or 
safeguard the environmental integrity of the 
offset practice types listed under section 503 of 
the American Clean Energy and Security Act of 
2009; and 
‘‘(E) provide options and recommendations 
regarding new practice types. 
‘‘(5) SCIENTIFIC
REVIEW
OF
OFFSET
PRO-
GRAM.—Not later than January 1, 2017, and at 5- 
year intervals thereafter, the Advisory Committee 
shall— 
‘‘(A) submit to the Secretary and make 
available to the public an analysis of relevant 
scientific and technical information regarding 
agricultural and forestry offset practices that 
reduce or avoid greenhouse gas emissions or se-
quester greenhouse gases; 
‘‘(B) review approved and potential prac-
tice types, methodologies, scientific studies, off-
set 
project 
monitoring, 
offset 
project 
verification reports, reporting of reversals, au-
dits related to the offset program, and other 
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relevant information needed to evaluate the off-
set program; 
‘‘(C) evaluate the net emission effects of 
implemented offset projects; and 
‘‘(D) recommend changes to offset meth-
odologies, procedures, practice types, or the 
overall program to ensure that— 
‘‘(i) the offset practices result in re-
duced or avoided greenhouse gas emissions 
or sequestration of greenhouse gases; 
‘‘(ii) the offset credits issued by the 
Secretary do not compromise the integrity 
of the annual emissions reductions estab-
lished under section 703 of the Clean Air 
Act; and 
‘‘(iii) the offset program avoids or 
minimizes adverse affects to human health 
and the environment. 
‘‘(6) COORDINATION.—To avoid duplication, the 
Advisory Committee shall coordinate its activities 
with those of any other Federal advisory committees 
working in related areas, and shall to the maximum 
extent possible use research data and services of the 
research, education, extension agencies of the De-
partment of Agriculture. 
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‘‘(7) CONSULTATION.—On a periodic basis, the 
Advisory Committee shall consult with, and be in-
formed by the views of, the Offsets Integrity Advi-
sory Board established under section 731 of the 
Clean Air Act. 
‘‘(8) MEETING.—The Advisory Committee shall 
meet on at least a quarterly basis each year. 
‘‘(9) ADMINISTRATIVE
SUPPORT
AND
FUND-
ING.—The Secretary may provide such administra-
tive and funding support as necessary to enable the 
Advisory Committee to carry out its duties under 
this section. 
‘‘(10) REPORT.—For each fiscal year, the Sec-
retary shall submit to Congress a report on— 
‘‘(A) the status and progress on the offset 
practices; 
‘‘(B) the general status of cooperation and 
research and development; and 
‘‘(C) the plans for addressing future issues 
and concerns.’’. 
Subtitle C—Miscellaneous 
SEC. 551. INTERNATIONAL INDIRECT LAND USE CHANGES. 
Section 211(o) of the Clean Air Act (42 U.S.C. 
7545(o)) is amended by adding at the end the following 
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‘‘(13) INTERNATIONAL
INDIRECT
LAND
USE 
CHANGES.— 
‘‘(A) EXCLUSION FROM REGULATORY RE-
QUIREMENTS
REGARDING
LIFECYCLE
GREEN-
HOUSE
GAS
EMISSIONS.—Notwithstanding the 
definition of ‘lifecycle greenhouse gas emissions’ 
in paragraph (1)(H), for purposes of deter-
mining whether the fuel meets a definition in 
paragraph (1) or complies with paragraph 
(2)(A)(i), the Administrator shall exclude emis-
sions from indirect land use changes outside the 
renewable fuel’s feedstock’s country of origin. 
‘‘(B) NATIONAL ACADEMIES OF SCIENCE 
REPORT.—(i) Not later than 6 months after the 
date of enactment of this paragraph, the Ad-
ministrator and the Secretary of Agriculture 
shall jointly arrange for the National Academies 
of Science to review and report on specified 
issues related to indirect greenhouse gas emis-
sions related to transportation fuels. 
‘‘(ii) The report shall evaluate and report 
on whether there are economic and environ-
mental models and methodologies that individ-
ually, or as a system, can project with reli-
ability, predictability, and confidence— 
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‘‘(I) for purposes of determining 
whether the fuel meets a definition in 
paragraph (1) or complies with paragraph 
(2)(A)(i), indirect land use changes that 
are related to the production of renewable 
fuels and that may occur outside the coun-
try in which the feedstocks are grown, and 
the impacts of these changes on green-
house gas emissions; and 
‘‘(II) indirect effects, both domestic 
and international, related to the production 
and importation of non-renewable trans-
portation fuels that have significant green-
house gas emissions, and the impact of 
these effects on greenhouse gas emissions. 
‘‘(iii) The report shall include a review and 
assessment of all pertinent scientific studies, 
methodologies and data, shall evaluate potential 
methodologies for calculating such emissions 
(including 
an 
evaluation 
of 
methods 
for 
annualizing emissions associated with forest 
degradation or land conversion), and shall make 
appropriate 
recommendations. 
The 
rec-
ommendations shall address indirect effects, 
both domestic and international, related to the 
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production and importation of non-renewable 
transportation fuels that have significant green-
house gas emissions. The report shall use ap-
propriate validation procedures, including sensi-
tivity analyses, of how results change as as-
sumptions change. The evaluation shall include 
for a model, a methodology, or a system of 
models— 
‘‘(I) an assessment of how reliably the 
models, methodologies, or systems track 
actual outcomes over historical periods 
using available historical data; and 
‘‘(II) an assessment of how reliably 
the models, methodologies or systems will 
project future outcomes. 
‘‘(iv) The report shall be publicly available 
and shall include sufficient information and 
data such that economists and other scientists 
with relevant expertise that are not on the Na-
tional Academies of Science panel can fully 
evaluate the conclusions of the report. 
‘‘(v) The report shall be completed within 
3 years of the date of enactment of this para-
graph. 
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‘‘(C) DETERMINATION.—(i) The Adminis-
trator and the Secretary of Agriculture shall, 
after notice and an opportunity for public com-
ment, determine whether, for purposes of deter-
mining compliance with the percent reductions 
in lifecycle greenhouse gas emissions specified 
in paragraph (1) for various renewable fuels, 
scientifically valid models and methodologies 
exist to project indirect land use changes that 
are related to the production of renewable fuels 
and that occur outside the country in which the 
feedstocks are grown, and the impact of these 
changes on greenhouse gas emissions. 
‘‘(ii) The determination shall take into ac-
count the findings and recommendations of the 
report required under subparagraph (B), as 
well as other available scientific, economic, and 
other relevant information. The Administrator 
and the Secretary may also consider methods 
used by the Environmental Protection Agency, 
the Department of Agriculture, and other Fed-
eral agencies to assess or guide their related 
policies. 
‘‘(iii) The Administrator and the Secretary 
of Agriculture shall publish a proposed deter-
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mination not later than 4 years after date of 
enactment of this paragraph, and shall publish 
a final determination not later than 5 years 
after date of enactment of this paragraph. An 
explanation and justification of the determina-
tion shall be included in the proposed and final 
actions, together with a response to comments 
received. 
‘‘(D) RESPONSE TO DETERMINATION.—(i) 
In the event of a positive determination under 
subparagraph (C), the Administrator and the 
Secretary of Agriculture shall, after notice and 
an opportunity for public comment, by the same 
date jointly establish a methodology (or meth-
odologies) to calculate greenhouse gas emissions 
from indirect land use changes that are attrib-
utable to the production of renewable fuels and 
that occur outside the country in which feed-
stocks are grown for purposes of calculating a 
renewable fuel’s lifecycle greenhouse gas emis-
sions to determine whether the fuel meets a def-
inition in paragraph (1) or complies with para-
graph (2)(A)(i). The exclusion in subparagraph 
(A) shall end, and the Administrator shall issue 
a regulation by the same date that shall include 
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emissions from indirect land use changes out-
side the renewable fuel’s feedstock’s country of 
origin for purposes of calculating a renewable 
fuel’s lifecycle greenhouse gas emissions to de-
termine whether the fuel meets a definition in 
paragraph (1) or complies with paragraph 
(2)(A)(i) for renewable fuels sold in the cal-
endar year following the year of the positive de-
termination. The effective date of the regulation 
shall be 6 years after the date of enactment of 
this paragraph. 
‘‘(ii) A negative determination under sub-
paragraph (C) shall include a statement of the 
basis for the determination. 
‘‘(E) ACCOUNTABILITY.—The joint duties 
and actions of the Administrator and the Sec-
retary of Agriculture shall be subject to sections 
304 and 307 of this Act as if they were the du-
ties and actions of the Administrator alone.’’. 
SEC. 552. BIOMASS-BASED DIESEL. 
Section 211(o)(2)(A) of the Clean Air Act (42 U.S.C. 
7545(o)(2)(A)) is amended by adding at the end the fol-
lowing new clause: 
‘‘(v) 
GRANDFATHERING
BIOMASS- 
BASED DIESEL.—The Administrator shall 
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promulgate regulations exempting from the 
lifecycle greenhouse gas requirements in 
subparagraphs (B) and (D) of paragraph 
(1) up to the greater of 1 billion gallons or 
the volume mandate adopted pursuant to 
subparagraph (B)(ii) of biomass-based die-
sel annually from facilities that commenced 
construction before the date of enactment 
of the Energy Independence and Security 
Act of 2007.’’. 
SEC. 553. MODIFICATION OF DEFINITION OF RENEWABLE 
BIOMASS. 
(a) NATIONAL ACADEMY OF SCIENCES REPORT.— 
Not later than 1 year after the date of enactment of this 
Act, the Administrator of the Environmental Protection 
Agency, the Secretary of Agriculture, and the Federal En-
ergy Regulatory Commission shall jointly arrange for the 
National Academy of Sciences to evaluate how sources of 
renewable biomass contribute to the goals of increasing 
America’s energy independence, protecting the environ-
ment, and reducing global warming pollution. 
(b) MODIFICATION.— 
(1) EPA MODIFICATION AUTHORITY.—After re-
viewing the report required by subsection (a), the 
Administrator of the Environmental Protection 
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Agency, in concurrence with the Secretary of Agri-
culture, may, by regulation and after public notice 
and comment, modify the non-Federal lands portion 
of the definition of ‘‘renewable biomass’’ in sections 
211(o)(1)(I) and 700 of the Clean Air Act in order 
to advance the goals of increasing America’s energy 
independence, protecting the environment, and re-
ducing global warming pollution. 
(2) FERC MODIFICATION
AUTHORITY.—After 
reviewing the report required by subsection (a), the 
Federal Energy Regulatory Commission, in concur-
rence with the Secretary of Agriculture, may, by reg-
ulation and after public notice and comment, modify 
the non-Federal lands portion of the definition of 
‘‘renewable biomass’’ in section 610 of the Public 
Utility Regulatory Policies Act of 1978 in order to 
advance the goals of increasing America’s energy 
independence, protecting the environment, and re-
ducing global warming pollution. 
(c) FEDERAL LANDS.— 
(1) SCIENTIFIC REVIEW.—The Secretary of the 
Interior, the Secretary of Agriculture, and the Ad-
ministrator of the Environmental Protection Agency 
shall conduct a joint scientific review, within 1 year 
after the date of enactment of this Act, to evaluate 
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how sources of biomass from Federal lands could 
contribute to the goals of increasing America’s en-
ergy independence, protecting the environment, and 
reducing global warming pollution. 
(2) MODIFICATION AUTHORITY.—Based on the 
scientific review, the agencies may, by rule, modify 
the definition of ‘‘renewable biomass’’ from Federal 
lands in sections 211(o)(1)(I) and 700 of the Clean 
Air Act and section 610 of the Public Utility Regu-
latory Policies Act of 1978 as appropriate to ad-
vance the goals of increasing America’s energy inde-
pendence, protecting the environment, and reducing 
global warming pollution. 
Passed the House of Representatives June 26, 2009. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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