657 
HR 2454 PCS
proved with energy efficiency requirements de-
termined by the Secretary; and 
(B) includes such compliance and audit re-
quirements as the Secretary determines are nec-
essary to ensure that the program is operated 
in a sound and effective manner. 
(4) PREFERENCE.—In making loans during 
each fiscal year, the Secretary shall give preference 
to States and Indian tribes that have not previously 
received a loan under this subsection. 
(5) MAXIMUM
AMOUNT.—The aggregate out-
standing principal amount from loans under this 
subsection to any single State or Indian tribe may 
not exceed $500,000,000. 
(6) LOAN TERMS.—Each loan under this sub-
section shall have a term to maturity of not more 
than 10 years and shall bear interest at annual rate, 
determined by the Secretary, that shall not exceed 
interest rate charged by the Federal Reserve Bank 
of New York to commercial banks and other deposi-
tory institutions for very short-term loans under the 
primary credit program, as most recently published 
in the Federal Reserve Statistical Release on se-
lected interest rates (daily or weekly), and commonly 
referred to as the H.15 release, preceding the date 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00657
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
658 
HR 2454 PCS
of a determination for purposes of applying this 
paragraph. 
(7) LOAN
REPAYMENT.—The Secretary shall 
require full repayment of each loan made under this 
section. 
(d) INVESTMENT OF AMOUNTS.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury shall invest such amounts in the Fund that are 
not, in the judgment of the Secretary of the Treas-
ury, required to meet needs for current withdrawals. 
(2) OBLIGATIONS OF UNITED STATES.—Invest-
ments may be made only in interest-bearing obliga-
tions of the United States. 
(e) REPORTS.— 
(1) REPORTS TO SECRETARY.—For each year 
during the term of a loan made under subsection 
(c), the State or Indian tribe that received the loan 
shall submit to the Secretary a report describing the 
State or tribal alternative energy sources program 
for which the loan was made and the activities con-
ducted under the program using the loan funds dur-
ing that year. 
(2) REPORT
TO
CONGRESS.—Not later than 
September 30 of each year that loans made under 
subsection (c) are outstanding, the Secretary shall 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00658
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
659 
HR 2454 PCS
submit a report to the Congress describing the total 
amount of such loans provided under subsection (c) 
to each eligible State and Indian tribe during the fis-
cal year ending on such date, and an evaluation on 
effectiveness of the Fund. 
(f) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized 
to 
be 
appropriated 
to 
the 
Fund 
$5,000,000,000. 
(g) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given such term in section 4 of the 
Native American Housing Assistance and Self-De-
termination Act of 1996 (25 U.S.C. 4103). 
(2) STATE.—The term ‘‘State’’ means each of 
the several States, the Commonwealth of Puerto 
Rico, the District of Columbia, the Commonwealth 
of the Northern Mariana Islands, Guam, the Virgin 
Islands, American Samoa, the Trust Territories of 
the Pacific, or any other possession of the United 
States. 
SEC. 299E. GREEN BANKING CENTERS. 
(a) INSURED DEPOSITORY INSTITUTIONS.—Section 8 
of the Federal Deposit Insurance Act (12 U.S.C. 1818) 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00659
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
660 
HR 2454 PCS
is amended by adding at the end the following new sub-
section: 
‘‘(x) ‘GREEN BANKING’ CENTERS.— 
‘‘(1) IN GENERAL.—The Federal banking agen-
cies shall prescribe guidelines encouraging the estab-
lishment and maintenance of ‘green banking’ centers 
by insured depository institutions to provide any 
consumer who seeks information on obtaining a 
mortgage, home improvement loan, home equity 
loan, or renewable energy lease with additional infor-
mation on— 
‘‘(A) obtaining an home energy rating or 
audit for the residence for which such mortgage 
or loan is sought; 
‘‘(B) obtaining financing for cost-effective 
energy-saving improvements to such property; 
and 
‘‘(C) obtaining beneficial terms for any 
mortgage or loan, or qualifying for a larger 
mortgage or loan, secured by a residence which 
meets or will meet energy efficiency standards. 
‘‘(2) INFORMATION AND REFERRALS.—The in-
formation made available to consumers under para-
graph (1) may include— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00660
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
661 
HR 2454 PCS
‘‘(A) information on obtaining a home en-
ergy rating and contact information on quali-
fied energy raters in the area of the residence; 
‘‘(B) information on the secondary market 
guidelines that permit lenders to provide more 
favorable terms by allowing lenders to increase 
the ratio on debt-to-income requirements or to 
use the projected utility savings as a compen-
sating factor; 
‘‘(C) information including eligibility infor-
mation about, and contact information for, any 
conservation or renewable energy programs, 
grants, or loans offered by the Secretary of 
Housing and Urban Development, including the 
Energy Efficient Mortgage Program; 
‘‘(D) information including eligibility infor-
mation about, and contact information for, any 
conservation or renewable energy programs, 
grants, or loans offered for qualified military 
personal, reservists, and veterans by the Sec-
retary of Veterans Affairs; 
‘‘(E) information about, and contact infor-
mation for, the Office of Efficiency and Renew-
able Energy at the Department of Energy, in-
cluding the weatherization assistance program; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00661
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
662 
HR 2454 PCS
‘‘(F) information about, and contact infor-
mation for, the Energy Star Program of the 
Environmental Protection Agency; 
‘‘(G) information from, and contact infor-
mation for, the Federal Citizen Information 
Center of the General Services Administration 
on energy-efficient mortgages and loans, home 
energy rating systems, and the availability of 
energy-efficient mortgage information from a 
variety of Federal agencies; and 
‘‘(H) such other information as the agen-
cies or the insured depository institution may 
determine to be appropriate or useful.’’. 
(b) INSURED CREDIT UNIONS.—Section 206 of the 
Federal Credit Union Act (12 U.S.C. 1786) is amended 
by adding at the end the following new subsection: 
‘‘(x) ‘GREEN BANKING’ CENTERS.— 
‘‘(1) IN GENERAL.—The Board shall prescribe 
guidelines encouraging the establishment and main-
tenance of ‘green banking’ centers by insured credit 
unions to provide any member who seeks informa-
tion on obtaining a mortgage, home improvement 
loan, home equity loan, or renewable energy lease 
with additional information on— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00662
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
663 
HR 2454 PCS
‘‘(A) obtaining an home energy rating or 
audit for the residence for which such mortgage 
or loan is sought; 
‘‘(B) obtaining financing for cost-effective 
energy-saving improvements to such property; 
and 
‘‘(C) obtaining beneficial terms for any 
mortgage or loan, or qualifying for a larger 
mortgage or loan, secured by a residence which 
meets or will meet energy efficiency standards. 
‘‘(2) INFORMATION AND REFERRALS.—The in-
formation made available to members under para-
graph (1) may include— 
‘‘(A) information on obtaining a home en-
ergy rating and contact information on quali-
fied energy raters in the area of the residence; 
‘‘(B) information on the secondary market 
guidelines that permit lenders to provide more 
favorable terms by allowing lenders to increase 
the ratio on debt-to-income requirements or to 
use the projected utility savings as a compen-
sating factor; 
‘‘(C) information including eligibility infor-
mation about, and contact information for, any 
conservation or renewable energy programs, 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00663
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
664 
HR 2454 PCS
grants, or loans offered by the Secretary of 
Housing and Urban Development, including the 
Energy Efficient Mortgage Program; 
‘‘(D) information including eligibility infor-
mation about, and contact information for, any 
conservation or renewable energy programs, 
grants, or loans offered for qualified military 
personal, reservists, and veterans by the Sec-
retary of Veterans Affairs; 
‘‘(E) information about, and contact infor-
mation for, the Office of Efficiency and Renew-
able Energy at the Department of Energy, in-
cluding the weatherization assistance program; 
‘‘(F) information from, and contact infor-
mation for, the Federal Citizen Information 
Center of the General Services Administration 
on energy-efficient mortgages and loans, home 
energy rating systems, and the availability of 
energy-efficient mortgage information from a 
variety of Federal agencies; and 
‘‘(G) such other information as the Board 
or the insured credit union may determine to be 
appropriate or useful.’’. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00664
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
665 
HR 2454 PCS
SEC. 299F. GAO REPORTS ON AVAILABILITY OF AFFORD-
ABLE MORTGAGES. 
(a) STUDY.—The Comptroller General of the United 
States shall periodically, as necessary to comply with sub-
section (b), examine the impact of this subtitle and the 
amendments made by this subtitle on the availability of 
affordable mortgages in various areas throughout the 
United States, including cities having older infrastructure 
and limited space for the development of new housing. 
(b) TRIENNIAL REPORTS.—The Comptroller General 
shall submit a report once every 3 years to the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate that shall include— 
(1) a detailed statement of the most recent 
findings pursuant to subsection (a); and 
(2) if the Comptroller General finds that this 
subtitle or the amendments made by this subtitle 
have directly or indirectly resulted in consequences 
that limit the availability or affordability of mort-
gages in any area or areas within the United States, 
including any city having older infrastructure and 
limited space for the development of new housing, 
any recommendations for any additional actions at 
the Federal, State, or local levels that the Comp-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00665
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
666 
HR 2454 PCS
troller General considers necessary or appropriate to 
mitigate such effects. 
The first report under this subsection shall be submitted 
not later than the expiration of the 3-year period begin-
ning on the date of the enactment of this Act. 
SEC. 299G. PUBLIC HOUSING ENERGY COST REPORT. 
(a) COLLECTION OF INFORMATION BY HUD.—The 
Secretary of Housing and Urban Development shall obtain 
from each public housing agency, by such time as may 
be necessary to comply with the reporting requirement 
under subsection (b), information regarding the energy 
costs for public housing administered or operated by the 
agency. For each public housing agency, such information 
shall include the monthly energy costs associated with 
each separate building and development of the agency, for 
the most recently completed 12-month period for which 
such information is available, and such other information 
as the Secretary determines is appropriate in determining 
which public housing buildings and developments are most 
in need of repairs and improvements to reduce energy 
needs and costs and become more energy efficient. 
(b) REPORT.—Not later than the expiration of the 
12-month period beginning on the date of the enactment 
of this Act, the Secretary of Housing and Urban Develop-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00666
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
667 
HR 2454 PCS
ment shall submit a report to the Congress setting forth 
the information collected pursuant to subsection (a). 
SEC. 299H. SECONDARY MARKET FOR RESIDENTIAL RE-
NEWABLE ENERGY LEASE INSTRUMENTS. 
(a) PURPOSES.—The purposes of this section are— 
(1) to encourage residential use of renewable 
energy systems by minimizing up-front costs and 
providing immediate utility cost savings to con-
sumers through leasing of such systems to home-
owners; 
(2) to reduce carbon emissions and the use of 
nonrenewable resources; 
(3) to encourage energy-efficient residential 
construction and rehabilitation; 
(4) to encourage the use of renewable resources 
by homeowners; 
(5) to minimize the impact of development on 
the environment; 
(6) to reduce consumer utility costs; and 
(7) to encourage private investment in the 
green economy. 
(b) RESIDUAL VALUE
OF RENEWABLE ENERGY 
ASSET.—The Secretary of Housing and Urban Develop-
ment shall establish a means of determining the residual 
value of a renewable energy asset such that a secondary 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00667
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
668 
HR 2454 PCS
market for residential renewable energy lease instruments 
may be facilitated. Such means may include, without limi-
tation, the calculation of residual value based on the net 
present value of projected future energy production of the 
renewable energy asset. 
SEC. 299I. GREEN GUARANTEES. 
(a) AUTHORITY TO GUARANTEE ‘‘GREEN PORTION’’ 
OF ELIGIBLE MORTGAGES.— 
(1) IN GENERAL.—The Secretary of Housing 
and Urban Development may make commitments to 
guarantee under this section and may guarantee, the 
repayment of the portions of the principal obliga-
tions of eligible mortgages that are used to finance 
eligible sustainable building elements for the housing 
that is subject to the mortgage. 
(2) AMOUNT
OF
GUARANTEE.—A guarantee 
under this section by the Secretary in connection 
with an eligible mortgage shall not exceed a percent-
age of the green portion (as such term is defined in 
subsection (g)) of the mortgage, as shall be estab-
lished by the Secretary and may be established on 
a regional basis as the Secretary determines appro-
priate. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00668
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
669 
HR 2454 PCS
(b) ELIGIBLE MORTGAGES.—To be considered an eli-
gible mortgage for purposes of this section, a mortgage 
shall comply with all of the following requirements: 
(1) ACQUISITION OR CONSTRUCTION OF HOUS-
ING.—The mortgage shall be made for the acquisi-
tion or construction of single- or multifamily housing 
and repayment of the mortgage shall be secured by 
an interest in such housing. 
(2) FINANCING
OF
ELIGIBLE
SUSTAINABLE 
BUILDING ELEMENTS THROUGH GREEN PORTION OF 
MORTGAGE.—A portion of the principal obligation of 
the mortgage, which meets the requirements under 
subsection (c), shall be used only for financing the 
provision of eligible sustainable building elements for 
the housing for which the mortgage was made. 
(3) MAXIMUM MORTGAGE AMOUNT.—The prin-
cipal obligation of the mortgage (including the eligi-
ble portion of such mortgage, and such initial service 
charges, appraisal, inspection, and other fees as the 
Secretary shall approve) may not exceed the fol-
lowing amounts: 
(A) SINGLE-FAMILY HOUSING.—Such dol-
lar amounts for single-family housing as the 
Secretary shall establish, which may be estab-
lished on the basis of the number of dwelling 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00669
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
670 
HR 2454 PCS
units in the housing, as the Secretary considers 
appropriate. 
(B) MULTIFAMILY HOUSING.—Such dollar 
amounts for multifamily housing as the Sec-
retary shall establish, which may be established 
on the basis of the number of dwelling units in 
the housing and the number of bedrooms in 
such dwelling units, as the Secretary considers 
appropriate. 
(4) REPAYMENT.—The mortgage meets such 
requirements as the Secretary shall establish to en-
sure that there is a reasonable prospect of repay-
ment of the principal and interest on the obligation 
by the mortgagor. 
(5) MORTGAGE
TERMS.—The mortgage shall 
meet such requirements with respect to loan-to-value 
ratio, mortgagor credit scores, debt-to-income ratio, 
and other underwriting standards, term to maturity, 
interest rates and amortization, including amortiza-
tion of the green portion of the mortgage, and other 
mortgage terms as the Secretary shall establish. 
(c) LIMITATIONS ON GREEN PORTION OF MORT-
GAGE.—The requirements under this subsection with re-
spect to the green portion of an eligible mortgage are as 
follows: 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00670
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
671 
HR 2454 PCS
(1) PERCENTAGE
LIMITATION.—Such portion 
shall not exceed, in the case of single-family or mul-
tifamily housing, 10 percent of the total principal 
obligation of the mortgage. 
(2) DOLLAR AMOUNT LIMITATION.—Such por-
tion shall not exceed— 
(A) in the case of single-family housing, 
such maximum dollar amount limitation as the 
Secretary shall establish, which may be estab-
lished on the basis of the number of dwelling 
units in the housing, as the Secretary considers 
appropriate; and 
(B) in the case of multifamily housing, 
such maximum dollar amount limitation as the 
Secretary shall establish, which limitation may 
be established on the basis of the number of 
dwelling units in the housing and the number 
of bedrooms in such dwelling units, as the Sec-
retary considers appropriate. 
(3) COST-EFFECTIVENESS
LIMITATION.—Such 
portion shall not exceed the total present value of 
the savings (as determined in accordance with sub-
section (d)) attributable to the incorporation of the 
eligible sustainable building elements to be financed 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00671
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
672 
HR 2454 PCS
with the green portion of the mortgage that are to 
be realized over the useful life of such elements. 
(d) 
ELIGIBLE
SUSTAINABLE
BUILDING
ELE-
MENTS.—The Secretary may not guarantee any eligible 
mortgage under this section unless the mortgagor has 
demonstrated, in accordance with such requirements as 
the Secretary shall establish, the amount of savings attrib-
utable to incorporation of the sustainable building ele-
ments to be financed with the green portion of the mort-
gage, as measured by the National Green Building Stand-
ard for all residential construction developed by the Na-
tional Association of Home Builders and the U.S. Green 
Building Council, and approved by the American National 
Standards Institute, as updated and in effect at the time 
of such demonstration. 
(e) GUARANTEE FEE.— 
(1) ASSESSMENT AND COLLECTION.—The Sec-
retary shall assess and collect fees for guarantees 
under this section in amounts that the Secretary de-
termines are sufficient to cover the costs (as such 
term is defined in section 502 of the Federal Credit 
Reform Act of 1990 (2 U.S.C. 661a)) of such guar-
antees. 
(2) AVAILABILITY.—Fees collected under this 
subsection shall be deposited by the Secretary in the 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00672
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
673 
HR 2454 PCS
Treasury of the United States and shall remain 
available until expended, subject to such other condi-
tions as are contained in annual appropriations Acts. 
(f) PAYMENT OF GUARANTEE.— 
(1) DEFAULT.— 
(A) RIGHT TO PAYMENT.—If a mortgagor 
under a mortgage guaranteed under this section 
defaults (as defined in regulations issued by the 
Secretary and specified in the guarantee con-
tract) on the obligation under the mortgage— 
(i) the holder of the guarantee shall 
have the right to demand payment of the 
unpaid amount of the guaranteed portion 
of the mortgage, to the extent provided 
under subsection (a)(2), from the Sec-
retary; and 
(ii) within such period as may be 
specified in the guarantee or related agree-
ments, the Secretary shall pay to the hold-
er of the guarantee, to the extent provided 
under subsection (a)(2), the unpaid inter-
est on, and unpaid principal of the portion 
of guaranteed portion of the mortgage with 
respect to which the borrower has de-
faulted, unless the Secretary finds that 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00673
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
674 
HR 2454 PCS
there was no default by the borrower in 
the payment of interest or principal or that 
the default has been remedied. 
(B) FORBEARANCE.—Nothing in this para-
graph precludes any forbearance by the holder 
of an eligible mortgage for the benefit of the 
mortgagor which may be agreed upon by the 
parties to the mortgage and approved by the 
Secretary. 
(2) SUBROGATION.— 
(A) IN GENERAL.—If the Secretary makes 
a payment under paragraph (1), the Secretary 
shall be subrogated to the rights of the recipi-
ent of the payment as specified in the guar-
antee or related agreements including, if appro-
priate, the authority (notwithstanding any other 
provision of law)— 
(i) to complete, maintain, operate, 
lease, or otherwise dispose of any property 
acquired pursuant to such guarantee or re-
lated agreements; or 
(ii) to permit the mortgagor, pursuant 
to an agreement with the Secretary, to 
continue to occupy the property subject to 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00674
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
675 
HR 2454 PCS
the mortgage, if the Secretary determines 
such occupancy to be appropriate. 
(B) SUPERIORITY OF RIGHTS.—The rights 
of the Secretary, with respect to any property 
acquired pursuant to a guarantee or related 
agreements, shall be superior to the rights of 
any other person with respect to the property. 
(C) TERMS
AND
CONDITIONS.—A guar-
antee agreement shall include such detailed 
terms and conditions as the Secretary deter-
mines appropriate to protect the interests of the 
United States in the case of default. 
(3) FULL FAITH AND CREDIT.—The full faith 
and credit of the United States is pledged to the 
payment of all guarantees issued under this section 
with respect to principal and interest. 
(g) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) ELIGIBLE MORTGAGE.—The term ‘‘eligible 
mortgage’’ means a mortgage that meets the re-
quirements under subsection (b). 
(2) GREEN PORTION.—The term ‘‘green por-
tion’’ means, with respect to an eligible mortgage, 
the portion of the mortgage principal referred to in 
subsection (b)(2) that is attributable, as determined 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00675
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
676 
HR 2454 PCS
in accordance with regulations issued by the Sec-
retary, to the increased costs incurred in financing 
provision of sustainable building elements for the 
housing for which the mortgage was made, as com-
pared to the costs that would have been incurred in 
financing the provision of other building elements 
for the housing for the same purposes that are com-
monly or conventionally used but are not sustainable 
building elements. 
(3) GUARANTEED PORTION.—The term ‘‘guar-
anteed portion’’ means, with respect to an eligible 
mortgage guaranteed under this section, the green 
portion of the mortgage that is so guaranteed. 
(4) MORTGAGE.—The term ‘‘mortgage’’ has the 
meaning given such term in section 201 of the Na-
tional Housing Act (12 U.S.C. 1707). 
(5) MULTIFAMILY HOUSING.—The term ‘‘multi-
family housing’’ means a residential property con-
sisting of five or more dwelling units. 
(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(7) SINGLE-FAMILY HOUSING.—The term ‘‘sin-
gle-family housing’’ means a residential property 
consisting of one to four dwelling units. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00676
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
677 
HR 2454 PCS
(8) SUSTAINABLE
BUILDING
ELEMENT.—The 
term ‘‘sustainable building element’’ means such 
building elements, as the Secretary shall define, that 
have energy efficiency or environmental sustain-
ability qualities that are superior to such qualities 
for other building elements for the same purposes 
that are commonly or conventionally used. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated for costs (as such term is 
defined in section 502 of the Federal Credit Reform Act 
of 1990 (2 U.S.C. 661a) of guarantees under this section 
$500,000,000 for each of fiscal years 2010 through 2014. 
(i) REGULATIONS.—The Secretary shall issue any 
regulations necessary to carry out this section. 
TITLE III—REDUCING GLOBAL 
WARMING POLLUTION 
SEC. 301. SHORT TITLE. 
This title, and sections 112, 116, 221, 222, 223, and 
401 of this Act, and the amendments made by this title 
and those sections, may be cited as the ‘‘Safe Climate 
Act’’. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00677
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
678 
HR 2454 PCS
Subtitle A—Reducing Global 
Warming Pollution 
SEC. 311. REDUCING GLOBAL WARMING POLLUTION. 
The Clean Air Act (42 U.S.C. and following) is 
amended by adding after title VI the following new title: 
‘‘TITLE VII—GLOBAL WARMING 
POLLUTION REDUCTION PRO-
GRAM 
‘‘PART A—GLOBAL WARMING POLLUTION 
REDUCTION GOALS AND TARGETS 
‘‘SEC. 701. FINDINGS AND PURPOSE. 
‘‘(a) FINDINGS.—The Congress finds as follows: 
‘‘(1) Global warming poses a significant threat 
to the national security, economy, public health and 
welfare, and environment of the United States, as 
well as of other nations. 
‘‘(2) Reviews of scientific studies, including by 
the Intergovernmental Panel on Climate Change and 
the National Academy of Sciences, demonstrate that 
global warming is the result of the combined anthro-
pogenic greenhouse gas emissions from numerous 
sources of all types and sizes. Each increment of 
emission, when combined with other emissions, 
causes or contributes materially to the acceleration 
and extent of global warming and its adverse effects 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00678
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
679 
HR 2454 PCS
for the lifetime of such gas in the atmosphere. Ac-
cordingly, controlling emissions in small as well as 
large amounts is essential to prevent, slow the pace 
of, reduce the threats from, and mitigate global 
warming and its adverse effects. 
‘‘(3) Because they induce global warming, 
greenhouse gas emissions cause or contribute to in-
juries to persons in the United States, including— 
‘‘(A) adverse health effects such as disease 
and loss of life; 
‘‘(B) displacement of human populations; 
‘‘(C) damage to property and other inter-
ests related to ocean levels, acidification, and 
ice changes; 
‘‘(D) severe weather and seasonal changes; 
‘‘(E) disruption, costs, and losses to busi-
ness, trade, employment, farms, subsistence, 
aesthetic enjoyment of the environment, recre-
ation, culture, and tourism; 
‘‘(F) damage to plants, forests, lands, and 
waters; 
‘‘(G) harm to wildlife and habitat; 
‘‘(H) scarcity of water and the decreased 
abundance of other natural resources; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00679
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
680 
HR 2454 PCS
‘‘(I) worsening of tropospheric air pollu-
tion; 
‘‘(J) substantial threats of similar damage; 
and 
‘‘(K) other harm. 
‘‘(4) That many of these effects and risks of fu-
ture effects of global warming are widely shared 
does not minimize the adverse effects individual per-
sons have suffered, will suffer, and are at risk of 
suffering because of global warming. 
‘‘(5) That some of the adverse and potentially 
catastrophic effects of global warming are at risk of 
occurring and not a certainty does not negate the 
harm persons suffer from actions that increase the 
likelihood, extent, and severity of such future im-
pacts. 
‘‘(6) Nations of the world look to the United 
States for leadership in addressing the threat of and 
harm from global warming. Full implementation of 
the Safe Climate Act is critical to engage other na-
tions in an international effort to mitigate the threat 
of and harm from global warming. 
‘‘(7) Global warming and its adverse effects are 
occurring and are likely to continue and increase in 
magnitude, and to do so at a greater and more 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00680
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
681 
HR 2454 PCS
harmful rate, unless the Safe Climate Act is fully 
implemented and enforced in an expeditious manner. 
‘‘(b) PURPOSE.—It is the general purpose of the Safe 
Climate Act to help prevent, reduce the pace of, mitigate, 
and remedy global warming and its adverse effects. To ful-
fill such purpose, it is necessary to— 
‘‘(1) require the timely fulfillment of all govern-
mental acts and duties, both substantive and proce-
dural, and the prompt compliance of covered entities 
with the requirements of the Safe Climate Act; 
‘‘(2) establish and maintain an effective, trans-
parent, and fair market for emission allowances and 
preserve the integrity of the cap on emissions and of 
offset credits; 
‘‘(3) advance the production and deployment of 
clean energy and energy efficiency technologies; and 
‘‘(4) ensure effective enforcement of the Safe 
Climate Act by citizens, States, Indian tribes, and 
all levels of government because each violation of the 
Safe Climate Act is likely to result in an additional 
increment of greenhouse gas emission and will slow 
the pace of implementation of the Safe Climate Act 
and delay the achievement of the goals set forth in 
section 702, and cause or contribute to global warm-
ing and its adverse effects. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00681
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
682 
HR 2454 PCS
‘‘SEC. 702. ECONOMY-WIDE REDUCTION GOALS. 
‘‘The goals of the Safe Climate Act are to reduce 
steadily the quantity of United States greenhouse gas 
emissions such that— 
‘‘(1) in 2012, the quantity of United States 
greenhouse gas emissions does not exceed 97 percent 
of the quantity of United States greenhouse gas 
emissions in 2005; 
‘‘(2) in 2020, the quantity of United States 
greenhouse gas emissions does not exceed 80 percent 
of the quantity of United States greenhouse gas 
emissions in 2005; 
‘‘(3) in 2030, the quantity of United States 
greenhouse gas emissions does not exceed 58 percent 
of the quantity of United States greenhouse gas 
emissions in 2005; and 
‘‘(4) in 2050, the quantity of United States 
greenhouse gas emissions does not exceed 17 percent 
of the quantity of United States greenhouse gas 
emissions in 2005. 
‘‘SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES. 
‘‘(a) IN GENERAL.—The regulations issued under 
section 721 shall cap and reduce annually the greenhouse 
gas emissions of capped sources each calendar year begin-
ning in 2012 such that— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00682
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
683 
HR 2454 PCS
‘‘(1) in 2012, the quantity of greenhouse gas 
emissions from capped sources does not exceed 97 
percent of the quantity of greenhouse gas emissions 
from such sources in 2005; 
‘‘(2) in 2020, the quantity of greenhouse gas 
emissions from capped sources does not exceed 83 
percent of the quantity of greenhouse gas emissions 
from such sources in 2005; 
‘‘(3) in 2030, the quantity of greenhouse gas 
emissions from capped sources does not exceed 58 
percent of the quantity of greenhouse gas emissions 
from such sources in 2005; and 
‘‘(4) in 2050, the quantity of greenhouse gas 
emissions from capped sources does not exceed 17 
percent of the quantity of greenhouse gas emissions 
from such sources in 2005. 
‘‘(b) DEFINITION.—For purposes of this section, the 
term ‘greenhouse gas emissions from such sources in 
2005’ means emissions to which section 722 would have 
applied if the requirements of this title for the specified 
year had been in effect for 2005. 
‘‘SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS. 
‘‘For the purposes of decreasing the likelihood of cat-
astrophic climate change, preserving tropical forests, 
building capacity to generate offset credits, and facili-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00683
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
684 
HR 2454 PCS
tating international action on global warming, the Admin-
istrator shall set aside the percentage specified in section 
781 of the quantity of emission allowances established 
under section 721(a) for each year, to be used to achieve 
a reduction of greenhouse gas emissions from deforest-
ation in developing countries in accordance with part E. 
In 2020, activities supported under part E shall provide 
greenhouse gas reductions in an amount equal to an addi-
tional 10 percentage points of reductions from United 
States greenhouse gas emissions in 2005. The Adminis-
trator shall distribute these allowances with respect to ac-
tivities in countries that enter into and implement agree-
ments or arrangements relating to reduced deforestation 
as described in section 754(a)(2). 
‘‘SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS. 
‘‘(a) IN GENERAL.—The Administrator shall, in con-
sultation with appropriate Federal agencies, submit to 
Congress a report not later than July 1, 2013, and every 
4 years thereafter, that includes— 
‘‘(1) an analysis of key findings based on the 
latest scientific information and data relevant to 
global climate change; 
‘‘(2) an analysis of capabilities to monitor and 
verify greenhouse gas reductions on a worldwide 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00684
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
685 
HR 2454 PCS
basis, including for the United States, as required 
under the Safe Climate Act; and 
‘‘(3) an analysis of the status of worldwide 
greenhouse gas reduction efforts, including imple-
mentation of the Safe Climate Act and other poli-
cies, both domestic and international, for reducing 
greenhouse gas emissions, preventing dangerous at-
mospheric concentrations of greenhouse gases, pre-
venting significant irreversible consequences of cli-
mate change, and reducing vulnerability to the im-
pacts of climate change. 
‘‘(b) EXCEPTION.—Paragraph (3) of subsection (a) 
shall not apply to the first report submitted under such 
subsection. 
‘‘(c) LATEST SCIENTIFIC INFORMATION.—The anal-
ysis required under subsection (a)(1) shall— 
‘‘(1) address existing scientific information and 
reports, considering, to the greatest extent possible, 
the most recent assessment report of the Intergov-
ernmental Panel on Climate Change, reports by the 
United States Global Change Research Program, the 
Natural Resources Climate Change Adaptation 
Panel established under section 475 of the American 
Clean Energy and Security Act of 2009, and Fed-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00685
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
686 
HR 2454 PCS
eral agencies, and the European Union’s global tem-
perature data assessment; and 
‘‘(2) review trends and projections for— 
‘‘(A) global and country-specific annual 
emissions of greenhouse gases, and cumulative 
greenhouse gas emissions produced between 
1850 and the present, including— 
‘‘(i) global cumulative emissions of an-
thropogenic greenhouse gases; 
‘‘(ii) global annual emissions of an-
thropogenic greenhouse gases; and 
‘‘(iii) by country, annual total, annual 
per capita, and cumulative anthropogenic 
emissions of greenhouse gases for the top 
50 emitting nations; 
‘‘(B) significant changes, both globally and 
by region, in annual net non-anthropogenic 
greenhouse gas emissions from natural sources, 
including permafrost, forests, or oceans; 
‘‘(C) global atmospheric concentrations of 
greenhouse gases, expressed in annual con-
centration units as well as carbon dioxide 
equivalents based on 100-year global warming 
potentials; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00686
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
687 
HR 2454 PCS
‘‘(D) major climate forcing factors, such as 
aerosols; 
‘‘(E) global average temperature, expressed 
as seasonal and annual averages in land, ocean, 
and land-plus-ocean averages; and 
‘‘(F) sea level rise; 
‘‘(3) assess the current and potential impacts of 
global climate change on— 
‘‘(A) human populations, including impacts 
on public health, economic livelihoods, subsist-
ence, human infrastructure, and displacement 
or permanent relocation due to flooding, severe 
weather, extended drought, erosion, or other 
ecosystem changes; 
‘‘(B) freshwater systems, including water 
resources for human consumption and agri-
culture and natural and managed ecosystems, 
flood and drought risks, and relative humidity; 
‘‘(C) the carbon cycle, including impacts 
related to the thawing of permafrost, the fre-
quency and intensity of wildfire, and terrestrial 
and ocean carbon sinks; 
‘‘(D) ecosystems and animal and plant 
populations, including impacts on species abun-
dance, phenology, and distribution; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00687
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
688 
HR 2454 PCS
‘‘(E) oceans and ocean ecosystems, includ-
ing effects on sea level, ocean acidity, ocean 
temperatures, coral reefs, ocean circulation, 
fisheries, and other indicators of ocean eco-
system health; 
‘‘(F) the cryosphere, including effects on 
ice sheet mass balance, mountain glacier mass 
balance, and sea-ice extent and volume; 
‘‘(G) changes in the intensity, frequency, 
or distribution of severe weather events, includ-
ing precipitation, tropical cyclones, tornadoes, 
and severe heat waves; 
‘‘(H) agriculture and forest systems; and 
‘‘(I) any other indicators the Administrator 
deems appropriate; 
‘‘(4) summarize any significant socio-economic 
impacts of climate change in the United States, in-
cluding the territories of the United States, drawing 
on work by Federal agencies and the academic lit-
erature, including impacts on— 
‘‘(A) public health; 
‘‘(B) economic livelihoods and subsistence; 
‘‘(C) displacement or permanent relocation 
due to flooding, severe weather, extended 
drought, erosion, or other ecosystem changes; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00688
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
689 
HR 2454 PCS
‘‘(D) 
human 
infrastructure, 
including 
coastal infrastructure vulnerability to extreme 
events and sea level rise, river floodplain infra-
structure, and sewer and water management 
systems; 
‘‘(E) agriculture and forests, including ef-
fects on potential growing season, distribution, 
and yield; 
‘‘(F) water resources for human consump-
tion, agriculture and natural and managed eco-
systems, flood and drought risks, and relative 
humidity; 
‘‘(G) energy supply and use; and 
‘‘(H) transportation; 
‘‘(5) in assessing risks and impacts, use a risk 
management framework, including both qualitative 
and quantitative measures, to assess the observed 
and projected impacts of current and future climate 
change, accounting for— 
‘‘(A) both monetized and non-monetized 
losses; 
‘‘(B) potential nonlinear, abrupt, or essen-
tially irreversible changes in the climate system; 
‘‘(C) potential nonlinear increases in the 
cost of impacts; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00689
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
690 
HR 2454 PCS
‘‘(D) potential low-probability, high impact 
events; and 
‘‘(E) whether impacts are transitory or es-
sentially permanent; and 
‘‘(6) based on the findings of the Administrator 
under this section, as well as assessments produced 
by the Intergovernmental Panel on Climate Change, 
the United States Global Change Research program, 
and other relevant scientific entities— 
‘‘(A) describe increased risks to natural 
systems and society that would result from an 
increase in global average temperature 3.6 de-
grees Fahrenheit (2 degrees Celsius) above the 
pre-industrial average or an increase in atmos-
pheric greenhouse gas concentrations above 450 
parts per million carbon dioxide equivalent; and 
‘‘(B) identify and assess— 
‘‘(i) significant residual risks not 
avoided by the thresholds described in sub-
paragraph (A); 
‘‘(ii) alternative thresholds or targets 
that may more effectively limit the risks 
identified pursuant to clause (i); and 
‘‘(iii) thresholds above those described 
in subparagraph (A) which significantly in-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00690
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
691 
HR 2454 PCS
crease the risk of certain impacts or render 
them essentially permanent. 
‘‘(d) STATUS OF MONITORING AND VERIFICATION 
CAPABILITIES TO EVALUATE GREENHOUSE GAS REDUC-
TION EFFORTS.—The analysis required under subsection 
(a)(2) shall evaluate the capabilities of the monitoring, re-
porting, and verification systems used to quantify progress 
in achieving reductions in greenhouse gas emissions both 
globally and in the United States (as described in section 
702), including— 
‘‘(1) quantification of emissions and emission 
reductions by entities participating in the cap and 
trade program under this title; 
‘‘(2) quantification of emissions and emission 
reductions by entities participating in the offset pro-
gram under this title; 
‘‘(3) quantification of emission and emissions 
reductions by entities regulated by performance 
standards; 
‘‘(4) quantification of aggregate net emissions 
and emissions reductions by the United States; and 
‘‘(5) quantification of global changes in net 
emissions and in sources and sinks of greenhouse 
gases. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00691
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
692 
HR 2454 PCS
‘‘(e) STATUS OF GREENHOUSE GAS REDUCTION EF-
FORTS.—The analysis required under subsection (a)(3) 
shall address— 
‘‘(1) whether the programs under Safe Climate 
Act and other Federal statutes are resulting in suffi-
cient United States greenhouse gas emissions reduc-
tions to meet the emissions reduction goals described 
in section 702, taking into account the use of off-
sets; and 
‘‘(2) whether United States actions, taking into 
account international actions, commitments, and 
trends, and considering the range of plausible emis-
sions scenarios, are sufficient to avoid— 
‘‘(A) atmospheric greenhouse gas con-
centrations above 450 parts per million carbon 
dioxide equivalent; 
‘‘(B) global average surface temperature 
3.6 degrees Fahrenheit (2 degrees Celsius) 
above the pre-industrial average, or such other 
temperature thresholds as the Administrator 
deems appropriate; and 
‘‘(C) other temperature or greenhouse gas 
thresholds identified pursuant to subsection 
(c)(6)(B). 
‘‘(f) RECOMMENDATIONS.— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00692
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
693 
HR 2454 PCS
‘‘(1) 
LATEST
SCIENTIFIC
INFORMATION.— 
Based on the analysis described in subsection (a)(1), 
each report under subsection (a) shall identify ac-
tions that could be taken to— 
‘‘(A) improve the characterization of 
changes in the earth-climate system and im-
pacts of global climate change; 
‘‘(B) better inform decision making and 
actions related to global climate change; 
‘‘(C) mitigate risks to natural and social 
systems; and 
‘‘(D) design policies to better account for 
climate risks. 
‘‘(2) 
MONITORING, 
REPORTING
AND 
VERIFICATION.—Based on the analysis described in 
subsection (a)(2), each report under subsection (a) 
shall identify key gaps in measurement, reporting, 
and verification capabilities and make recommenda-
tions to improve the accuracy and reliability of those 
capabilities. 
‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION 
EFFORTS.—Based on the analysis described in sub-
section (a)(3), taking into account international ac-
tions, commitments, and trends, and considering the 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00693
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
694 
HR 2454 PCS
range of plausible emissions scenarios, each report 
under subsection (a) shall identify— 
‘‘(A) the quantity of additional reductions 
required to meet the emissions reduction goals 
in section 702; 
‘‘(B) the quantity of additional reductions 
in global greenhouse gas emissions needed to 
avoid 
the 
concentration 
and 
temperature 
thresholds identified in subsection (e); and 
‘‘(C) possible strategies and approaches for 
achieving additional reductions. 
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary. 
‘‘SEC. 706. NATIONAL ACADEMY REVIEW. 
‘‘(a) IN GENERAL.—Not later than 1 year after the 
date of enactment of this title, the Administrator shall 
offer to enter into a contract with the National Academy 
of Sciences (in this section referred to as the ‘Academy’) 
under which the Academy shall, not later than July 1, 
2014, and every 4 years thereafter, submit to Congress 
and the Administrator a report that includes— 
‘‘(1) a review of the most recent report and rec-
ommendations issued under section 705; and 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00694
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
695 
HR 2454 PCS
‘‘(2) an analysis of technologies to achieve re-
ductions in greenhouse gas emissions. 
‘‘(b) FAILURE TO ISSUE A REPORT.—In the event 
that the Administrator has not issued all or part of the 
most recent report required under section 705, the Acad-
emy shall conduct its own review and analysis of the re-
quired information. 
‘‘(c) TECHNOLOGICAL INFORMATION.—The analysis 
required under subsection (a)(2) shall— 
‘‘(1) review existing technological information 
and reports, including the most recent reports by the 
Department of Energy, the United States Global 
Change Research Program, the Intergovernmental 
Panel on Climate Change, and the International En-
ergy Agency and any other relevant information on 
technologies or practices that reduce or limit green-
house gas emissions; 
‘‘(2) include the participation of technical ex-
perts from relevant private industry sectors; 
‘‘(3) review the current and future projected de-
ployment of technologies and practices in the United 
States that reduce or limit greenhouse gas emis-
sions, including— 
‘‘(A) technologies for capture and seques-
tration of greenhouse gases; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00695
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
696 
HR 2454 PCS
‘‘(B) technologies to improve energy effi-
ciency; 
‘‘(C) low- or zero-greenhouse gas emitting 
energy technologies; 
‘‘(D) low- or zero-greenhouse gas emitting 
fuels; 
‘‘(E) biological sequestration practices and 
technologies; and 
‘‘(F) any other technologies the Academy 
deems relevant; and 
‘‘(4) review and compare the emissions reduc-
tion potential, commercial viability, market penetra-
tion, investment trends, and deployment of the tech-
nologies described in paragraph (3), including— 
‘‘(A) the need for additional research and 
development, including publicly funded research 
and development; 
‘‘(B) the extent of commercial deployment, 
including, where appropriate, a comparison to 
the cost and level of deployment of conventional 
fossil fuel-fired energy technologies and devices; 
and 
‘‘(C) an evaluation of any substantial tech-
nological, legal, or market-based barriers to 
commercial deployment. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00696
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
697 
HR 2454 PCS
‘‘(d) RECOMMENDATIONS.— 
‘‘(1) 
LATEST
SCIENTIFIC
INFORMATION.— 
Based on the review described in subsection (a)(1), 
the Academy shall identify actions that could be 
taken to— 
‘‘(A) improve the characterization of 
changes in the earth-climate system and im-
pacts of global climate change; 
‘‘(B) better inform decision making and 
actions related to global climate change; 
‘‘(C) mitigate risks to natural and social 
systems; 
‘‘(D) design policies to better account for 
climate risks; and 
‘‘(E) improve the accuracy and reliability 
of capabilities to monitor, report, and verify 
greenhouse gas emissions reduction efforts. 
‘‘(2) TECHNOLOGICAL
INFORMATION.—Based 
on the analysis described in subsection (a)(2), the 
Academy shall identify— 
‘‘(A) additional emissions reductions that 
may be possible as a result of technologies de-
scribed in the analysis; 
‘‘(B) barriers to the deployment of such 
technologies; and 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00697
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
698 
HR 2454 PCS
‘‘(C) actions that could be taken to speed 
deployment of such technologies. 
‘‘(3) STATUS OF GREENHOUSE GAS REDUCTION 
EFFORTS.—Based on the review described in sub-
section (a)(1), the Academy shall identify— 
‘‘(A) the quantity of additional reductions 
required to meet the emissions reduction goals 
described in section 702; and 
‘‘(B) the quantity of additional reductions 
in global greenhouse gas emissions needed to 
avoid 
the 
concentration 
and 
temperature 
thresholds described in section 705(c)(6)(A) or 
identified pursuant to section 705(c)(6)(B). 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary. 
‘‘SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDA-
TIONS. 
‘‘(a) AGENCY ACTIONS.—The President shall direct 
relevant Federal agencies to use existing statutory author-
ity to take appropriate actions identified in the reports 
submitted under sections 705 and 706, and to address any 
shortfalls identified in such reports, not later than July 
1, 2015, and every 4 years thereafter. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00698
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
699 
HR 2454 PCS
‘‘(b) PLAN.—In the event that the Administrator or 
the National Academy of Sciences has concluded, in the 
most recent report submitted under section 705 or 706 
respectively, that the United States will not achieve the 
necessary domestic greenhouse gas emissions reductions, 
or that global actions will not maintain safe global average 
surface temperature and atmospheric greenhouse gas con-
centration thresholds, the President shall, not later than 
July 1, 2015, and every 4 years thereafter, submit to Con-
gress a plan identifying domestic and international actions 
that will achieve necessary additional greenhouse gas re-
ductions, including any recommendations for legislative 
action. 
‘‘PART B—DESIGNATION AND REGISTRATION OF 
GREENHOUSE GASES 
‘‘SEC. 711. DESIGNATION OF GREENHOUSE GASES. 
‘‘(a) GREENHOUSE GASES.—For purposes of this 
title, the following are greenhouse gases: 
‘‘(1) Carbon dioxide. 
‘‘(2) Methane. 
‘‘(3) Nitrous oxide. 
‘‘(4) Sulfur hexafluoride. 
‘‘(5) Hydrofluorocarbons emitted from a chem-
ical manufacturing process at an industrial sta-
tionary source. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00699
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
700 
HR 2454 PCS
‘‘(6) Any perfluorocarbon. 
‘‘(7) Nitrogen trifluoride. 
‘‘(8) Any other anthropogenic gas designated as 
a greenhouse gas by the Administrator under this 
section. 
‘‘(b) DETERMINATION ON ADMINISTRATOR’S INITIA-
TIVE.—The Administrator shall, by rule— 
‘‘(1) determine whether 1 metric ton of another 
anthropogenic gas makes the same or greater con-
tribution to global warming over 100 years as 1 met-
ric ton of carbon dioxide; 
‘‘(2) determine the carbon dioxide equivalent 
value for each gas with respect to which the Admin-
istrator makes an affirmative determination under 
paragraph (1); 
‘‘(3) for each gas with respect to which the Ad-
ministrator makes an affirmative determination 
under paragraph (1) and that is used as a substitute 
for a class I or class II substance under title VI, de-
termine the extent to which to regulate that gas 
under section 619 and specify appropriate compli-
ance obligations under section 619; 
‘‘(4) designate as a greenhouse gas for purposes 
of this title each gas for which the Administrator 
makes an affirmative determination under para-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00700
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
701 
HR 2454 PCS
graph (1), to the extent that it is not regulated 
under section 619; and 
‘‘(5) specify the appropriate compliance obliga-
tions under this title for each gas designated as a 
greenhouse gas under paragraph (4). 
‘‘(c) PETITIONS
TO DESIGNATE
A GREENHOUSE 
GAS.— 
‘‘(1) IN GENERAL.—Any person may petition 
the Administrator to designate as a greenhouse gas 
any anthropogenic gas 1 metric ton of which makes 
the same or greater contribution to global warming 
over 100 years as 1 metric ton of carbon dioxide. 
‘‘(2) CONTENTS OF PETITION.—The petitioner 
shall provide sufficient data, as specified by rule by 
the Administrator, to demonstrate that the gas is 
likely to be designated as a greenhouse gas and is 
likely to be produced, imported, used, or emitted in 
the United States. To the extent practicable, the pe-
titioner shall also identify producers, importers, dis-
tributors, users, and emitters of the gas in the 
United States. 
‘‘(3) REVIEW AND ACTION BY THE ADMINIS-
TRATOR.—Not later than 90 days after receipt of a 
petition under paragraph (2), the Administrator 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00701
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
702 
HR 2454 PCS
shall determine whether the petition is complete and 
notify the petitioner and the public of the decision. 
‘‘(4) ADDITIONAL INFORMATION.—The Admin-
istrator may require producers, importers, distribu-
tors, users, or emitters of the gas to provide infor-
mation on the contribution of the gas to global 
warming over 100 years compared to carbon dioxide. 
‘‘(5) TREATMENT OF PETITION.—For any sub-
stance used as a substitute for a class I or class II 
substance under title VI, the Administrator may 
elect to treat a petition under this subsection as a 
petition to list the substance as a class II, group II 
substance under section 619, and may require the 
petition to be amended to address listing criteria 
promulgated under that section. 
‘‘(6) DETERMINATION.—Not later than 2 years 
after receipt of a complete petition, the Adminis-
trator shall, after notice and an opportunity for com-
ment— 
‘‘(A) issue and publish in the Federal Reg-
ister— 
‘‘(i) a determination that 1 metric ton 
of the gas does not make a contribution to 
global warming over 100 years that is 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00702
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
703 
HR 2454 PCS
equal to or greater than that made by 1 
metric ton of carbon dioxide; and 
‘‘(ii) an explanation of the decision; or 
‘‘(B) determine that 1 metric ton of the 
gas makes a contribution to global warming 
over 100 years that is equal to or greater than 
that made by 1 metric ton of carbon dioxide, 
and take the actions described in subsection (b) 
with respect to such gas. 
‘‘(7) GROUNDS
FOR
DENIAL.—The Adminis-
trator may not deny a petition under this subsection 
solely on the basis of inadequate Environmental Pro-
tection Agency resources or time for review. 
‘‘(d) SCIENCE ADVISORY BOARD CONSULTATION.— 
‘‘(1) 
CONSULTATION.—The 
Administrator 
shall— 
‘‘(A) give notice to the Science Advisory 
Board prior to making a determination under 
subsection (b)(1), (c)(6), or (e)(2)(B); 
‘‘(B) consider the written recommendations 
of the Science Advisory Board under paragraph 
(2) regarding the determination; and 
‘‘(C) consult with the Science Advisory 
Board regarding such determination, including 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00703
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
704 
HR 2454 PCS
consultation subsequent to receipt of such writ-
ten recommendations. 
‘‘(2) FORMULATION OF RECOMMENDATIONS.— 
Upon receipt of notice under paragraph (1)(A) re-
garding a pending determination under subsection 
(b)(1), (c)(6), or (e)(2)(B), the Science Advisory 
Board shall— 
‘‘(A) formulate recommendations regarding 
such determination, subject to a peer review 
process; and 
‘‘(B) submit such recommendations in 
writing to the Administrator. 
‘‘(e) MANUFACTURING AND EMISSION NOTICES.— 
‘‘(1) NOTICE REQUIREMENT.— 
‘‘(A) IN GENERAL.—Effective 24 months 
after the date of enactment of this title, no per-
son may manufacture or introduce into inter-
state commerce a fluorinated gas, or emit a sig-
nificant quantity, as determined by the Admin-
istrator, of any fluorinated gas that is gen-
erated as a byproduct during the production or 
use of another fluorinated gas, unless— 
‘‘(i) the gas is designated as a green-
house gas under this section or is an 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00704
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
706 
HR 2454 PCS
tion 612, the Administrator may accept the no-
tice and information provided pursuant to that 
section as fulfilling the obligation under clause 
(iii) of subparagraph (A). 
‘‘(2) REVIEW AND ACTION BY THE ADMINIS-
TRATOR.— 
‘‘(A) COMPLETENESS.—Not later than 90 
days after receipt of notice under paragraph 
(1)(A)(iii) or (B), the Administrator shall deter-
mine whether the notice is complete. 
‘‘(B) DETERMINATION.—If the Adminis-
trator determines that the notice is complete, 
the Administrator shall, after notice and an op-
portunity for comment, not later than 12 
months after receipt of the notice— 
‘‘(i) issue and publish in the Federal 
Register— 
‘‘(I) a determination that 1 met-
ric ton of the gas does not make a 
contribution to global warming over 
100 years that is equal to or greater 
than that made by 1 metric ton of 
carbon dioxide; and 
‘‘(II) an explanation of the deci-
sion; or 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00706
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
707 
HR 2454 PCS
‘‘(ii) determine that 1 metric ton of 
the gas makes a contribution to global 
warming over 100 years that is equal to or 
greater than that made by 1 metric ton of 
carbon dioxide, and take the actions de-
scribed in subsection (b) with respect to 
such gas. 
‘‘(f) REGULATIONS.—Not later than 1 year after the 
date of enactment of this title, the Administrator shall 
promulgate regulations to carry out this section. Such reg-
ulations shall include— 
‘‘(1) requirements for the contents of a petition 
submitted under subsection (c); 
‘‘(2) requirements for the contents of a notice 
required under subsection (e); and 
‘‘(3) methods and standards for evaluating the 
carbon dioxide equivalent value of a gas. 
‘‘(g) GASES REGULATED UNDER TITLE VI.—The 
Administrator shall not designate a gas as a greenhouse 
gas under this section to the extent that the gas is regu-
lated under title VI. 
‘‘(h) SAVINGS CLAUSE.—Nothing in this section shall 
be interpreted to relieve any person from complying with 
the requirements of section 612. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00707
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
708 
HR 2454 PCS
‘‘SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF 
GREENHOUSE GASES. 
‘‘(a) MEASURE
OF QUANTITY
OF GREENHOUSE 
GASES.—Any provision of this title or title VIII that refers 
to a quantity or percentage of a quantity of greenhouse 
gases shall mean the quantity or percentage of the green-
house gases expressed in carbon dioxide equivalents. 
‘‘(b) INITIAL VALUE.—Except as provided by the Ad-
ministrator under this section or section 711— 
‘‘(1) the carbon dioxide equivalent value of 
greenhouse gases for purposes of this Act shall be as 
follows: 
‘‘CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 
GREENHOUSE GASES 
Greenhouse gas (1 metric ton) 
Carbon dioxide equivalent 
(metric tons) 
Carbon dioxide 
Methane 
Nitrous oxide 
298 
HFC-23 
14,800 
HFC-125 
3,500 
HFC-134a 
1,430 
HFC-143a 
4,470 
HFC-152a 
124 
HFC-227ea 
3,220 
HFC-236fa 
9,810 
HFC-4310mee 
1,640 
CF4 
7,390 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00708
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
709 
HR 2454 PCS
‘‘CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED 
GREENHOUSE GASES—Continued 
Greenhouse gas (1 metric ton) 
Carbon dioxide equivalent 
(metric tons) 
C2F6 
12,200 
C4F10 
8,860 
C6F14 
9,300 
SF6 
22,800 
NF3 
17,200 
; and 
‘‘(2) the carbon dioxide equivalent value for 
purposes of this Act for any greenhouse gas not list-
ed in the table under paragraph (1) shall be the 
100-year Global Warming Potentials provided in the 
Intergovernmental Panel on Climate Change Fourth 
Assessment Report. 
‘‘(c) PERIODIC REVIEW.— 
‘‘(1) Not later than February 1, 2017, and (ex-
cept as provided in paragraph (3)) not less than 
every 5 years thereafter, the Administrator shall— 
‘‘(A) review and, if appropriate, revise the 
carbon dioxide equivalent values established 
under this section or section 711(b)(2), based 
on a determination of the number of metric 
tons of carbon dioxide that makes the same 
contribution to global warming over 100 years 
as 1 metric ton of each greenhouse gas; and 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00709
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
710 
HR 2454 PCS
‘‘(B) publish in the Federal Register the 
results of that review and any revisions. 
‘‘(2) A revised determination published in the 
Federal Register under paragraph (1)(B) shall take 
effect for greenhouse gas emissions starting on Jan-
uary 1 of the first calendar year starting at least 9 
months after the date on which the revised deter-
mination was published. 
‘‘(3) The Administrator may decrease the fre-
quency of review and revision under paragraph (1) 
if the Administrator determines that such decrease 
is appropriate in order to synchronize such review 
and revision with any similar review process carried 
out pursuant to the United Nations Framework 
Convention on Climate Change, done at New York 
on May 9, 1992, or to an agreement negotiated 
under that convention, except that in no event shall 
the Administrator carry out such review and revision 
any less frequently than every 10 years. 
‘‘(d) METHODOLOGY.—In setting carbon dioxide 
equivalent values, for purposes of this section or section 
711, the Administrator shall take into account publica-
tions by the Intergovernmental Panel on Climate Change 
or a successor organization under the auspices of the 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00710
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
711 
HR 2454 PCS
United Nations Environmental Programme and the World 
Meteorological Organization. 
‘‘SEC. 713. GREENHOUSE GAS REGISTRY. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) CLIMATE REGISTRY.—The term ‘Climate 
Registry’ means the greenhouse gas emissions reg-
istry jointly established and managed by more than 
40 States and Indian tribes in 2007 to collect high- 
quality greenhouse gas emission data from facilities, 
corporations, and other organizations to support var-
ious greenhouse gas emission reporting and reduc-
tion policies for the member States and Indian 
tribes. 
‘‘(2) REPORTING ENTITY.—The term ‘reporting 
entity’ means— 
‘‘(A) a covered entity; 
‘‘(B) an entity that— 
‘‘(i) would be a covered entity if it had 
emitted, produced, imported, manufac-
tured, or delivered in 2008 or any subse-
quent year more than the applicable 
threshold level in the definition of covered 
entity in paragraph (13) of section 700; 
and 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00711
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
714 
HR 2454 PCS
‘‘(iv) the capture and sequestration of 
greenhouse gases; 
‘‘(B) require covered entities and, where 
appropriate, other reporting entities to submit 
to the Administrator data sufficient to ensure 
compliance with or implementation of the re-
quirements of this title; 
‘‘(C) require reporting of electricity deliv-
ered to facilities in an energy-intensive indus-
trial sector that meets the energy or greenhouse 
gas intensity criteria in section 764(b)(2)(A)(i); 
‘‘(D) ensure the completeness, consistency, 
transparency, accuracy, precision, and reliability 
of such data; 
‘‘(E) take into account the best practices 
from the most recent Federal, State, tribal, and 
international protocols for the measurement, ac-
counting, reporting, and verification of green-
house gas emissions, including protocols from 
the Climate Registry and other mandatory 
State or multistate authorized programs; 
‘‘(F) take into account the latest scientific 
research; 
‘‘(G) require that, for covered entities with 
respect to greenhouse gases to which section 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00714
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
715 
HR 2454 PCS
722 applies, and, to the extent determined to be 
appropriate by the Administrator, for covered 
entities with respect to other greenhouse gases 
and for other reporting entities, submitted data 
are based on— 
‘‘(i) continuous monitoring systems 
for fuel flow or emissions, such as contin-
uous emission monitoring systems; 
‘‘(ii) alternative systems that are dem-
onstrated as providing data with the same 
precision, 
reliability, 
accessibility, 
and 
timeliness, or, to the extent the Adminis-
trator determines is appropriate for report-
ing small amounts of emissions, the same 
precision, reliability, and accessibility and 
similar timeliness, as data provided by con-
tinuous monitoring systems for fuel flow or 
emissions; or 
‘‘(iii) alternative methodologies that 
are demonstrated to provide data with pre-
cision, reliability, accessibility, and timeli-
ness, or, to the extent the Administrator 
determines is appropriate for reporting 
small amounts of emissions, precision, reli-
ability, and accessibility, as similar as is 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00715
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
716 
HR 2454 PCS
technically feasible to that of data gen-
erally provided by continuous monitoring 
systems for fuel flow or emissions, if the 
Administrator determines that, with re-
spect to a reporting entity, there is no con-
tinuous monitoring system or alternative 
system described in clause (i) or (ii) that 
is technically feasible; 
‘‘(H) require that the Administrator, in de-
termining the extent to which the requirement 
to use systems or methodologies in accordance 
with subparagraph (G) is appropriate for re-
porting entities other than covered entities or 
for greenhouse gases to which section 722 does 
not apply, consider the cost of using such sys-
tems and methodologies, and of using other sys-
tems and methodologies that are available and 
suitable, for quantifying the emissions involved 
in light of the purposes of this title, including 
the goal of collecting consistent entity-wide 
data; 
‘‘(I) include methods for minimizing double 
reporting and avoiding irreconcilable double re-
porting of greenhouse gas emissions; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00716
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
717 
HR 2454 PCS
‘‘(J) establish measurement protocols for 
carbon capture and sequestration systems, tak-
ing into consideration the regulations promul-
gated under section 813; 
‘‘(K) require that reporting entities provide 
the data required under this paragraph in re-
ports submitted electronically to the Adminis-
trator, in such form and containing such infor-
mation as may be required by the Adminis-
trator; 
‘‘(L) include requirements for keeping 
records supporting or related to, and protocols 
for auditing, submitted data; 
‘‘(M) establish consistent policies for calcu-
lating carbon content and greenhouse gas emis-
sions for each type of fossil fuel with respect to 
which reporting is required; 
‘‘(N) subsequent to implementation of poli-
cies developed under subparagraph (M), provide 
for immediate dissemination, to States, Indian 
tribes, and on the Internet, of all data reported 
under this section as soon as practicable after 
electronic audit by the Administrator and any 
resulting correction of data, except that data 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00717
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
718 
HR 2454 PCS
shall not be disseminated under this subpara-
graph if— 
‘‘(i) its nondissemination is vital to 
the national security of the United States, 
as determined by the President; or 
‘‘(ii) it is confidential business infor-
mation that cannot be derived from infor-
mation that is otherwise publicly available 
and that would cause significant calculable 
competitive harm if published, except 
that— 
‘‘(I) data relating to greenhouse 
gas emissions, including any upstream 
or verification data from reporting en-
tities, shall not be considered to be 
confidential business information; and 
‘‘(II) data that is confidential 
business information shall be provided 
to a State or Indian tribe within 
whose jurisdiction the reporting entity 
is located, if the Administrator deter-
mines that such State or Indian tribe 
has in effect protections for confiden-
tial business information that are at 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00718
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
719 
HR 2454 PCS
least as protective as protections ap-
plicable to the Federal Government; 
‘‘(O) prescribe methods by which the Ad-
ministrator shall, in cases in which satisfactory 
data are not submitted to the Administrator for 
any period of time, estimate emission, produc-
tion, importation, manufacture, or delivery lev-
els— 
‘‘(i) for covered entities with respect 
to greenhouse gas emissions, production, 
importation, manufacture, or delivery regu-
lated under this title to ensure that emis-
sions, production, importation, manufac-
ture, or deliveries are not underreported, 
and to create a strong incentive for meet-
ing data monitoring and reporting require-
ments— 
‘‘(I) with a conservative estimate 
of the highest emission, production, 
importation, manufacture, or delivery 
levels that may have occurred during 
the period for which data are missing; 
or 
‘‘(II) to the extent the Adminis-
trator considers appropriate, with an 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00719
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
720 
HR 2454 PCS
estimate of such levels assuming the 
unit is emitting, producing, importing, 
manufacturing, or delivering at a 
maximum potential level during the 
period, in order to ensure that such 
levels are not underreported and to 
create a strong incentive for meeting 
data monitoring and reporting re-
quirements; and 
‘‘(ii) for covered entities with respect 
to greenhouse gas emissions to which sec-
tion 722 does not apply and for other re-
porting entities, with a reasonable estimate 
of the emission, production, importation, 
manufacture, or delivery levels that may 
have occurred during the period for which 
data are missing; 
‘‘(P) require the designation of a des-
ignated representative for each reporting entity; 
‘‘(Q) require an appropriate certification, 
by the designated representative for the report-
ing entity, of accurate and complete accounting 
of greenhouse gas emissions, as determined by 
the Administrator; and 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00720
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
721 
HR 2454 PCS
‘‘(R) include requirements for other data 
necessary for accurate and complete accounting 
of greenhouse gas emissions, as determined by 
the Administrator, including data for quality 
assurance of monitoring systems, monitors and 
other measurement devices, and other data 
needed to verify reported emissions, production, 
importation, manufacture, or delivery. 
‘‘(2) TIMING.— 
‘‘(A) CALENDAR
YEARS
2007
THROUGH 
2010.—For a base period of calendar years 
2007 through 2010, each reporting entity shall 
submit annual data required under this section 
to the Administrator not later than March 31, 
2011. The Administrator may waive or modify 
reporting requirements for calendar years 2007 
through 2010 for categories of reporting enti-
ties to the extent that the Administrator deter-
mines that the reporting entities did not keep 
data or records necessary to meet reporting re-
quirements. The Administrator may, in addition 
to or in lieu of such requirements, collect infor-
mation on energy consumption and production. 
‘‘(B) SUBSEQUENT
CALENDAR
YEARS.— 
For calendar year 2011 and each subsequent 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00721
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
722 
HR 2454 PCS
calendar year, each reporting entity shall sub-
mit quarterly data required under this section 
to the Administrator not later than 60 days 
after the end of the applicable quarter, except 
when the data is already being reported to the 
Administrator on an earlier timeframe for an-
other program. 
‘‘(3) WAIVER OF REPORTING REQUIREMENTS.— 
The Administrator may waive reporting require-
ments under this section for specific entities to the 
extent that the Administrator determines that suffi-
cient and equally or more reliable verified and timely 
data are available to the Administrator and the pub-
lic on the Internet under other mandatory statutory 
requirements. 
‘‘(4) ALTERNATIVE THRESHOLD.—The Admin-
istrator may, by rule, establish applicability thresh-
olds for reporting under this section using alter-
native metrics and levels, provided that such metrics 
and levels are easier to administer and cover the 
same size and type of sources as the threshold de-
fined in this section. 
‘‘(c) INTERRELATIONSHIP WITH OTHER SYSTEMS.— 
In developing the regulations issued under subsection (b), 
the Administrator shall take into account the work done 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00722
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
723 
HR 2454 PCS
by the Climate Registry and other mandatory State or 
multistate programs. Such regulations shall include an ex-
planation of any major differences in approach between 
the system established under the regulations and such reg-
istries and programs. 
‘‘PART C—PROGRAM RULES 
‘‘SEC. 721. EMISSION ALLOWANCES. 
‘‘(a) IN GENERAL.—The Administrator shall estab-
lish a separate quantity of emission allowances for each 
calendar year starting in 2012, in the amounts prescribed 
under subsection (e). 
‘‘(b) IDENTIFICATION
NUMBERS.—The Adminis-
trator shall assign to each emission allowance established 
under subsection (a) a unique identification number that 
includes the vintage year for that emission allowance. 
‘‘(c) LEGAL STATUS OF EMISSION ALLOWANCES.— 
‘‘(1) IN
GENERAL.—An allowance established 
by the Administrator under this title does not con-
stitute a property right, nor does any offset credit 
or other instrument established or issued under the 
American Clean Energy and Security Act of 2009, 
and the amendments made thereby, for the purpose 
of demonstrating compliance with this title. 
‘‘(2) TERMINATION OR LIMITATION.—Nothing 
in this Act or any other provision of law shall be 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00723
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
724 
HR 2454 PCS
construed to limit or alter the authority of the 
United States, including the Administrator acting 
pursuant to statutory authority, to terminate or 
limit allowances, offset credits, or term offset cred-
its. 
‘‘(3) OTHER
PROVISIONS
UNAFFECTED.—Ex-
cept as otherwise specified in this Act, nothing in 
this Act relating to allowances, offset credits, or 
term offset credits established or issued under this 
title shall affect the application of any other provi-
sion of law to a covered entity, or the responsibility 
for a covered entity to comply with any such provi-
sion of law. 
‘‘(d) SAVINGS PROVISION.—Nothing in this part shall 
be construed as requiring a change of any kind in any 
State law regulating electric utility rates and charges, or 
as affecting any State law regarding such State regula-
tion, or as limiting State regulation (including any 
prudency review) under such a State law. Nothing in this 
part shall be construed as modifying the Federal Power 
Act or as affecting the authority of the Federal Energy 
Regulatory Commission under that Act. Nothing in this 
part shall be construed to interfere with or impair any pro-
gram for competitive bidding for power supply in a State 
in which such program is established. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00724
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
725 
HR 2454 PCS
‘‘(e) ALLOWANCES FOR EACH CALENDAR YEAR.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the number of emission allowances estab-
lished by the Administrator under subsection (a) for 
each calendar year shall be as provided in the fol-
lowing table: 
‘‘Calendar year 
Emission allowances (in mil-
lions) 
2012 
4,627 
2013 
4,544 
2014 
5,099 
2015 
5,003 
2016 
5,482 
2017 
5,375 
2018 
5,269 
2019 
5,162 
2020 
5,056 
2021 
4,903 
2022 
4,751 
2023 
4,599 
2024 
4,446 
2025 
4,294 
2026 
4,142 
2027 
3,990 
2028 
3,837 
2029 
3,685 
2030 
3,533 
2031 
3,408 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00725
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
727 
HR 2454 PCS
‘‘(i) United States greenhouse gas 
emissions in 2005 were other than 7,206 
million metric tons carbon dioxide equiva-
lent; 
‘‘(ii) if the requirements of this title 
for 2012 had been in effect in 2005, sec-
tion 722 would have required emission al-
lowances to be held for other than 66.2 
percent of United States greenhouse gas 
emissions in 2005; 
‘‘(iii) if the requirements of this title 
for 2014 had been in effect in 2005, sec-
tion 722 would have required emission al-
lowances to be held for other than 75.7 
percent of United States greenhouse gas 
emissions in 2005; or 
‘‘(iv) if the requirements of this title 
for 2016 had been in effect in 2005, sec-
tion 722 would have required emission al-
lowances to be held for other than 84.5 
percent United States greenhouse gas 
emissions in 2005. 
‘‘(B) ADJUSTMENT FORMULA.— 
‘‘(i) IN
GENERAL.—If the Adminis-
trator adjusts under this paragraph the 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00727
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
728 
HR 2454 PCS
number of emission allowances established 
pursuant to paragraph (1), the number of 
emission allowances the Administrator es-
tablishes for any given calendar year shall 
equal the product of— 
‘‘(I) United States greenhouse 
gas emissions in 2005, expressed in 
tons of carbon dioxide equivalent; 
‘‘(II) the percent of United 
States greenhouse gas emissions in 
2005, expressed in tons of carbon di-
oxide equivalent, that would have been 
subject to section 722 if the require-
ments of this title for the given cal-
endar year had been in effect in 2005; 
and 
‘‘(III) the percentage set forth 
for that calendar year in section 
703(a), or determined under clause 
(ii) of this subparagraph. 
‘‘(ii) TARGETS.—In applying the por-
tion of the formula in clause (i)(III) of this 
subparagraph, for calendar years for which 
a percentage is not listed in section 703(a), 
the Administrator shall use a uniform an-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00728
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
729 
HR 2454 PCS
nual decline in the amount of emissions be-
tween the years that are specified. 
‘‘(iii) CARBON DIOXIDE EQUIVALENT 
VALUE.—If 
the 
Administrator 
adjusts 
under this paragraph the number of emis-
sion allowances established pursuant to 
paragraph (1), the Administrator shall use 
the carbon dioxide equivalent values estab-
lished pursuant to section 712. 
‘‘(iv) LIMITATION
ON
ADJUSTMENT 
TIMING.—Once a calendar year has start-
ed, the Administrator may not adjust the 
number of emission allowances to be estab-
lished for that calendar year. 
‘‘(C) LIMITATION
ON
ADJUSTMENT
AU-
THORITY.—The 
Administrator 
may 
adjust 
under this paragraph the number of emission 
allowances to be established pursuant to para-
graph (1) only once. 
‘‘(f) COMPENSATORY ALLOWANCE.— 
‘‘(1) IN
GENERAL.—The regulations promul-
gated under subsection (h) shall provide for the es-
tablishment and distribution of compensatory allow-
ances for— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00729
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
730 
HR 2454 PCS
‘‘(A) the destruction, in 2012 or later, of 
fluorinated gases that are greenhouse gases if— 
‘‘(i) allowances or offset credits were 
retired for their production or importation; 
and 
‘‘(ii) such gases are not required to be 
destroyed under any other provision of law; 
‘‘(B) the nonemissive use, in 2012 or later, 
of petroleum-based or coal-based liquid or gas-
eous fuel, petroleum coke, natural gas liquid, or 
natural gas as a feedstock, if allowances or off-
set credits were retired for the greenhouse 
gases that would have been emitted from their 
combustion; and 
‘‘(C) the conversionary use, in 2012 or 
later, of fluorinated gases in a manufacturing 
process, including semiconductor research or 
manufacturing, if allowances or offset credits 
were retired for the production or importation 
of such gas. 
‘‘(2) ESTABLISHMENT AND DISTRIBUTION.— 
‘‘(A) IN
GENERAL.—Not later than 90 
days after the end of each calendar year, the 
Administrator shall establish and distribute to 
the entity taking the actions described in sub-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00730
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
731 
HR 2454 PCS
paragraph (A), (B), or (C) of paragraph (1) a 
quantity of compensatory allowances equivalent 
to the number of tons of carbon dioxide equiva-
lent of avoided emissions achieved through such 
actions. In establishing the quantity of compen-
satory allowances, the Administrator shall take 
into account the carbon dioxide equivalent value 
of any greenhouse gas resulting from such ac-
tion. 
‘‘(B) SOURCE OF ALLOWANCES.—Compen-
satory allowances established under this sub-
section shall not be emission allowances estab-
lished under subsection (a). 
‘‘(C) 
IDENTIFICATION
NUMBERS.—The 
Administrator shall assign to each compen-
satory allowance established under subpara-
graph (A) a unique identification number. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) the term ‘destruction’ means the con-
version of a greenhouse gas by thermal, chem-
ical, or other means to another gas or set of 
gases with little or no carbon dioxide equivalent 
value; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00731
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
732 
HR 2454 PCS
‘‘(B) the term ‘nonemissive use’ means the 
use of fossil fuel as a feedstock in an industrial 
or manufacturing process to the extent that 
greenhouse gases are not emitted from such 
process, and to the extent that the products of 
such process are not intended for use as, or to 
be contained in, a fuel; and 
‘‘(C) the term ‘conversionary use’ means 
the conversion during research or manufac-
turing of a fluorinated gas into another green-
house gas or set of gases with a lower carbon 
dioxide equivalent value. 
‘‘(4) FEEDSTOCK EMISSIONS STUDY.— 
‘‘(A) The Administrator may conduct a 
study to determine the extent to which petro-
leum-based or coal-based liquid or gaseous fuel, 
petroleum coke, natural gas liquid, or natural 
gas are used as feedstocks in manufacturing 
processes to produce products and the green-
house gas emissions resulting from such uses. 
‘‘(B) If as a result of such a study, the Ad-
ministrator determines that the use of such 
products by noncovered sources results in sub-
stantial emissions of greenhouse gases and that 
such emissions have not been adequately ad-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00732
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
733 
HR 2454 PCS
dressed under other requirements of this Act, 
the Administrator may, after notice and com-
ment rulemaking, promulgate a regulation re-
ducing 
compensatory 
allowances 
commen-
surately if doing so will not result in shifting 
such emissions to noncovered sources. 
‘‘(g) FLUORINATED GASES ASSESSMENT.—No later 
than March 31, 2014, the Administrator shall complete 
an assessment of the regulation of non-HFC fluorinated 
gases under this title to determine whether the most ap-
propriate point of regulation is at the gas manufacturer 
or importer level, or at the source of emissions down-
stream. If the Administrator determines, based on consid-
eration of environmental effectiveness, cost effectiveness, 
administrative feasibility, extent of coverage of emissions, 
competitiveness and other relevant considerations con-
sistent with the purposes of this title, that emissions of 
non-HFC fluorinated gases can best be regulated by desig-
nating downstream emission sources as covered entities 
with compliance obligations under section 722, the Admin-
istrator shall, after notice and comment rulemaking, 
change the definition of covered entity and the compliance 
obligations under section 722 with respect to non-HFC 
fluorinated gases accordingly, consistent with the purposes 
of this title, and establish such other requirements as are 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00733
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
734 
HR 2454 PCS
necessary to ensure compliance for such entities with the 
requirements of this title. 
‘‘(h) REGULATIONS.—Not later than 24 months after 
the date of enactment of this title, the Administrator shall 
promulgate regulations to carry out the provisions of this 
title. 
‘‘SEC. 722. PROHIBITION OF EXCESS EMISSIONS. 
‘‘(a) PROHIBITION.—Except as provided in sub-
section (c), effective January 1, 2012, each covered entity 
is prohibited from emitting greenhouse gases and having 
attributable greenhouse gas emissions, in combination, in 
excess of its allowable emissions level. A covered entity’s 
allowable emissions level for each calendar year is the 
number of emission allowances (or offset credits or other 
allowances as provided in subsection (d)) it holds as of 
12:01 a.m. on April 1 (or a later date established by the 
Administrator under subsection (j)) of the following cal-
endar year. 
‘‘(b) METHODS OF DEMONSTRATING COMPLIANCE.— 
Except as otherwise provided in this section, the owner 
or operator of a covered entity shall not be considered to 
be in compliance with the prohibition in subsection (a) un-
less, as of 12:01 a.m. on April 1 (or a later date estab-
lished by the Administrator under subsection (j)) of each 
calendar year starting in 2013, the owner or operator 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00734
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
735 
HR 2454 PCS
holds a quantity of emission allowances (or offset credits 
or other allowances as provided in subsection (d)) at least 
as great as the quantity calculated as follows: 
‘‘(1) ELECTRICITY
SOURCES.—For a covered 
entity described in section 700(13)(A), 1 emission 
allowance for each ton of carbon dioxide equivalent 
of greenhouse gas that such covered entity emitted 
in the previous calendar year, excluding emissions 
resulting from the combustion of— 
‘‘(A) petroleum-based or coal-based liquid 
fuel; 
‘‘(B) natural gas liquid; 
‘‘(C) renewable biomass or gas derived 
from renewable biomass; or 
‘‘(D) petroleum coke or gas derived from 
petroleum coke. 
‘‘(2) FUEL PRODUCERS AND IMPORTERS.—For 
a covered entity described in section 700(13)(B), 1 
emission allowance for each ton of carbon dioxide 
equivalent of greenhouse gas that would be emitted 
from the combustion of any petroleum-based or coal- 
based liquid fuel, petroleum coke, or natural gas liq-
uid, produced or imported by such covered entity 
during the previous calendar year for sale or dis-
tribution in interstate commerce, assuming no cap-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00735
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
736 
HR 2454 PCS
ture and sequestration of any greenhouse gas emis-
sions. 
‘‘(3) INDUSTRIAL
GAS
PRODUCERS
AND
IM-
PORTERS.—For a covered entity described in section 
700(13)(C), 1 emission allowance for each ton of 
carbon dioxide equivalent of fossil fuel-based carbon 
dioxide, nitrous oxide, or any other fluorinated gas 
that is a greenhouse gas (except for nitrogen 
trifluoride), or any combination thereof, produced or 
imported by such covered entity during the previous 
calendar year for sale or distribution in interstate 
commerce. 
‘‘(4) NITROGEN TRIFLUORIDE SOURCES.—For 
a covered entity described in section 700(13)(D), 1 
emission allowance for each ton of carbon dioxide 
equivalent of nitrogen trifluoride that such covered 
entity emitted in the previous calendar year. 
‘‘(5) GEOLOGICAL SEQUESTRATION SITES.—For 
a covered entity described in section 700(13)(E), 1 
emission allowance for each ton of carbon dioxide 
equivalent of greenhouse gas that such covered enti-
ty emitted in the previous calendar year. 
‘‘(6) INDUSTRIAL STATIONARY SOURCES.—For 
a covered entity described in section 700(13)(F), 
(G), or (H), 1 emission allowance for each ton of 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00736
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
737 
HR 2454 PCS
carbon dioxide equivalent of greenhouse gas that 
such covered entity emitted in the previous calendar 
year, excluding emissions resulting from— 
‘‘(A) the combustion of petroleum-based or 
coal-based liquid fuel; 
‘‘(B) the combustion of natural gas liquid; 
‘‘(C) the combustion of renewable biomass 
or gas derived from renewable biomass; 
‘‘(D) the combustion of petroleum coke or 
gas derived from petroleum coke; or 
‘‘(E) the use of any fluorinated gas that is 
a greenhouse gas purchased for use at that cov-
ered entity, except for nitrogen trifluoride. 
‘‘(7) INDUSTRIAL FOSSIL FUEL-FIRED COMBUS-
TION DEVICES.—For a covered entity described in 
section 700(13)(I), 1 emission allowance for each 
ton of carbon dioxide equivalent of greenhouse gas 
that the devices emitted in the previous calendar 
year, excluding emissions resulting from the combus-
tion of— 
‘‘(A) petroleum-based or coal-based liquid 
fuel; 
‘‘(B) natural gas liquid; 
‘‘(C) renewable biomass or gas derived 
from renewable biomass; or 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00737
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
738 
HR 2454 PCS
‘‘(D) petroleum coke or gas derived from 
petroleum coke. 
‘‘(8) NATURAL GAS LOCAL DISTRIBUTION COM-
PANIES.—For a covered entity described in section 
700(13)(J), 1 emission allowance for each ton of 
carbon dioxide equivalent of greenhouse gas that 
would be emitted from the combustion of the natural 
gas, and any other gas meeting the specifications for 
commingling with natural gas for purposes of deliv-
ery, that such entity delivered during the previous 
calendar year to customers that are not covered enti-
ties, assuming no capture and sequestration of that 
greenhouse gas. 
‘‘(9) ALGAE-BASED FUELS.—Where carbon di-
oxide (or another greenhouse gas) generated by a 
covered entity is used as an input in the production 
of algae-based fuels, the Administrator shall ensure 
that emission allowances are required to be held ei-
ther for the carbon dioxide generated by a covered 
entity that is used to grow the algae or for the por-
tion of the carbon dioxide emitted from combustion 
of the fuel produced from such algae that is attrib-
utable to carbon dioxide generated by a covered enti-
ty, but not for both. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00738
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
739 
HR 2454 PCS
‘‘(10) FUGITIVE
EMISSIONS.—The greenhouse 
gas emissions to which paragraphs (1), (4), (6), and 
(7) apply shall not include fugitive emissions of 
greenhouse gas, except to the extent the Adminis-
trator determines that data on the carbon dioxide 
equivalent value of greenhouse gas in the fugitive 
emissions can be provided with sufficient precision, 
reliability, accessibility, and timeliness to ensure the 
integrity of emission allowances, the allowance track-
ing system, and the cap on emissions. 
‘‘(11) EXPORT EXEMPTION.—This section shall 
not apply to any petroleum-based or coal-based liq-
uid fuel, petroleum coke, natural gas liquid, fossil 
fuel-based 
carbon 
dioxide, 
nitrous 
oxide, 
or 
fluorinated gas that is exported for sale or use. 
‘‘(12) NATURAL GAS LIQUIDS.—For natural gas 
liquids, the covered entity subject to the requirement 
stated in paragraph (2) shall be the owner of the 
natural gas liquids at the point the natural gas liq-
uids are separated into merchantable products. 
‘‘(13) 
APPLICATION
OF
MULTIPLE
PARA-
GRAPHS.—For a covered entity to which more than 
1 of paragraphs (1) through (8) apply, all applicable 
paragraphs shall apply, except that not more than 1 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00739
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
740 
HR 2454 PCS
emission allowance shall be required for the same 
emission. 
‘‘(14) APPLICATION TO FRACTIONS OF TONS.— 
In applying paragraphs (1) through (8), any amount 
less than 1 ton of carbon dioxide equivalent of emis-
sions or attributable greenhouse gas emissions shall 
be treated as 1 ton of such carbon dioxide equiva-
lent. 
‘‘(c) PHASE-IN OF PROHIBITION.— 
‘‘(1) INDUSTRIAL STATIONARY SOURCES.—The 
prohibition under subsection (a) shall first apply to 
a covered entity described in section 700(13)(D), 
(F), (G), (H), or (I), with respect to emissions oc-
curring during calendar year 2014. 
‘‘(2) NATURAL GAS LOCAL DISTRIBUTION COM-
PANIES.—The prohibition under subsection (a) shall 
first apply to a covered entity described in section 
700(13)(J) with respect to deliveries occurring dur-
ing calendar year 2016. 
‘‘(d) ADDITIONAL METHODS.—In addition to using 
the method of compliance described in subsection (b), a 
covered entity may do the following: 
‘‘(1) OFFSET CREDITS.— 
‘‘(A) IN GENERAL.—Covered entities col-
lectively may, in accordance with this para-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00740
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
741 
HR 2454 PCS
graph, use offset credits to demonstrate compli-
ance for up to a maximum of 2 billion tons of 
greenhouse gas emissions annually. The ability 
to demonstrate compliance with offset credits 
shall be divided pro rata among covered entities 
by allowing each covered entity to satisfy a per-
centage of the number of allowances required to 
be held under subsection (b) to demonstrate 
compliance by holding 1 domestic offset credit 
or 1.25 international offset credits in lieu of an 
emission allowance, except as provided in sub-
paragraph (D). 
‘‘(B) 
APPLICABLE
PERCENTAGE.—The 
percentage referred to in subparagraph (A) for 
a given calendar year shall be determined by di-
viding 2 billion by the sum of 2 billion plus the 
number of emission allowances established 
under section 721(a) for the previous year, and 
multiplying that number by 100. Not more than 
one half of the applicable percentage under this 
paragraph may be used by holding domestic off-
set credits, and not more than one half of the 
applicable percentage under this paragraph may 
be used by holding international offset credits, 
except as provided in subparagraph (C). 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00741
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
742 
HR 2454 PCS
‘‘(C) MODIFIED
PERCENTAGES.—If the 
Administrator determines that domestic offset 
credits available for use in demonstrating com-
pliance in any calendar year at domestic offset 
prices generally equal to or less than emission 
allowance prices, are likely to offset less than 
0.9 billion tons of greenhouse gas emissions 
(measured in tons of carbon dioxide equiva-
lents), for purposes of compliance demonstra-
tion in that year the Administrator shall— 
‘‘(i) increase the percentage of emis-
sions that can be offset through the use of 
international offset credits to reflect the 
amount that 1.0 billion exceeds the number 
of domestic offset credits the Adminis-
trator determines is available, at prices 
generally equal to or less than emission al-
lowance prices, for that year, up to a max-
imum of 0.5 billion tons of greenhouse gas 
emissions; and 
‘‘(ii) decrease the percentage of emis-
sions that can be offset through the use of 
domestic offset credits by the same 
amount. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00742
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
743 
HR 2454 PCS
‘‘(D) INTERNATIONAL OFFSET CREDITS.— 
Notwithstanding subparagraph (A), to dem-
onstrate compliance prior to calendar year 
2018, a covered entity may use 1 international 
offset credit in lieu of an emission allowance up 
to the amount permitted under this paragraph. 
‘‘(E) PRESIDENT’S
RECOMMENDATION.— 
The President may make a recommendation to 
Congress as to whether the number 2 billion 
specified in subparagraphs (A) and (B) should 
be increased or decreased. 
‘‘(2) TERM OFFSET CREDITS.— 
‘‘(A) IN GENERAL.—Covered entities may, 
in accordance with this paragraph, use non-ex-
pired term offset credits instead of domestic 
offset credits for purposes of temporarily dem-
onstrating compliance with this section. 
‘‘(B) AMOUNT.—The combined quantity of 
term offset credits and domestic offset credits 
used by a covered entity to demonstrate compli-
ance for its emissions or attributable green-
house gas emissions in any given year shall not 
exceed the quantity of domestic offset credits 
that a covered entity is entitled to use for that 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00743
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
744 
HR 2454 PCS
year to demonstrate compliance in accordance 
with paragraph (1). 
‘‘(C) EXPIRATION.—A term offset credit 
shall expire in the year after its term ends. The 
term of a term offset credit shall be calculated 
by adding to the year of issuance the number 
of years equal to the length of the crediting pe-
riod for the practice or project for which the 
term offset credit was issued, but in no case 
shall be later than the date 5 years from the 
date of issuance. 
‘‘(D) DEMONSTRATING COMPLIANCE UPON 
EXPIRATION OF TERM OFFSET CREDIT.—With 
respect to the emissions for which a covered en-
tity is using term offset credits to demonstrate 
compliance temporarily with this section, the 
owner or operator of a covered entity shall not 
be considered to be in compliance with the pro-
hibition in subsection (a) unless, as of 12:01 
a.m. on April 1 (or a later date established by 
the Administrator under subsection (j)) of the 
calendar year in which a term offset credit ex-
pires, the owner or operator holds— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00744
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
745 
HR 2454 PCS
‘‘(i) for purposes of finally dem-
onstrating compliance, an allowance or a 
domestic offset credit; or 
‘‘(ii) for purposes of temporarily dem-
onstrating compliance, a non-expired term 
offset credit. 
Domestic offset credits used for purposes of fi-
nally demonstrating compliance under this sub-
paragraph shall not be subject to the percent-
age limitations in subparagraph (B). 
‘‘(E) FINANCIAL ASSURANCE.—A covered 
entity may not use a term offset credit to dem-
onstrate compliance temporarily unless it simul-
taneously provides to the Administrator finan-
cial assurance that, at the end of the term off-
set credit’s crediting term, the covered entity 
will have sufficient resources to obtain the 
quantity of allowances or credits necessary to 
demonstrate final compliance. The Adminis-
trator shall issue regulations establishing re-
quirements for such financial assurance, which 
shall take into account the increased risk asso-
ciated with longer crediting terms. These regu-
lations shall take into account the total number 
of tons of carbon dioxide equivalent of green-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00745
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
746 
HR 2454 PCS
house gas emissions for which a covered entity 
is demonstrating compliance temporarily, and 
may set a limit on this amount. In the event 
that a covered entity that used term offset cred-
its to demonstrate compliance temporarily fails 
to meet the requirements of subparagraph (D) 
at the end of the term offset credits’ crediting 
term, if the financial assurance mechanism fails 
to provide to the Administrator the number of 
allowances or offset credits for which the cred-
iting term has expired, then the Administrator 
shall retire that number of allowances with the 
vintage year 2 years after the year in which the 
term offset credit expires in the same amount. 
Allowances so retired shall not be counted as 
emission allowances established for that cal-
endar year under section 721(a). 
‘‘(3) 
INTERNATIONAL
EMISSION
ALLOW-
ANCES.—To demonstrate compliance, a covered enti-
ty may hold an international emission allowance in 
lieu of an emission allowance, except as modified 
under section 728(d). 
‘‘(4) COMPENSATORY ALLOWANCES.—To dem-
onstrate compliance, a covered entity may hold a 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00746
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
747 
HR 2454 PCS
compensatory allowance obtained under section 
721(f) in lieu of an emission allowance. 
‘‘(e) RETIREMENT OF ALLOWANCES AND CREDITS.— 
As soon as practicable after a deadline established for cov-
ered entities to demonstrate compliance with this title, the 
Administrator shall retire the quantity of allowances or 
credits required to be held under this title. 
‘‘(f) ALTERNATIVE METRICS.—For categories of cov-
ered entities described in subparagraph (B), (C), (D), (G), 
(H), or (I) of section 700(13), the Administrator may, by 
rule, establish an applicability threshold for inclusion 
under those subparagraphs using an alternative metric 
and level, provided that such metric and level are easier 
to administer and cover the same size and type of sources 
as the threshold defined in such subparagraphs. 
‘‘(g) THRESHOLD REVIEW.—For each category of 
covered entities described in subparagraph (B), (C), (D), 
(G), (H), or (I) of section 700(13), the Administrator 
shall, in 2020 and once every 8 years thereafter, review 
the carbon dioxide equivalent emission threshold that is 
used to define covered entities in such category. After con-
sideration of— 
‘‘(1) emissions from covered entities in such 
category, and from other entities of the same type 
that emit less than the threshold amount for the cat-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00747
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
748 
HR 2454 PCS
egory (including emission sources that commence op-
eration after the date of enactment of this title that 
are not covered entities); and 
‘‘(2) whether greater greenhouse gas emission 
reductions can be cost-effectively achieved by low-
ering the applicable threshold, 
the Administrator may by rule lower such threshold to not 
less than 10,000 tons of carbon dioxide equivalent emis-
sions. In determining the cost effectiveness of potential re-
ductions from lowering the threshold for covered entities, 
the Administrator shall consider alternative regulatory 
greenhouse gas programs, including setting standards 
under other titles of this Act. 
‘‘(h) DESIGNATED REPRESENTATIVES.—The regula-
tions promulgated under section 721(h) shall require that 
each covered entity, and each entity holding allowances or 
offset credits or receiving allowances or offset credits from 
the Administrator under this title, submit to the Adminis-
trator a certificate of representation designating a des-
ignated representative. 
‘‘(i) EDUCATION AND OUTREACH.— 
‘‘(1) IN GENERAL.—The Administrator shall es-
tablish and carry out a program of education and 
outreach to assist covered entities, especially entities 
having little experience with environmental regu-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00748
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
749 
HR 2454 PCS
latory requirements similar or comparable to those 
under this title, in preparing to meet the compliance 
obligations of this title. Such program shall include 
education with respect to using markets to effec-
tively achieve such compliance. 
‘‘(2) FAILURE TO RECEIVE INFORMATION.—A 
failure to receive information or assistance under 
this subsection may not be used as a defense against 
an allegation of any violation of this title. 
‘‘(j) ADJUSTMENT
OF DEADLINE.—The Adminis-
trator may, by rule, establish a deadline for demonstrating 
compliance, for a calendar year, later than the date pro-
vided in subsection (a), as necessary to ensure the avail-
ability of emissions data, but in no event shall the deadline 
be later than June 1. 
‘‘(k) NOTICE REQUIREMENT FOR COVERED ENTI-
TIES RECEIVING NATURAL GAS FROM NATURAL GAS 
LOCAL DISTRIBUTION COMPANIES.—The owner or oper-
ator of a covered entity that takes delivery of natural gas 
from a natural gas local distribution company shall, not 
later than September 1 of each calendar year, notify such 
natural gas local distribution company in writing that 
such entity will qualify as a covered entity under this title 
for that calendar year. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00749
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
750 
HR 2454 PCS
‘‘(l) COMPLIANCE OBLIGATION.—For purposes of 
this title, the year of a compliance obligation is the year 
in which compliance is determined, not the year in which 
the greenhouse gas emissions occur or the covered entity 
has attributable greenhouse gas emissions. 
‘‘SEC. 723. PENALTY FOR NONCOMPLIANCE. 
‘‘(a) ENFORCEMENT.—A violation of any prohibition 
of, requirement of, or regulation promulgated pursuant to 
this title shall be a violation of this Act. It shall be a viola-
tion of this Act for a covered entity to emit greenhouse 
gases and have attributable greenhouse gas emissions, in 
combination, in excess of its allowable emissions level as 
provided in section 722(a). Each ton of carbon dioxide 
equivalent for which a covered entity fails to demonstrate 
compliance under section 722 shall be a separate violation. 
In the event that a covered entity fails to demonstrate 
compliance at the expiration of a term offset credit’s cred-
iting term as required by section 722(d)(2)(D), the year 
of the violation shall be the year in which the term offset 
credit expires. 
‘‘(b) EXCESS EMISSIONS PENALTY.— 
‘‘(1) IN GENERAL.—The owner or operator of 
any covered entity that fails for any year to comply, 
on the deadline described in section 722(a), (d)(2), 
or (j), shall be liable for payment to the Adminis-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00750
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
751 
HR 2454 PCS
trator of an excess emissions penalty in the amount 
described in paragraph (2). 
‘‘(2) AMOUNT.—The amount of an excess emis-
sions penalty required to be paid under paragraph 
(1) shall be equal to the product obtained by multi-
plying— 
‘‘(A) the tons of carbon dioxide equivalent 
of greenhouse gas emissions or attributable 
greenhouse gas emissions for which the owner 
or operator of a covered entity failed to dem-
onstrate compliance under section 722 on the 
deadline; by 
‘‘(B) twice the auction clearing price for 
the earliest vintage year emission allowances in 
the last auction carried out pursuant to section 
791 before such deadline. 
‘‘(3) TIMING.—An excess emissions penalty re-
quired under this subsection shall be immediately 
due and payable to the Administrator, without de-
mand, in accordance with regulations promulgated 
by the Administrator, which shall be issued not later 
than 2 years after the date of enactment of this 
title. 
‘‘(4) NO
EFFECT
ON
LIABILITY.—An excess 
emissions penalty due and payable by the owners or 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00751
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
752 
HR 2454 PCS
operators of a covered entity under this subsection 
shall not diminish the liability of the owners or oper-
ators for any fine, penalty, or assessment against 
the owners or operators for the same violation under 
any other provision of this Act or any other law. 
‘‘(c) EXCESS EMISSIONS ALLOWANCES.—The owner 
or operator of a covered entity that fails for any year to 
comply on the deadline described in section 722(a), (d)(2), 
or (j) shall be liable to offset the covered entity’s excess 
combination of greenhouse gases emitted and attributable 
greenhouse gas emissions by an equal quantity of emission 
allowances during the following calendar year, or such 
longer period as the Administrator may prescribe. During 
the year in which the covered entity failed to comply, or 
any year thereafter, the Administrator may deduct the 
emission allowances required under this subsection to off-
set the covered entity’s excess greenhouse gas emissions 
or attributable greenhouse gas emissions. 
‘‘SEC. 724. TRADING. 
‘‘(a) PERMITTED TRANSACTIONS.—Except as other-
wise provided in this title, the lawful holder of an emission 
allowance, compensatory allowance, or offset credit may, 
without restriction, sell, exchange, transfer, hold for com-
pliance in accordance with section 722, or request that the 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00752
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
753 
HR 2454 PCS
Administrator retire the emission allowance, compensatory 
allowance, or offset credit. 
‘‘(b) NO RESTRICTION
ON TRANSACTIONS.—The 
privilege of purchasing, holding, selling, exchanging, 
transferring, and requesting retirement of emission allow-
ances, compensatory allowances, or offset credits shall not 
be restricted to the owners and operators of covered enti-
ties, except as otherwise provided in this title. 
‘‘(c) EFFECTIVENESS
OF
ALLOWANCE
TRANS-
FERS.—No transfer of an allowance, offset credit, or term 
offset credit shall be effective for purposes of this title 
until a certification of the transfer, signed by the des-
ignated representative of the transferor, is received and 
recorded by the Administrator in accordance with regula-
tions promulgated under section 721(h). 
‘‘(d) ALLOWANCE TRACKING SYSTEM.—The regula-
tions promulgated under section 721(h) shall include a 
system for issuing, recording, holding, and tracking allow-
ances, offset credits, and term offset credits that shall 
specify all necessary procedures and requirements for an 
orderly and competitive functioning of the allowance and 
offset credit markets. Such regulations shall provide for 
appropriate publication of the information in the system 
on the Internet. 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00753
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
754 
HR 2454 PCS
‘‘SEC. 725. BANKING AND BORROWING. 
‘‘(a) BANKING.—An emission allowance may be used 
to comply with section 722 or section 723 for emissions 
in— 
‘‘(1) the vintage year for the allowance; or 
‘‘(2) any calendar year subsequent to the vin-
tage year for the allowance. 
‘‘(b) EXPIRATION.— 
‘‘(1) REGULATIONS.—The Administrator may 
establish by regulation criteria and procedures for 
determining whether, and for implementing a deter-
mination that, the expiration of an allowance, offset 
credit, or term offset credit, established or issued 
under the American Clean Energy and Security Act 
of 2009 or the amendments made thereby, or expira-
tion of the ability to use an international emission 
allowance to comply with section 722, is necessary to 
ensure the authenticity and integrity of allowances, 
offset credits, or term offset credits or the allowance 
tracking system. 
‘‘(2) GENERAL
RULE.—An allowance, offset 
credit, or term offset credit, established or issued 
under the American Clean Energy and Security Act 
of 2009 or the amendments made thereby, shall not 
expire unless— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00754
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
755 
HR 2454 PCS
‘‘(A) it is retired by the Administrator pur-
suant to this title; or 
‘‘(B) it is determined to expire or to have 
expired by a specific date by the Administrator 
in accordance with regulations promulgated 
under paragraph (1). 
‘‘(3) 
INTERNATIONAL
EMISSION
ALLOW-
ANCES.—The ability to use an international emission 
allowance to comply with section 722 shall not ex-
pire unless— 
‘‘(A) the allowance is retired by the Ad-
ministrator pursuant to this title; or 
‘‘(B) the ability to use such allowance to 
meet such compliance obligation requirements is 
determined to expire or to have expired by a 
specific date by the Administrator in accord-
ance with regulations promulgated under para-
graph (1). 
‘‘(c) BORROWING FUTURE VINTAGE YEAR ALLOW-
ANCES.— 
‘‘(1) BORROWING WITHOUT INTEREST.—In ad-
dition to the uses described in subsection (a), an 
emission allowance may be used to demonstrate com-
pliance under section 722 or comply with section 
723 for emissions, production, importation, manu-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00755
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
756 
HR 2454 PCS
facture, or deliveries in the calendar year imme-
diately preceding the vintage year for the allowance. 
‘‘(2) BORROWING WITH INTEREST.— 
‘‘(A) IN GENERAL.—A covered entity may 
demonstrate compliance under section 722 in a 
specific calendar year for up to 15 percent of 
its emissions by holding emission allowances 
with a vintage year 1 to 5 years later than that 
calendar year. 
‘‘(B) LIMITATIONS.—An emission allow-
ance borrowed pursuant to this paragraph shall 
be an emission allowance that is established by 
the Administrator for a specific future calendar 
year under section 721(a) and that is held by 
the borrower. 
‘‘(C) PREPAYMENT
OF
INTEREST.—For 
each emission allowance that an owner or oper-
ator of a covered entity borrows pursuant to 
this paragraph, such owner or operator shall, at 
the time it borrows the allowance, hold for re-
tirement by the Administrator, and the Admin-
istrator shall retire, a quantity of emission al-
lowances that is equal to the product obtained 
by multiplying— 
‘‘(i) 0.08; by 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00756
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
757 
HR 2454 PCS
‘‘(ii) the number of years between the 
calendar year in which the allowance is 
being used to satisfy a compliance obliga-
tion and the vintage year of the allowance. 
‘‘SEC. 726. STRATEGIC RESERVE. 
‘‘(a) STRATEGIC RESERVE AUCTIONS.— 
‘‘(1) IN GENERAL.—Once each quarter of each 
calendar year for which allowances are established 
under section 721(a), the Administrator shall auc-
tion strategic reserve allowances. 
‘‘(2) RESTRICTION TO COVERED ENTITIES.—In 
each auction conducted under paragraph (1), only 
covered entities that the Administrator expects will 
be required to comply with section 722 in the fol-
lowing calendar year shall be eligible to make pur-
chases. 
‘‘(b) POOL OF EMISSION ALLOWANCES FOR STRA-
TEGIC RESERVE AUCTIONS.— 
‘‘(1) FILLING
THE
STRATEGIC
RESERVE
INI-
TIALLY.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall, not later than 2 years after the date of 
enactment of this title, establish a strategic re-
serve account, and shall place in that account 
an amount of emission allowances established 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00757
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
758 
HR 2454 PCS
under section 721(a) for each calendar year 
from 2012 through 2050 in the amounts speci-
fied in subparagraph (B) of this paragraph. 
‘‘(B) AMOUNT.—The amount referred to in 
subparagraph (A) shall be— 
‘‘(i) for each of calendar years 2012 
through 2019, 1 percent of the quantity of 
emission allowances established for that 
year pursuant to section 721(e)(1); 
‘‘(ii) for each of calendar years 2020 
through 2029, 2 percent of the quantity of 
emission allowances established for that 
year pursuant to section 721(e)(1); and 
‘‘(iii) for each of calendar years 2030 
through 2050, 3 percent of the quantity of 
emission allowances established for that 
year pursuant to section 721(e)(1). 
‘‘(C) EFFECT
ON
OTHER
PROVISIONS.— 
Any provision in this title (except for subpara-
graph (B) of this paragraph) that refers to a 
quantity or percentage of the emission allow-
ances established for a calendar year under sec-
tion 721(a) shall be considered to refer to the 
amount of emission allowances as determined 
pursuant to section 721(e), less any emission 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00758
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
760 
HR 2454 PCS
for the strategic reserve auctions held in 2012. For 
the strategic reserve auctions held in 2013 and 
2014, the minimum strategic reserve auction price 
shall be the strategic reserve auction price for the 
previous year increased by 5 percent plus the rate of 
inflation (as measured by the Consumer Price Index 
for All Urban Consumers). 
‘‘(3) MINIMUM STRATEGIC RESERVE AUCTION 
PRICE IN SUBSEQUENT YEARS.—For each strategic 
reserve auction held in 2015 and each year there-
after, the minimum strategic reserve auction price 
shall be 60 percent above a rolling 36-month average 
of the daily closing price for that year’s emission al-
lowance vintage as reported on registered carbon 
trading facilities, calculated using constant dollars. 
‘‘(d) QUANTITY
OF EMISSION ALLOWANCES RE-
LEASED FROM THE STRATEGIC RESERVE.— 
‘‘(1) INITIAL
LIMITS.—For each of calendar 
years 2012 through 2016, the annual limit on the 
number of emission allowances from the strategic re-
serve account that may be auctioned is an amount 
equal to 5 percent of the emission allowances estab-
lished for that calendar year under section 721(a). 
This limit does not apply to international offset 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00760
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
761 
HR 2454 PCS
credits sold on consignment pursuant to subsection 
(h). 
‘‘(2) LIMITS IN SUBSEQUENT YEARS.—For cal-
endar year 2017 and each year thereafter, the an-
nual limit on the number of emission allowances 
from the strategic reserve account that may be auc-
tioned is an amount equal to 10 percent of the emis-
sion allowances established for that calendar year 
under section 721(a). This limit does not apply to 
international offset credits sold on consignment pur-
suant to subsection (h). 
‘‘(3) ALLOCATION OF LIMITATION.—One-fourth 
of each year’s annual strategic reserve auction limit 
under this subsection shall be made available for 
auction in each quarter. Any allowances from the 
strategic reserve account that are made available for 
sale in a quarterly auction and not sold shall be 
rolled over and added to the quantity available for 
sale in the following quarter, except that allowances 
not sold at auction in the fourth quarter of a year 
shall not be rolled over to the following calendar 
year’s auctions, but shall be returned to the stra-
tegic reserve account. 
‘‘(e) PURCHASE LIMIT.— 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00761
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
762 
HR 2454 PCS
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2) or (3), the annual number of emission al-
lowances that a covered entity may purchase at the 
strategic reserve auctions in each calendar year shall 
not exceed 20 percent of the covered entity’s com-
bined greenhouse gas emissions and attributable 
greenhouse gas emissions during the most recent 
year for which allowances or offset credits were re-
tired under section 722. 
‘‘(2) 2012 LIMIT.—For calendar year 2012, the 
maximum aggregate number of emission allowances 
that a covered entity may purchase from that year’s 
strategic reserve auctions shall be 20 percent of the 
covered entity’s combined greenhouse gas emissions 
and attributable greenhouse gas emissions that the 
covered entity reported to the registry established 
under section 713 for 2011 and that would be sub-
ject to section 722(a) if occurring in later calendar 
years. 
‘‘(3) 
NEW
ENTRANTS.—The 
Administrator 
shall, by regulation, establish a separate purchase 
limit applicable to entities that expect to become a 
covered entity in the year of the auction, permitting 
them to purchase emission allowances at the stra-
tegic reserve auctions in their first calendar year of 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00762
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
763 
HR 2454 PCS
operation in an amount of at least 20 percent of 
their expected combined greenhouse gas emissions 
and attributable greenhouse gas emissions for that 
year. 
‘‘(f) DELEGATION OR CONTRACT.—Pursuant to regu-
lations under this section, the Administrator may, by dele-
gation or contract, provide for the conduct of strategic re-
serve auctions under the Administrator’s supervision by 
other departments or agencies of the Federal Government 
or by nongovernmental agencies, groups, or organizations. 
‘‘(g) USE OF AUCTION PROCEEDS.— 
‘‘(1) DEPOSIT IN STRATEGIC RESERVE FUND.— 
The proceeds from strategic reserve auctions shall be 
placed in the Strategic Reserve Fund established 
under section 793(1), and shall be available without 
further appropriation or fiscal year limitation for the 
purposes described in this subsection. 
‘‘(2) INTERNATIONAL OFFSET CREDITS FOR RE-
DUCED DEFORESTATION.—The Administrator shall 
use the proceeds from each strategic reserve auction 
to purchase international offset credits issued for re-
duced deforestation activities pursuant to section 
743(e). The Administrator shall retire those inter-
national offset credits and establish a number of 
emission allowances equal to 80 percent of the num-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00763
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
764 
HR 2454 PCS
ber of international offset credits so retired. Emis-
sion allowances established under this paragraph 
shall be in addition to those established under sec-
tion 721(a). 
‘‘(3) EMISSION
ALLOWANCES.—The Adminis-
trator shall deposit emission allowances established 
under paragraph (2) in the strategic reserve, except 
that, with respect to any such emission allowances in 
excess of the amount necessary to fill the strategic 
reserve to its original size, the Administrator shall— 
‘‘(A) except as provided in subparagraph 
(B), assign a vintage year to the emission al-
lowance, which shall be no earlier than the year 
in which the allowance is established under 
paragraph (2), and shall treat such allowances 
as ones that are not designated for distribution 
or auction for purposes of section 782(q) and 
(r); and 
‘‘(B) to the extent any such allowances 
cannot be assigned a vintage year because of 
the limitation in paragraph (4), retire the allow-
ances. 
‘‘(4) LIMITATION.—In no case may the Admin-
istrator assign under paragraph (3)(A) more emis-
sion allowances to a vintage year than the number 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00764
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
765 
HR 2454 PCS
of emission allowances from that vintage year that 
were placed in the strategic reserve account under 
subsection (b)(1). 
‘‘(h) AVAILABILITY
OF
INTERNATIONAL
OFFSET 
CREDITS FOR AUCTION.— 
‘‘(1) IN
GENERAL.—The regulations promul-
gated under section 721(h) shall allow any entity 
holding international offset credits from reduced de-
forestation issued under section 743(e) to request 
that the Administrator include such offset credits in 
an upcoming strategic reserve auction. The regula-
tions shall provide that— 
‘‘(A) such international offset credits will 
be used to fill bid orders only after the supply 
of strategic reserve allowances available for sale 
at that auction has been depleted; 
‘‘(B) international offset credits may be 
sold at a strategic reserve auction under this 
subsection only if the Administrator determines 
that it is highly likely that covered entities will, 
to cover emissions occurring in the year the 
auction is held, use offset credits to dem-
onstrate compliance under section 722 for emis-
sions equal to or greater than 80 percent of 2 
billion tons of carbon dioxide equivalent; 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00765
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
767 
HR 2454 PCS
‘‘(2) PROCEEDS.—For international offset cred-
its sold pursuant to this subsection, notwithstanding 
section 3302 of title 31, United States Code, or any 
other provision of law, within 90 days of receipt, the 
United States shall transfer the proceeds from the 
auction, as defined in paragraph (1)(D), to the enti-
ty that offered the international offset credits for 
sale. No funds transferred from a purchaser to a 
seller of international offset credits under this para-
graph shall be held by any officer or employee of the 
United States or treated for any purpose as public 
monies. 
‘‘(3) PRICING.—When the Administrator acts 
under this subsection as the agent of an entity in 
possession of international offset credits, the Admin-
istrator is not obligated to obtain the highest price 
possible for the international offset credits, and in-
stead shall auction such international offset credits 
in the same manner and pursuant to the same rules 
(except as modified in paragraph (1)) as set forth 
for auctioning strategic reserve allowances. Entities 
requesting that such international offset credits be 
offered for sale at a strategic reserve auction may 
not set a minimum reserve price for their inter-
national offset credits that is different than the min-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00767
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
768 
HR 2454 PCS
imum strategic reserve auction price set pursuant to 
subsection (c). 
‘‘(i) INITIAL REGULATIONS.—Not later than 24 
months after the date of enactment of this title, the Ad-
ministrator shall promulgate regulations, in consultation 
with other appropriate agencies, governing the auction of 
allowances under this section. Such regulations shall in-
clude the following requirements: 
‘‘(1) FREQUENCY; FIRST
AUCTION.—Auctions 
shall be held four times per year at regular intervals, 
with the first auction to be held no later than March 
31, 2012. 
‘‘(2) AUCTION FORMAT.—Auctions shall follow 
a single-round, sealed-bid, uniform price format. 
‘‘(3) PARTICIPATION; FINANCIAL ASSURANCE.— 
Auctions shall be open to any covered entity eligible 
to purchase emission allowances at the auction 
under subsection (a)(2), except that the Adminis-
trator may establish financial assurance require-
ments to ensure that auction participants can and 
will perform on their bids. 
‘‘(4) DISCLOSURE
OF
BENEFICIAL
OWNER-
SHIP.—Each bidder in an auction shall be required 
to disclose the person or entity sponsoring or bene-
fitting from the bidder’s participation in the auction 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00768
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
769 
HR 2454 PCS
if such person or entity is, in whole or in part, other 
than the bidder. 
‘‘(5) PURCHASE LIMITS.—No person may, di-
rectly or in concert with another participant, pur-
chase more than 20 percent of the allowances of-
fered for sale at any quarterly auction. 
‘‘(6) PUBLICATION
OF
INFORMATION.—After 
the auction, the Administrator shall, in a timely 
fashion, publish the identities of winning bidders, 
the quantity of allowances obtained by each winning 
bidder, and the auction clearing price. 
‘‘(7) OTHER
REQUIREMENTS.—The Adminis-
trator may include in the regulations such other re-
quirements or provisions as the Administrator, in 
consultation with other agencies as appropriate, con-
siders appropriate to promote effective, efficient, 
transparent, and fair administration of auctions 
under this section. 
‘‘(j) REVISION
OF REGULATIONS.—The Adminis-
trator may, at any time, in consultation with other agen-
cies as appropriate, revise the initial regulations promul-
gated under subsection (i) by promulgating new regula-
tions. Such revised regulations need not meet the require-
ments identified in subsection (i) if the Administrator de-
termines that an alternative auction design would be more 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00769
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
770 
HR 2454 PCS
effective, taking into account factors including costs of ad-
ministration, transparency, fairness, and risks of collusion 
or manipulation. In determining whether and how to re-
vise the initial regulations under this subsection, the Ad-
ministrator shall not consider maximization of revenues to 
the Federal Government. 
‘‘SEC. 727. PERMITS. 
‘‘(a) PERMIT PROGRAM.—For stationary sources 
subject to title V of this Act that are covered entities, the 
provisions of this title shall be implemented by permits 
issued to such covered entities (and enforced) in accord-
ance with the provisions of title V, as modified by this 
title. Any such permit issued by the Administrator, or by 
a State or Indian tribe with an approved permit program, 
shall require the owner or operator of a covered entity to 
hold allowances or offset credits at least equal to the total 
annual amount of carbon dioxide equivalents for its com-
bined emissions and attributable greenhouse gas emissions 
to which section 722 applies. No such permit shall be 
issued that is inconsistent with the requirements of this 
title, and title V as applicable. Nothing in this section re-
garding compliance plans or in title V shall be construed 
as affecting allowances or offset credits. Submission of a 
statement by the owner or operator, or the designated rep-
resentative of the owners and operators, of a covered enti-
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00770
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS
771 
HR 2454 PCS
ty that the owners and operators will hold allowances or 
offset credits for the entity’s combined emissions and at-
tributable greenhouse gas emissions to which section 722 
applies shall be deemed to meet the proposed and ap-
proved planning requirements of title V. Recordation by 
the Administrator of transfers of allowances and offset 
credits shall amend automatically all applicable proposed 
or approved permit applications, compliance plans, and 
permits. 
‘‘(b) MULTIPLE OWNERS.—No permit shall be issued 
under this section and no allowances or offset credits shall 
be disbursed under this title to a covered entity or any 
other person until the designated representative of the 
owners or operators has filed a certificate of representa-
tion with regard to matters under this title, including the 
holding and distribution of emission allowances and the 
proceeds of transactions involving emission allowances. 
Where there are multiple holders of a legal or equitable 
title to, or a leasehold interest in, such a covered entity 
or other entity or where a utility or industrial customer 
purchases power under a long-term power purchase con-
tract from an independent power production facility that 
is a covered entity, the certificate shall state— 
‘‘(1) that emission allowances and the proceeds 
of transactions involving emission allowances will be 
VerDate Nov 24 2008 
23:34 Jul 07, 2009
Jkt 079200
PO 00000
Frm 00771
Fmt 6652
Sfmt 6201
E:\BILLS\H2454.PCS
H2454
tjames on DSKG8SOYB1PROD with BILLS