I 
118TH CONGRESS 
2D SESSION 
H. R. 9230 
To amend the Clean Air Act to establish a program to annually phasedown 
greenhouse gas emissions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 30, 2024 
Mr. TONKO introduced the following bill; which was referred to the Committee 
on Energy and Commerce, and in addition to the Committees on Ways 
and Means, Education and the Workforce, and Science, Space, and Tech-
nology, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend the Clean Air Act to establish a program to 
annually phasedown greenhouse gas emissions, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Climate Pollution Standard and Community Investment 
Act of 2024’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
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Sec. 1. Short title; table of contents. 
TITLE I—NATIONAL CLIMATE RESPONSE 
Sec. 101. Climate pollution reduction certainty. 
Sec. 102. Clean Energy Rebate Program. 
Sec. 103. Worker and Community Assistance Fund. 
Sec. 104. Cleaner Air Community Fund. 
Sec. 105. Negative Emissions Activities Fund. 
Sec. 106. Energy Innovation Fund. 
Sec. 107. Emission allowance market oversight. 
Sec. 108. Direct hire authority for implementation of this title. 
TITLE II—WORKER AND COMMUNITY ASSISTANCE 
Sec. 201. Definitions. 
Sec. 202. Energy and economic transition impact studies. 
Sec. 203. Office of Energy and Economic Transition. 
Sec. 204. Interagency Energy and Economic Transition Task Force. 
Sec. 205. Stakeholder Advisory Committee. 
Sec. 206. Assistance for adversely affected communities. 
Sec. 207. Community-Based Transition Hub program. 
Sec. 208. Assistance for adversely affected workers. 
TITLE I—NATIONAL CLIMATE 
RESPONSE 
SEC. 101. CLIMATE POLLUTION REDUCTION CERTAINTY. 
(a) IN GENERAL.—The Clean Air Act (42 U.S.C. 
7401 et seq.) is amended by adding after title VI the fol-
lowing new title: 
‘‘TITLE 
VII—CLIMATE 
POLLU-
TION REDUCTION PROGRAM 
‘‘PART A—GENERAL 
‘‘SEC. 701. DEFINITIONS. 
‘‘In this title: 
‘‘(1) ATTRIBUTABLE GREENHOUSE GAS EMIS-
SIONS.—The term ‘attributable greenhouse gas emis-
sions’, for a given calendar year, means— 
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‘‘(A) for a covered entity that is a fuel pro-
ducer or importer described in paragraph 
(4)(B), greenhouse gas emissions that would be 
emitted from the combustion of any petroleum- 
based or coal-based liquid fuel, petroleum coke, 
or natural gas liquid, produced or imported by 
that covered entity during that calendar year 
for sale or distribution in interstate commerce; 
‘‘(B) for a covered entity that is a bulk 
producer or importer described in paragraph 
(4)(C), the tons of carbon dioxide equivalent of 
any gas described in clauses (i) through (v) of 
paragraph (4)(C)— 
‘‘(i) produced or imported by such 
covered entity during that calendar year 
for sale or distribution in interstate com-
merce; or 
‘‘(ii) released as fugitive emissions in 
the production of fluorinated gas; and 
‘‘(C) for a natural gas local distribution 
company described in paragraph (4)(J), green-
house gas emissions that would be emitted from 
the combustion of the natural gas, and any 
other gas meeting the specifications for com-
mingling with natural gas for purposes of deliv-
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ery, as determined by the Administrator, that 
such entity delivered during that calendar year 
to customers that are not covered entities. 
‘‘(2) 
CARBON
DIOXIDE
EQUIVALENT.—The 
term ‘carbon dioxide equivalent’ means the unit of 
measure, expressed in tons, of a greenhouse gas as 
provided under section 713. 
‘‘(3) COMPLIANCE PERIOD.— 
‘‘(A) The term ‘compliance period’, with 
respect to compliance periods 2 through 10 and 
subsequent compliance periods, means the pe-
riod of 3 consecutive calendar years following 
the preceding compliance period. 
‘‘(B) The term ‘compliance period 1’ 
means calendar years 2026, 2027, and 2028. 
‘‘(4) COVERED ENTITY.—The term ‘covered en-
tity’ means each of the following: 
‘‘(A) Any electricity source with a name-
plate capacity of at least 25 megawatts. 
‘‘(B) Any stationary source that produces, 
and any entity that imports, for sale or dis-
tribution in interstate commerce in 2024 or any 
subsequent year, petroleum-based or coal-based 
liquid fuel, petroleum coke, or natural gas liq-
uid, which, in the aggregate, if combusted 
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tion of any number of chemical or petro-
chemical products. 
‘‘(H) Any stationary source that— 
‘‘(i) emits 25,000 or more tons of car-
bon dioxide equivalent in 2024 or any sub-
sequent year; and 
‘‘(ii) is in one of the following indus-
trial sectors: ethanol production, ferroalloy 
production, fluorinated gas production, 
food processing, glass production, hydrogen 
production, iron and steel production, lead 
production, magnesium production, pulp 
and paper manufacturing, landfill oper-
ations, wastewater treatment operations, 
and zinc production. 
‘‘(I) Any fossil fuel-fired combustion device 
(such as a boiler) or grouping of such devices 
that— 
‘‘(i) is all or part of an industrial 
source not specified in subparagraph (D), 
(F), (G), or (H); and 
‘‘(ii) emits 25,000 or more tons of 
carbon dioxide equivalent in 2024 or any 
subsequent year. 
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‘‘(J) Any natural gas local distribution 
company that in 2024 or any subsequent year 
delivers to customers that are not covered enti-
ties 460,000,000 cubic feet or more of the total 
of— 
‘‘(i) natural gas; and 
‘‘(ii) any other gas meeting the speci-
fications for commingling with natural gas 
for purposes of delivery, as determined by 
the Administrator. 
‘‘(5) CRITERIA
AIR
POLLUTANT.—The term 
‘criteria air pollutant’ means an air pollutant subject 
to national ambient air quality standards under sec-
tion 109. 
‘‘(6) 
DESIGNATED
REPRESENTATIVE.—The 
term ‘designated representative’ means, with respect 
to an entity described in subparagraph (A), (B), or 
(C), an individual authorized, through a certificate 
of representation submitted to the Administrator by 
the owners and operators or similar entity official, to 
represent the owners and operators or similar entity 
official in all matters pertaining to this title (includ-
ing the holding, transfer, or disposition of emission 
allowances), and to make all submissions to the Ad-
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ministrator under this title. Entities covered under 
this paragraph are— 
‘‘(A) covered entities; 
‘‘(B) reporting entities (as defined in sec-
tion 714); and 
‘‘(C) any other entities receiving or holding 
emission allowances under this title. 
‘‘(7) ELECTRICITY
SOURCE.—The term ‘elec-
tricity source’ means a stationary source that in-
cludes one or more combustion devices that, on Jan-
uary 1, 2024, or any date thereafter, are fossil fuel- 
fired and serve a generator that produces electricity 
for sale. 
‘‘(8) EMISSION ALLOWANCE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘emission allow-
ance’ means a limited authorization to emit, or 
have attributable greenhouse gas emissions in 
an amount of, 1 ton of carbon dioxide equiva-
lent of a greenhouse gas in accordance with this 
title. 
‘‘(B) OVERBURDENED
COMMUNITIES.— 
With respect to a covered entity that is a sta-
tionary source, including electricity sources and 
industrial sources, operating in a location des-
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ignated as a Cleaner Air Community under sec-
tion 733 of part C of this title, the term ‘emis-
sion allowance’ means a limited authorization to 
emit 0.5 tons of carbon dioxide equivalent of a 
greenhouse gas in accordance with this title. 
‘‘(9) FOSSIL
FUEL.—The term ‘fossil fuel’ 
means natural gas, petroleum, or coal, or any form 
of solid, liquid, or gaseous fuel derived therefrom. 
‘‘(10) FOSSIL
FUEL-FIRED.—The term ‘fossil 
fuel-fired’ means powered by combustion of fossil 
fuel, alone or in combination with any other fuel, re-
gardless of the percentage of fossil fuel consumed. 
‘‘(11) FUGITIVE EMISSIONS.—The term ‘fugi-
tive emissions’ means greenhouse gas emissions from 
leaks, valves, joints, or other small openings in 
pipes, ducts, or other equipment, or from vents. 
‘‘(12) GEOLOGIC
SEQUESTRATION
SITE.—The 
term ‘geologic sequestration site’ means a site where 
a greenhouse gas is geologically sequestered. 
‘‘(13) GREENHOUSE
GAS.—The term ‘green-
house gas’ means any gas described or designated 
under section 712(a). 
‘‘(14) GREENHOUSE GAS EMISSION.—The term 
‘greenhouse gas emission’ means the release of a 
greenhouse gas into the ambient air, except— 
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‘‘(A) a release of methane for which the 
Administrator imposes and collects a charge 
under section 136(c) of the Clean Air Act; 
‘‘(B) a release of a hydrofluorocarbon that 
is regulated pursuant to title VI of this Act or 
section 103 of the Consolidated Appropriations 
Act, 2021; and 
‘‘(C) greenhouse gases that are captured 
and geologically sequestered, unless the green-
house gas is later released into the ambient air. 
‘‘(15) HAZARDOUS AIR POLLUTANT.—The term 
‘hazardous air pollutant’ has the meaning given such 
term in section 112(a). 
‘‘(16) HOLD.—The term ‘hold’ means, with re-
spect to an emission allowance, to have in the appro-
priate account in the emission allowance tracking 
system established under section 718. 
‘‘(17) HOLDER.—The term ‘holder’ means, with 
respect to an emission allowance, the entity that 
holds such emission allowance. 
‘‘(18) INDUSTRIAL SOURCE.—The term ‘indus-
trial source’ means any stationary source that— 
‘‘(A) is not an electricity source; and 
‘‘(B) is in— 
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‘‘(i) the manufacturing sector (as de-
fined in North American Industrial Classi-
fication System codes 31, 32, and 33); or 
‘‘(ii) the natural gas processing or 
natural gas pipeline transportation sector 
(as defined in North American Industrial 
Classification System codes 211112 and 
486210). 
‘‘(19) NATURAL GAS LIQUID.—The term ‘nat-
ural gas liquid’ means ethane, butane, isobutane, 
natural gasoline, and propane. 
‘‘(20) NATURAL
GAS
LOCAL
DISTRIBUTION 
COMPANY.—The term ‘natural gas local distribution 
company’ has the meaning given the term ‘local dis-
tribution company’ in section 2(17) of the Natural 
Gas Policy Act of 1978. 
‘‘(21) 
NEGATIVE
EMISSIONS
ACTIVITIES 
FUND.—The term ‘Negative Emissions Activities 
Fund’ means the fund established under section 105 
of the Climate Pollution Standard and Community 
Investment Act of 2024. 
‘‘(22) OUTPUT.—The term ‘output’ means the 
total tons or other standard unit (as determined by 
the Administrator) produced by an entity in an in-
dustrial sector. 
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‘‘(23) PETROLEUM.—The term ‘petroleum’ in-
cludes crude oil, tar sands, oil shale, and heavy oils. 
‘‘(24) RETIRE.—The term ‘retire’, with respect 
to an emission allowance, means to disqualify such 
emission allowance for any subsequent use. 
‘‘(25) SEQUESTERED; SEQUESTRATION.—The 
terms ‘sequestered’ and ‘sequestration’ mean the 
separation, isolation, or removal of greenhouse gases 
from the atmosphere, as determined by the Adminis-
trator. Such terms include biological, geologic, and 
mineral methods of separation, isolation, and re-
moval, but do not include ocean fertilization tech-
niques. 
‘‘(26) TON.—The term ‘ton’ means a metric 
ton. 
‘‘(27) VINTAGE YEAR.—The term ‘vintage year’ 
means the calendar year for which an emission al-
lowance is established under— 
‘‘(A) section 715; or 
‘‘(B) with respect to the establishment of 
the cost containment reserve, section 720. 
‘‘SEC. 702. ECONOMY-WIDE REDUCTION GOAL. 
‘‘It is the national goal for the United States— 
‘‘(1) to achieve net-zero greenhouse gas emis-
sions by not later than 2050; and 
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‘‘(2) for each year thereafter— 
‘‘(A) to maintain net-zero greenhouse gas 
emissions; and 
‘‘(B) seek to achieve net-negative green-
house gas emissions as determined necessary by 
the Administrator. 
‘‘SEC. 703. LABOR STANDARDS. 
‘‘The Administrator shall take such action as may be 
necessary to ensure that all laborers and mechanics em-
ployed by contractors or subcontractors on projects as-
sisted pursuant to this title, including projects funded in 
whole or in part by the proceeds from the sale of emission 
allowances or by financial incentives provided using such 
proceeds, shall be paid wages at rates not less than those 
prevailing for the same type of work on similar construc-
tion in the locality as determined by the Secretary of 
Labor, in accordance with subchapter IV of chapter 31 
of title 40, United States Code. The Secretary of Labor 
shall have, with respect to the labor standards specified 
in this section, the authority and functions set forth in 
Reorganization Plan No. 14 of 1950 (64 Stat. 1267; 5 
U.S.C. App.) and section 3145 of title 40, United States 
Code. 
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‘‘SEC. 704. REGULATIONS. 
‘‘Except as otherwise provided in this title, the Ad-
ministrator shall promulgate final regulations to carry out 
this title not later than 24 months after the date of enact-
ment of this title. 
‘‘PART B—POLLUTION LIMITATION AND 
PHASEDOWN FROM COVERED ENTITIES 
‘‘SEC. 711. AGGREGATE ENFORCEABLE TARGETS FOR COV-
ERED ENTITIES. 
‘‘(a) IN GENERAL.—The Administrator shall, by rule, 
establish targets that are enforceable under this title for 
the aggregate quantity of greenhouse gas emissions of cov-
ered entities for each calendar year beginning in 2026 
such that— 
‘‘(1) in 2026, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities is at least 
5 percent below the average annual aggregate quan-
tity of greenhouse gas emissions in 2022, 2023, and 
2024 from equivalent entities described in subsection 
(d)(1); 
‘‘(2) in 2030, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities does not 
exceed 50 percent of the aggregate quantity of 
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greenhouse gas emissions in 2005 from equivalent 
entities described in subsection (d)(2); 
‘‘(3) in 2040, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities does not 
exceed 30 percent of the aggregate quantity of 
greenhouse gas emissions in 2005 from equivalent 
entities described in subsection (d)(2); and 
‘‘(4) in 2050, the aggregate quantity of green-
house gas emissions (including attributable green-
house gas emissions) from covered entities does not 
exceed 10 percent of the aggregate quantity of 
greenhouse gas emissions in 2005 from equivalent 
entities described in subsection (d)(2). 
‘‘(b) ANNUAL REDUCTIONS.—Beginning with 2027, 
the Administrator shall, by rule, require the aggregate 
quantity of greenhouse gas emissions from covered entities 
to decline on an annual basis, by at least 2 percent of 
the aggregate quantity of greenhouse gas emissions in 
2005 from equivalent entities described in subsection 
(d)(2), until annual greenhouse gas emissions from cov-
ered entities do not exceed 10 percent of the aggregate 
quantity of greenhouse gas emissions in 2005 from equiva-
lent entities described in subsection (d)(2). Upon achiev-
ing such an annual aggregate quantity, the Administrator 
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shall ensure that any future annual quantity of green-
house gas emissions from covered entities does not exceed 
the annual aggregate quantity of greenhouse gas emis-
sions from covered entities in the preceding year. 
‘‘(c) ADDITION OF COVERED ENTITIES OR GREEN-
HOUSE GASES, OR CHANGE IN EXCHANGE VALUES.—The 
quantities calculated pursuant to subsections (a) and (b) 
may not be revised to reflect— 
‘‘(1) an entity becoming or ceasing to be a cov-
ered entity after the date of the establishment of 
targets pursuant to subsection (a); 
‘‘(2) the designation of a gas as a greenhouse 
gas pursuant to section 712 after such date; or 
‘‘(3) the revision of the carbon dioxide equiva-
lent value of any greenhouse gas pursuant to section 
713 after such date. 
‘‘(d) EQUIVALENT ENTITIES DESCRIBED.—An entity 
is an equivalent entity described in this subsection if— 
‘‘(1) for purposes of subsection (a)(1), the enti-
ty would have been a covered entity in 2022, 2023, 
or 2024, if— 
‘‘(A) the definition of a covered entity in 
section 701 had been in effect for the respective 
year; and 
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‘‘(B) the references in such definition to 
2024 were references to 2022; and 
‘‘(2) for purposes of paragraphs (2) through (4) 
of subsection (a), an entity that would have been a 
covered entity in 2005, if— 
‘‘(A) the definition of a covered entity in 
section 701 had been in effect for the respective 
year; and 
‘‘(B) the references in such definition to 
2024 were references to 2005. 
‘‘SEC. 712. 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) Any hydrofluorocarbon. 
‘‘(6) Any perfluorocarbon. 
‘‘(7) Nitrogen trifluoride. 
‘‘(8) Any other anthropogenic gas designated as 
a greenhouse gas by the Administrator under sub-
section (b). 
‘‘(b) DETERMINATION OF ADDITIONAL GREENHOUSE 
GASES.—The Administrator, by rule— 
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‘‘(1) may determine whether 1 ton of an an-
thropogenic gas makes the same or greater contribu-
tion to global warming over 100 years as 1 ton of 
carbon dioxide; 
‘‘(2) shall publish, in accordance with section 
713, the carbon dioxide equivalent value for each gas 
with respect to which the Administrator makes an 
affirmative determination under paragraph (1); 
‘‘(3) may for each gas with respect to which the 
Administrator makes an affirmative determination 
under paragraph (1) and that is used as a substitute 
for a class I or class II substance pursuant to title 
VI of this Act, determine the extent to which to reg-
ulate that gas pursuant to title VI of this Act; and 
‘‘(4) may designate as a greenhouse gas for 
purposes of this title each gas for which the Admin-
istrator makes an affirmative determination under 
paragraph (1), to the extent that it is not regulated 
pursuant to title VI or section 103 of the Consoli-
dated Appropriations Act, 2021. 
‘‘SEC. 713. CARBON DIOXIDE EQUIVALENT VALUE OF 
GREENHOUSE GASES. 
‘‘(a) MEASURE
OF QUANTITY
OF GREENHOUSE 
GASES.—Any provision of this title that refers to a quan-
tity or percentage of a quantity of a greenhouse gas means 
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the quantity or percentage of the greenhouse gas ex-
pressed in carbon dioxide equivalent. 
‘‘(b) INITIAL VALUE.—Except as revised by the Ad-
ministrator pursuant to subsection (c), the carbon dioxide 
equivalent value for purposes of this title for any green-
house gas shall be the 100-year Global Warming Potential 
for the greenhouse gas provided in the most recent assess-
ment report from the Intergovernmental Panel on Climate 
Change as of the date of enactment of this title. 
‘‘(c) PERIODIC REVISION.— 
‘‘(1) REVISION AND PUBLICATION.—Not later 
than January 1, 2030, and (except as provided in 
paragraph (3)) not less than once every 5 years 
thereafter, the Administrator shall— 
‘‘(A) revise the carbon dioxide equivalent 
value for purposes of this title for any green-
house gas to reflect the 100-year Global Warm-
ing Potential provided in the most recent as-
sessment report from the Intergovernmental 
Panel on Climate Change (or any successor or-
ganization); and 
‘‘(B) publish in the Federal Register any 
such revision. 
‘‘(2) EFFECTIVE DATE OF REVISION.—A revi-
sion published in the Federal Register under para-
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graph (1)(B) shall take effect for greenhouse gas 
emissions on January 1 of the first calendar year 
that begins at least 9 months after the date on 
which the revision was published. 
‘‘(3) DECREASE IN FREQUENCY.—The Adminis-
trator may decrease the frequency of revision under 
paragraph (1) if the Administrator determines that 
such decrease is appropriate in order to synchronize 
such revision with any similar revision process car-
ried out pursuant to the United Nations Framework 
Convention on Climate Change or to an agreement 
negotiated under that convention. 
‘‘SEC. 714. GREENHOUSE GAS REGISTRY FOR MONITORING 
AND REPORTING. 
‘‘(a) REPORTING ENTITY.—In this section, the term 
‘reporting entity’ means an entity that is— 
‘‘(1) a covered entity; 
‘‘(2) an entity that is required to report under 
part 98 of title 40, Code of Federal Regulations (or 
any successor regulations); 
‘‘(3) an entity that receives emission allowances 
under section 723; or 
‘‘(4) any other entity that the Administrator de-
termines to be a reporting entity for purposes of this 
title. 
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‘‘(b) REGULATIONS.— 
‘‘(1) IN GENERAL.—Not later than 6 months 
after the date of enactment of this title, the Admin-
istrator shall issue regulations establishing a Federal 
greenhouse gas registry. 
‘‘(2) REPORTING.—Except as provided in para-
graphs (3) and (4), such regulations— 
‘‘(A) shall require reporting entities to re-
port to the Administrator consistent with part 
98 of title 40, Code of Federal Regulations (or 
any successor regulations); 
‘‘(B) may include reporting requirements 
that are additional to the requirements under 
such part 98 of title 40, Code of Federal Regu-
lations (or any successor regulations), as deter-
mined appropriate by the Administrator to im-
plement this title; and 
‘‘(C) shall ensure the completeness, con-
sistency, transparency, accuracy, precision, and 
reliability of data included in the Federal green-
house gas registry. 
‘‘(3) TIMING.—For calendar year 2026 and 
each subsequent calendar year, each reporting entity 
shall submit annually data required under this sec-
tion to the Administrator not later than 60 days 
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after the end of the applicable calendar year, except 
when the data is already being reported to the Ad-
ministrator on an earlier timeframe. 
‘‘(4) 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 time-
ly data are available to the Administrator and the 
public on the internet under other mandatory, statu-
tory Federal requirements. 
‘‘SEC. 715. EMISSION ALLOWANCES. 
‘‘(a) IN GENERAL.—The Administrator shall estab-
lish a quantity of emission allowances for each calendar 
year starting in 2026 as necessary to achieve the targets 
under section 711(a) and the reductions under section 
711(b). 
‘‘(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) EMISSION ALLOWANCES FOR EACH CALENDAR 
YEAR.— 
‘‘(1) COMPLIANCE PERIODS 1 AND 2.—Not later 
than January 1, 2026, the Administrator shall es-
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tablish the quantity of emission allowances for each 
year in compliance period 1 and compliance period 
2. 
‘‘(2) FOLLOWING TWO COMPLIANCE PERIODS.— 
Not later than July 1, 2031, and every 6 years 
thereafter, the Administrator shall establish the 
quantity of emission allowances for each calendar 
year of the following two compliance periods. When 
establishing the quantity of emission allowances 
under this paragraph for a calendar year, the Ad-
ministrator shall, consistent with subsection (a), con-
sider— 
‘‘(A) the economy-wide reduction goals es-
tablished by section 702; 
‘‘(B) the total number of emission allow-
ances in circulation, as required to be published 
by subsection 716(e); and 
‘‘(C) other factors determined appropriated 
by the Administrator. 
‘‘(3) FAILURE TO SET EMISSION ALLOWANCE 
QUANTITY.—If the Administrator fails to establish 
the quantity of emission allowances for a compliance 
period by the start of the first calendar year of the 
compliance period, the quantity of emission allow-
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ances established for each calendar year of such 
compliance period shall be the amount equal to— 
‘‘(A) the quantity of emission allowances 
established for the preceding calendar year; 
minus 
‘‘(B) the quantity of emission allowances 
that is equal to 3.5 percent of the aggregate 
quantity of greenhouse gas emissions in 2005. 
‘‘SEC. 716. PROHIBITION OF EXCESS GREENHOUSE GAS 
EMISSIONS. 
‘‘(a) PROHIBITION.—Effective January 1, 2026, a 
covered entity may not emit greenhouse gas emissions and 
have attributable greenhouse gas emissions, in combina-
tion, in excess of the quantity of greenhouse gas emissions 
represented by the number of emission allowances surren-
dered by the covered entity pursuant to subsection (b)(3) 
for the compliance period. 
‘‘(b) DEMONSTRATING
COMPLIANCE.—Except as 
otherwise provided in this section, a covered entity shall 
surrender to the Administrator for retirement— 
‘‘(1) by 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection 
(h)) of the second year of a compliance period, not 
less than the number of emission allowances needed 
to represent 50 percent of the total quantity of 
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greenhouse gas emissions and attributable green-
house gas emissions, in combination, of the covered 
entity during the first year of the compliance period; 
‘‘(2) by 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection 
(h)) of the third year of a compliance period, not 
less than the number of emission allowances (includ-
ing those surrendered pursuant to paragraph (1) for 
the compliance period) needed to represent 50 per-
cent of the total quantity of greenhouse gas emis-
sions and attributable greenhouse gas emissions, in 
combination, of the covered entity during the first 2 
years of the compliance period; and 
‘‘(3) by 12:01 a.m. on April 1 (or a later date 
established by the Administrator under subsection 
(h)) of the year following a compliance period, not 
less than the number of emission allowances (includ-
ing those surrendered pursuant to paragraphs (1) 
and (2) for the compliance period) needed to rep-
resent 100 percent of the total quantity of green-
house gas emissions and attributable greenhouse gas 
emissions, in combination, of the covered entity dur-
ing the full compliance period. 
‘‘(c) APPLICATION TO FRACTIONS OF TONS.—For 
purposes of this section, any amount less than 1 ton of 
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carbon dioxide equivalent of greenhouse gas emissions or 
attributable greenhouse gas emissions shall be treated as 
1 ton of such carbon dioxide equivalent. 
‘‘(d) RETIREMENT OF EMISSION ALLOWANCES.—As 
soon as practicable after each deadline established under 
subsection (b), the Administrator shall retire the quantity 
of emission allowances surrendered by covered entities 
pursuant to subsection (b)(3) for the compliance period. 
‘‘(e) TOTAL NUMBER OF ALLOWANCES IN CIRCULA-
TION.—As soon as practicable after the deadline described 
in subsection (b)(3), the Administrator shall publish an 
estimate of the total quantity of emission allowances held 
by all persons on the day after such deadline. 
‘‘(f) DESIGNATED REPRESENTATIVES.—The final 
regulations promulgated under section 703 shall require 
that each covered entity, and each entity holding emission 
allowances or receiving emission allowances from the Ad-
ministrator under this title, submit to the Administrator 
a certificate of representation designating a designated 
representative. 
‘‘(g) EDUCATION
AND OUTREACH.—The Adminis-
trator shall establish and carry out a program of education 
and outreach to assist covered entities in meeting the re-
quirements of this title. Such program shall include edu-
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cation with respect to using markets to effectively meet 
such requirements. 
‘‘(h) ADJUSTMENT
OF DEADLINE.—The Adminis-
trator may, by rule, establish a deadline for demonstrating 
compliance in accordance with subsection (b) later than 
the date otherwise provided in subsection (b), as necessary 
to ensure the availability of greenhouse gas emissions 
data, but in no event shall the deadline be later than June 
1 of the respective calendar year. 
‘‘SEC. 717. PENALTY FOR NONCOMPLIANCE. 
‘‘(a) EXCESS GREENHOUSE GAS EMISSIONS PEN-
ALTY.— 
‘‘(1) IN GENERAL.—A covered entity that fails 
for any year to demonstrate compliance as required 
by section 716 by the applicable deadline shall be 
liable for payment to the Administrator of a civil 
penalty in the amount described in paragraph (2). 
‘‘(2) AMOUNT.—The amount of a penalty re-
quired to be paid under paragraph (1) shall be equal 
to the product obtained by multiplying— 
‘‘(A) the number of tons of carbon dioxide 
equivalent of greenhouse gas emissions and at-
tributable greenhouse gas emissions for which 
the covered entity failed to demonstrate compli-
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ance as required by section 716 by the applica-
ble deadline; by 
‘‘(B) 3 times the auction clearing price for 
the earliest vintage year emission allowances in 
the last auction carried out pursuant to section 
720 before such deadline. 
‘‘(3) TIMING.—A penalty under this subsection 
shall be immediately due and payable to the Admin-
istrator, without demand. 
‘‘(4) NO EFFECT ON LIABILITY.—A penalty due 
and payable by a covered entity under this sub-
section may not diminish the liability of the covered 
entity for any fine, penalty, or assessment against 
the covered entity for the same violation under any 
other provision of this Act or any other law. 
‘‘(b) EXCESS EMISSIONS ALLOWANCES.—A covered 
entity that fails to demonstrate compliance for any year, 
as described in subsection (a)(1), shall be liable to offset 
the covered entity’s excess greenhouse gases emissions and 
attributable greenhouse gas emissions by an equal quan-
tity of emission allowances during the year after the year 
in which such failure to demonstrate compliance occurred, 
or such longer period as the Administrator may prescribe. 
‘‘(c) TREATMENT
AS SEPARATE VIOLATION.—For 
purposes of this section, each ton of carbon dioxide equiva-
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lent for which a covered entity fails to demonstrate compli-
ance as required by section 716 shall be treated as a sepa-
rate violation. 
‘‘SEC. 718. TRACKING SYSTEM. 
‘‘The final regulations promulgated under section 
703 shall include a system for issuing, recording, holding, 
and tracking emission allowances. Such system shall pro-
vide for appropriate publication of the information in the 
system on the internet. 
‘‘SEC. 719. PROGRAM FLEXIBILITY. 
‘‘(a) PERMITTED TRANSACTIONS.—Except as other-
wise provided in this title, the lawful holder of an emission 
allowance may— 
‘‘(1) without restriction, sell, exchange, or 
transfer the emission allowance; 
‘‘(2) subject to subsection (c), hold the emission 
allowance; and 
‘‘(3) request that the Administrator retire the 
emission allowance. 
‘‘(b) BANKING.—An emission allowance may be used 
to comply with section 716 for emissions in— 
‘‘(1) the vintage year for the emission allow-
ance; or 
‘‘(2) any calendar year subsequent to the vin-
tage year for the emission allowance. 
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‘‘(c) HOLDING LIMIT.—Beginning after compliance 
period 1, a covered entity may retain emission allowances 
issued for vintage years in previous compliance periods 
representing no more than 100 percent of the total quan-
tity of greenhouse gas emissions and attributable green-
house gas emissions, in combination, of the covered entity 
during the preceding compliance period. 
‘‘(d) NO RESTRICTION
ON TRANSACTIONS.—The 
privilege of purchasing, holding, selling, exchanging, 
transferring, and requesting retirement of emission allow-
ances may not be restricted to covered entities, except as 
otherwise provided in this title. 
‘‘SEC. 720. AUCTION PROCEDURES. 
‘‘(a) IN GENERAL.—For each calendar year for which 
the Administrator establishes emission allowances under 
section 715, the Administrator shall auction emission al-
lowances in accordance with the following: 
‘‘(1) FREQUENCY; FIRST
AUCTION.—Auctions 
shall be conducted quarterly, with the first auction 
to be conducted not later than March 31, 2026. 
‘‘(2) AUCTION SCHEDULE; CURRENT AND FU-
TURE VINTAGES.—The Administrator— 
‘‘(A) at each quarterly auction under this 
section, shall offer both a portion of the emis-
sion allowances for the same vintage year as the 
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year in which the auction is being conducted 
and a portion of the emission allowances for fu-
ture vintage years; 
‘‘(B) may offer at any auction under this 
section emission allowances for vintage years of 
up to 6 years after the year in which the auc-
tion is being conducted; and 
‘‘(C) during a vintage year, shall make 
available for auction not less than 50 percent of 
the emission allowances established under sec-
tion 715 for the vintage year, including any 
such emissions allowances— 
‘‘(i) auctioned on consignment pursu-
ant to section 721; or 
‘‘(ii) made available for auction from 
the emissions containment reserve. 
‘‘(3) AUCTION FORMAT.—Auctions shall follow 
a single-round, sealed-bid, uniform price format. 
‘‘(4) PARTICIPATION; FINANCIAL ASSURANCE.— 
Auctions shall be open to any person, except that 
the Administrator may establish financial assurance 
requirements to ensure that auction participants will 
perform on their bids. 
‘‘(5) DISCLOSURE
OF
BENEFICIAL
OWNER-
SHIP.—Each bidder in an auction shall be required 
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to disclose the person or entity sponsoring or bene-
fiting from the bidder’s participation in the auction 
if such person or entity is, in whole or in part, other 
than the bidder. 
‘‘(6) PURCHASE LIMITS.—No person may, di-
rectly or in concert with one or more other partici-
pants, purchase more than 5 percent of the emission 
allowances offered at any quarterly auction. 
‘‘(7) PUBLICATION OF INFORMATION.—After an 
auction, the Administrator shall, in a timely fashion, 
publish the identities of winning bidders, the quan-
tity of emission allowances obtained by each winning 
bidder, and the auction clearing price determined by 
the Administrator. 
‘‘(b) REGULATIONS.— 
‘‘(1) INITIAL REGULATIONS.—Not later than 12 
months after the date of enactment of this title, the 
Administrator, in consultation with other Federal 
agencies, as appropriate, shall promulgate regula-
tions governing the auction of emission allowances 
under this section and section 721. 
‘‘(2) REVISED REGULATIONS.—Not earlier than 
January 1, 2029, the Administrator may, in con-
sultation with other Federal agencies, as appro-
priate, at any time, revise the initial regulations pro-
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mulgated under paragraph (1). Such revised regula-
tions need not meet the requirements identified in 
subsection (a) if the Administrator determines that 
an alternative auction design would be more effec-
tive, taking into account factors including costs of 
administration, transparency, fairness, and risks of 
collusion or manipulation. In determining whether 
and how to revise the initial regulations, the Admin-
istrator may not consider maximization of revenues 
to the Federal Government. 
‘‘(3) OTHER
REQUIREMENTS.—The Adminis-
trator may include in the regulations under this sub-
section such other requirements or provisions as the 
Administrator, in consultation with other Federal 
agencies, as appropriate, considers appropriate to 
promote effective, efficient, transparent, and fair ad-
ministration of auctions. 
‘‘(c) MINIMUM PRICE.—The minimum price for any 
emission allowance auctioned under this section shall be 
$15 for any auction occurring in calendar year 2026. The 
minimum price for an emission allowance auctioned under 
this section for any auction occurring after calendar year 
2026 shall be— 
‘‘(1) the minimum price applicable under this 
subsection for the previous calendar year; plus 
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‘‘(2) the dollar amount that is equal to— 
‘‘(A) such minimum price; multiplied by 
‘‘(B) the percent that is the sum of— 
‘‘(i) 5 percent; plus 
‘‘(ii) the percentage change in the 
Consumer Price Index (for all urban con-
sumers) for the previous calendar year. 
‘‘(d) COST CONTAINMENT RESERVE.— 
‘‘(1) IN GENERAL.—The Administrator shall— 
‘‘(A) establish a cost containment reserve; 
‘‘(B) deposit into such reserve emission al-
lowances established pursuant to paragraph (2) 
and emission allowances described in subsection 
(e)(4); and 
‘‘(C) make available for auction allowances 
in such reserve in accordance with paragraph 
(4). 
‘‘(2) DEPOSITS INTO RESERVE.— 
‘‘(A) FILLING THE RESERVE INITIALLY.— 
The Administrator shall establish, and deposit 
into the cost containment reserve, a quantity of 
emission allowances equal to the average annual 
aggregate quantity of greenhouse gas emissions 
in calendar years 2022, 2023, and 2024 from 
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equivalent entities described in section 711(d) 
for the respective calendar years. 
‘‘(B) REFILLING
THE
RESERVE.—Fol-
lowing any auction under this section, if any 
emission allowances that were offered at the 
auction were not purchased, the Administrator 
shall— 
‘‘(i) deposit a quantity, as determined 
appropriate by the Administrator, of such 
emission allowances in the cost contain-
ment reserve; and 
‘‘(ii) retire the remaining quantity of 
such emission allowances. 
‘‘(C) SPECIAL RULE.—If any emission al-
lowances established pursuant to subparagraph 
(A) remain in the cost containment reserve, the 
Administrator shall retire one such emission al-
lowance for each emission allowance deposited 
into the reserve under subparagraph (B). 
‘‘(3) PRICE TRIGGERS.— 
‘‘(A) 
ANNUAL
DETERMINATION.—Each 
calendar year, the Administrator shall set at 
least two price triggers at which, if the auction 
clearing price for an auction under this section 
would meet or exceed the price trigger, the Ad-
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ministrator may offer at such auction emission 
allowances from the cost containment reserve. 
‘‘(B) LOWEST PRICE TRIGGER.—The Ad-
ministrator may not set a price trigger under 
subparagraph (A) for a calendar year that is 
less than 4 multiplied by the minimum price of 
an emission allowance for that calendar year 
under subsection (c). 
‘‘(4) RELEASE OF EMISSION ALLOWANCES.—If 
the auction clearing price for an auction conducted 
under this section meets or exceeds a price trigger 
set under paragraph (3), the Administrator may, 
with respect to such a price trigger, offer at such 
auction up to 5 percent of the emission allowances 
in the cost containment reserve at the beginning of 
the calendar year. For any auction under this sec-
tion, the Administrator may not offer more than 10 
percent of the emission allowances in the cost con-
tainment reserve. 
‘‘(e) EMISSIONS CONTAINMENT RESERVE.— 
‘‘(1) IN GENERAL.—The Administrator shall— 
‘‘(A) establish an emissions containment 
reserve; 
‘‘(B) each calendar year, deposit into such 
reserve 10 percent of the emission allowances 
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established under section 715 for such calendar 
year; and 
‘‘(C) make available for auction emission 
allowances in such reserve pursuant to para-
graph (3). 
‘‘(2) PRICE TRIGGERS.— 
‘‘(A) 
ANNUAL
DETERMINATION.—Each 
calendar year, the Administrator shall set at 
least two price triggers at which, if the auction 
clearing price for an auction under this section 
would meet or exceed the price trigger, the Ad-
ministrator will make available for auction 
emission allowances from the emissions contain-
ment reserve. 
‘‘(B) LOWEST PRICE TRIGGER.—The Ad-
ministrator may not set a price trigger under 
subparagraph (A) for a calendar year that is 
less than 125 percent of the minimum price of 
an emission allowance for that calendar year 
under subsection (c). 
‘‘(3) RELEASE OF EMISSION ALLOWANCES.—At 
any auction under this section, the Administrator— 
‘‘(A) may not offer more than 25 percent 
of the emission allowances deposited into the 
emissions containment reserve for the respective 
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calendar year at any of the auctions under this 
section in such calendar year; and 
‘‘(B) for each price trigger met or exceeded 
by the auction clearing price, the Administrator 
may offer up to 12.5 percent of the emission al-
lowances deposited into the emissions contain-
ment reserve for the respective calendar year. 
‘‘(4) ALLOWANCES NOT PURCHASED.—At the 
end of each calendar year, any emission allowance in 
the emissions containment reserve offered but not 
purchased at auction may be deposited into the cost 
containment 
reserve 
pursuant 
to 
subsection 
(d)(2)(B). 
‘‘(f) PUBLIC AUCTION INFORMATION.—Prior to the 
first auction under this section each calendar year, the Ad-
ministrator shall publish the following: 
‘‘(1) The minimum price for an emission allow-
ance for such calendar year under subsection (c). 
‘‘(2) The number of emission allowances of each 
vintage year to be offered at each auction in such 
calendar year. 
‘‘(3) The number and dollar amounts of the 
price triggers for such calendar year for the cost 
containment reserve established under subsection 
(d). 
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‘‘(4) The number and dollar amounts of the 
price triggers for such calendar year for the emis-
sions containment reserve established under sub-
section (e). 
‘‘(5) Any additional information determined to 
be appropriate by the Administrator. 
‘‘(g) DELEGATION
OR CONTRACT.—The Adminis-
trator may by delegation or contract provide for the con-
duct of auctions under this section under the Administra-
tor’s supervision— 
‘‘(1) by other departments or agencies of the 
Federal Government; or 
‘‘(2) by nongovernmental agencies, groups, or 
organizations. 
‘‘SEC. 721. CONSIGNMENT AUCTIONS. 
‘‘(a) VOLUNTARY CONSIGNMENT.—Any entity hold-
ing emission allowances may request that the Adminis-
trator make available for auction under section 720 the 
emission allowances on consignment. 
‘‘(b) MANDATORY CONSIGNMENT.— 
‘‘(1) CONDITIONAL ALLOCATIONS.—Before any 
emission allowance allocated under subsection (a) or 
(b) of section 722 (including any emission allowance 
transferred to a covered entity pursuant to section 
722(a)(3)(B) or section 722(a)(6)(B)(ii)) may be 
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sold, further transferred, retired, or used to dem-
onstrate compliance under section 716, such emis-
sion allowance shall be made available for auction on 
consignment pursuant to this section and section 
720. 
‘‘(2) TRANSPARENCY.—The Administrator shall 
publish— 
‘‘(A) the names of entities holding emission 
allowances that are made available for auction 
on consignment pursuant to paragraph (1); 
‘‘(B) the quantities of emission allowances 
that are so made available for auction; and 
‘‘(C) any additional information relating to 
emission allowances that are so made available 
for auction, as determined by the Adminis-
trator. 
‘‘(c) PROCEEDS.—Notwithstanding section 3302 of 
title 31, United States Code— 
‘‘(1) the Federal Government shall, not later 
than 90 days after receipt of the proceeds from any 
auction on consignment pursuant to subsection 
(b)(1), transfer such proceeds to the entity that re-
quested the Administrator offer the respective emis-
sion allowances at an auction under section 720; and 
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‘‘(2) no such proceeds shall be held by any offi-
cer or employee of the United States or treated for 
any purpose as public monies. 
‘‘(d) UNSOLD EMISSION ALLOWANCES.—The Admin-
istrator shall return to the entity offering an emission al-
lowance at auction on consignment pursuant to this sec-
tion any such allowance that is not sold at the auction. 
‘‘SEC. 722. ALLOCATION OF EMISSION ALLOWANCES. 
‘‘(a) FOR THE BENEFIT OF CONSUMERS.— 
‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2026, the Administrator shall allocate emission 
allowances established each calendar year under sec-
tion 715(a) to States and Indian Tribes in the fol-
lowing amounts: 
‘‘(A) For compliance period 1, 30 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(B) For compliance period 2, 27 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(C) For compliance period 3, 24 percent 
of the emission allowances established for each 
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year of such compliance period under section 
715(a). 
‘‘(D) For compliance period 4, 21 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(E) For compliance period 5, 18 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(F) For compliance period 6, 15 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(G) For compliance period 7, 12 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(H) For compliance period 8, 9 percent of 
the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(I) For compliance period 9, 6 percent of 
the emission allowances established for each 
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year of such compliance period under section 
715(a). 
‘‘(J) For compliance period 10, 3 percent 
of the emission allowances established for each 
year of such compliance period under section 
715(a). 
‘‘(K) For each subsequent compliance pe-
riod, 0 percent of the emission allowances es-
tablished for each year of such compliance peri-
ods under section 715(a). 
‘‘(2) DISTRIBUTION.—Not later than December 
31 of each year, the Administrator shall distribute 
among States and Indian Tribes the quantity of 
emission allowances allocated under paragraph (1) 
for the following vintage year, ratably based on the 
ratio of— 
‘‘(A) the aggregate quantity of greenhouse 
gases emitted within a jurisdiction in the sec-
ond preceding vintage year associated with the 
combustion of fuels for— 
‘‘(i) electricity generation; and 
‘‘(ii) residential and commercial end 
uses of fuels, excluding end uses related to 
transportation; to 
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‘‘(B) the aggregate quantity of greenhouse 
gases emitted within the United States in the 
second preceding vintage year associated with 
the combustion of fuels for— 
‘‘(i) electricity generation; and 
‘‘(ii) residential and commercial end 
uses of fuels, excluding end uses related to 
transportation. 
‘‘(3) USE OF EMISSION ALLOWANCES.—States 
and Indian Tribes shall— 
‘‘(A) sell, on consignment in accordance 
with section 721, the emission allowances allo-
cated under this subsection and use the pro-
ceeds of such sales exclusively for the benefit of 
consumers of electricity and residential and 
commercial end users of fuels by carrying out 
a— 
‘‘(i) cost-effective energy efficiency 
program to reduce the use of electricity 
and fuel; 
‘‘(ii) rebate or other financial incen-
tive program to encourage adoption and 
use of low-emission fuel alternatives, which 
may include a program that provides for 
electrification; or 
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‘‘(iii) rebate or other direct financial 
assistance program, which may include a 
low-income ratepayer assistance program; 
or 
‘‘(B) transfer, on a nonreimburseable 
basis, such emission allowances to one or more 
covered entities responsible for greenhouse gas 
emissions or attributable greenhouse gas emis-
sions within the jurisdiction of the State or In-
dian Tribe to be used by such entities exclu-
sively for the benefit of consumers of electricity 
and residential and commercial end users of 
fuels. 
‘‘(4) ADMINISTRATIVE EXPENSES.—States and 
Indian Tribes may use up to 5 percent of the pro-
ceeds from the sale of emission allowances allocated 
under this subsection for administrative purposes in 
carrying out programs under paragraph (3). 
‘‘(5) REPORTING.—Each State and Indian 
Tribe receiving emission allowances under this sub-
section shall submit to the Administrator, not later 
than 12 months after each receipt of such emission 
allowances, a report, in accordance with such re-
quirements as the Administrator may prescribe, 
that— 
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‘‘(A) describes the use of emission allow-
ances sold or transferred under paragraph (3), 
including a description of the energy efficiency, 
fuel switching, and consumer assistance pro-
grams supported pursuant to paragraph (3); 
‘‘(B) includes an evaluation, prepared by 
an independent third party, of the performance 
of the energy efficiency, fuel switching, and con-
sumer assistance programs supported pursuant 
to paragraph (3); and 
‘‘(C) describes any transfer of emission al-
lowances to covered entities under paragraph 
(3)(B). 
‘‘(6) ENFORCEMENT.—If the Administrator de-
termines a State or Indian Tribe is not in compli-
ance with this subsection, the Administrator may— 
‘‘(A)(i) withhold a portion of emission al-
lowances under this subsection that would oth-
erwise be distributed to the State or Indian 
Tribe for the next vintage year; and 
‘‘(ii) distribute such withheld emission al-
lowances among the remaining States and In-
dian Tribes ratably in accordance with the for-
mula under paragraph (2); or 
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‘‘(B)(i) withhold a portion of emission al-
lowances under this subsection that would oth-
erwise be distributed to the State or Indian 
Tribe for the next vintage year; and 
‘‘(ii) 
directly 
transfer, 
on 
a 
nonreimburseable basis, such withheld emission 
allowances to one or more covered entities re-
sponsible for greenhouse gas emissions or at-
tributable greenhouse gas emissions within the 
jurisdiction of such State or Indian Tribe to be 
used by such entities exclusively for the benefit 
of consumers as described in paragraph (3)(A). 
‘‘(b) ENERGY-INTENSIVE, TRADE-EXPOSED INDUS-
TRIES.— 
‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2026, the Administrator shall allocate emission 
allowances to eligible industry sectors designated 
and listed under section 723(a)(1), to be distributed 
in accordance with section 723, in the following 
amounts: 
‘‘(A) For compliance periods 1 and 2, 15 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
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‘‘(B) For compliance periods 3 and 4, 12 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(C) For compliance periods 5 and 6, 9 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(D) For compliance periods 7 and 8, 6 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(E) For compliance periods 9 and 10, 3 
percent of the emission allowances established 
for each year of such compliance periods under 
section 715(a). 
‘‘(F) For each subsequent compliance pe-
riod, 0 percent of the emission allowances es-
tablished for each year of such compliance peri-
ods under section 715(a). 
‘‘(2) CARRYOVER.—After the Administrator dis-
tributes emission allowances pursuant to section 723 
for any vintage year, any emission allowances allo-
cated to eligible industry sectors designated and list-
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ed under section 723(a)(1) pursuant to this sub-
section that have not been so distributed shall— 
‘‘(A) remain available for distribution pur-
suant to section 723 for the following vintage 
year; and 
‘‘(B) be treated as part of the allocation to 
such entities for that following vintage year. 
‘‘(c) LOW-INCOME
CONSUMERS.—Beginning with 
vintage year 2026, the Administrator shall make available 
for auction, pursuant to section 720, 15 percent of the 
emission allowances established for each year under sec-
tion 715(a). The proceeds from such auction shall be made 
available to the Secretary of the Treasury to provide re-
bates under section 102 of the Climate Pollution Standard 
and Community Investment Act of 2024. 
‘‘(d) STATE, TERRITORIAL, AND TRIBAL GOVERN-
MENTS.—Beginning with vintage year 2026, the Adminis-
trator shall make available for auction, pursuant to section 
720, 10 percent of the emission allowances established for 
each year under section 715(a), with the proceeds distrib-
uted to States and Indian Tribes pursuant to section 724. 
‘‘(e) LOCAL GOVERNMENTS.—Beginning with vintage 
year 2026, the Administrator shall make available for auc-
tion, pursuant to section 720, 5 percent of the emission 
allowances established for each year under section 715(a). 
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The proceeds from such auction shall be made available 
to the Secretary of Energy to carry out subtitle E of title 
V of the Energy Independence and Security Act of 2007. 
‘‘(f) JURISDICTIONS
HOSTING
HIGH-LEVEL
NU-
CLEAR WASTE.— 
‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2026, the Administrator shall make available 
for auction, pursuant to section 720, 0.5 percent of 
the emission allowances established for each year 
under section 715(a), with the proceeds provided to 
each State and Indian Tribe for which a repository 
where high-level radioactive waste and spent nuclear 
fuel are permanently disposed of is located within 
the jurisdiction of the State or Indian Tribe. 
‘‘(2) NO ELIGIBLE STATE OR INDIAN TRIBE.— 
If no State or Indian Tribe is eligible to be provided 
proceeds under this subsection with respect to a vin-
tage year, such proceeds shall be provided to States 
and Indian Tribes pursuant to section 724. 
‘‘(3) MULTIPLE STATES OR INDIAN TRIBES.—If 
more than one State or Indian Tribe is eligible for 
proceeds under this subsection with respect to a vin-
tage year, such proceeds shall be distributed ratably 
among such States and Indian Tribes based on the 
ratio of— 
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‘‘(A) the mass of high-level radioactive 
waste and spent nuclear fuel permanently dis-
posed of within the jurisdictions of the respec-
tive States or Indian Tribes; relative to 
‘‘(B) the mass of high-level radioactive 
waste and spent nuclear fuel permanently dis-
posed of in the United States. 
‘‘(g) WORKER AND COMMUNITY ASSISTANCE.— 
‘‘(1) IN
GENERAL.—Beginning with vintage 
year 2026, the Administrator shall make available 
for auction, pursuant to section 720, 5 percent of 
the emission allowances established for each year 
under section 715(a), with the proceeds deposited 
into the Worker and Community Assistance Fund 
established under section 103 of the Climate Pollu-
tion Standard and Community Investment Act of 
2024. 
‘‘(2) DETERMINATION
OF
ADDITIONAL
REVE-
NUES NEEDED.—For any year, the Administrator, 
in consultation with the Secretary of the Treasury, 
the Secretary of Labor, and the Director of the Of-
fice of Energy and Economic Transition as estab-
lished by section 203 of the Climate Pollution 
Standard and Community Investment Act of 2024— 
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‘‘(A) may determine that additional rev-
enue is necessary to carry out sections 206, 
207, and 208 of the Climate Pollution Standard 
and Community Investment Act of 2024; and 
‘‘(B) if emission allowances are available 
and upon a determination under subparagraph 
(A), may offer at an auction pursuant to sec-
tion 720, in addition to the emission allowances 
made available for auction pursuant to para-
graph (1), up to 5 percent of emissions allow-
ances established for such year under section 
715(a), with the proceeds deposited into the 
Worker and Community Assistance Fund estab-
lished under section 103 of the Climate Pollu-
tion Standard and Community Investment Act 
of 2024. 
‘‘(h) FRONTLINE COMMUNITIES.—Beginning with 
vintage year 2026, the Administrator shall make available 
for auction, pursuant to section 720, 10 percent of the 
emission allowances established for each year under sec-
tion 715(a), with the proceeds deposited into the Cleaner 
Air Community Fund established under section 104 of the 
Climate Pollution Standard and Community Investment 
Act of 2024. 
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‘‘(i) NEGATIVE EMISSIONS ACTIVITIES.—The Admin-
istrator shall make available for auction, pursuant to sec-
tion 720, emission allowances established for each year 
under section 715(a), with the proceeds deposited into the 
Negative Emissions Activities Fund established under sec-
tion 105 of the Climate Pollution Standard and Commu-
nity Investment Act of 2024, in the following amounts: 
‘‘(1) For compliance periods 1 and 2, 2.5 per-
cent of the emission allowances established for each 
year of such compliance periods under section 
715(a). 
‘‘(2) For compliance periods 3 and 4, 5 percent 
of the emission allowances established for each year 
of such compliance periods under section 715(a). 
‘‘(3) For compliance periods 5 and 6, 7.5 per-
cent of the emission allowances established for each 
year of such compliance periods under section 
715(a). 
‘‘(4) For compliance periods 7 and 8, 10 per-
cent of the emission allowances established for each 
year of such compliance periods under section 
715(a). 
‘‘(5) For compliance periods 9 and 10, 15 per-
cent of the emission allowances established for each 
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year of such compliance periods under section 
715(a). 
‘‘(6) For each subsequent compliance period, 20 
percent of the emission allowances established for 
each year of such compliance period under section 
715(a). 
‘‘(j) ENERGY INNOVATION FUND.—Beginning with 
vintage year 2026, the Administrator shall make available 
for auction, pursuant to section 720, 2.5 percent of the 
emission allowances established for each year under sec-
tion 715(a), with the proceeds deposited into the Energy 
Innovation Fund established under section 106 of the Cli-
mate Pollution Standard and Community Investment Act 
of 2024. 
‘‘SEC. 723. OUTPUT-BASED DISTRIBUTIONS FOR ENERGY-IN-
TENSIVE, TRADE-EXPOSED INDUSTRIES. 
‘‘(a) DESIGNATION OF ELIGIBLE INDUSTRIAL SEC-
TORS.— 
‘‘(1) IN GENERAL.—The Administrator shall— 
‘‘(A) designate (using the six-digit classi-
fication system of the North American Indus-
trial Classification System of 2002 or a super-
seding classification system) eligible industrial 
sectors based on the criteria described in para-
graph (3); and 
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‘‘(B) maintain a list of such eligible indus-
trial sectors. 
‘‘(2) ELIGIBLE INDUSTRIAL SECTOR LIST.— 
‘‘(A) INITIAL LIST.—Not later than June 
30, 2025, the Administrator shall publish in the 
Federal Register a list of eligible industrial sec-
tors designated under this subsection. 
‘‘(B) SUBSEQUENT LISTS.—Not later than 
June 30, 2031, and not less than every 6 years 
thereafter, the Administrator shall publish in 
the Federal Register an updated version of the 
list published under subparagraph (A). 
‘‘(3) ELIGIBILITY CRITERIA.— 
‘‘(A) IN GENERAL.—To be designated as 
an eligible industrial sector under this sub-
section, an industrial sector shall meet the cri-
teria in— 
‘‘(i) both subparagraphs (B) and (C); 
or 
‘‘(ii) subparagraph (D). 
‘‘(B) ENERGY OR GREENHOUSE GAS IN-
TENSITY.—An industrial sector meets the cri-
teria in this subparagraph if the sector has— 
‘‘(i) an energy intensity of at least 5 
percent, calculated by dividing— 
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‘‘(I) the cost of purchased elec-
tricity and fuel of such sector; by 
‘‘(II) the value of the shipments 
of such sector; or 
‘‘(ii) a greenhouse gas intensity of at 
least 5 percent, calculated by dividing— 
‘‘(I) the number of tons of green-
house gas emissions (including direct 
emissions from fuel combustion, proc-
ess emissions, and indirect emissions 
from the generation of electricity used 
to produce the output of the sector) of 
such sector, multiplied by 20; by 
‘‘(II) the value of the shipments 
of such sector. 
‘‘(C) TRADE
INTENSITY.—An industrial 
sector meets the criteria in this subparagraph if 
the sector has a trade intensity of at least 15 
percent, calculated by dividing— 
‘‘(i) the value of the imports and ex-
ports of such sector; by 
‘‘(ii) the sum of the value of the ship-
ments and the value of imports of such 
sector. 
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‘‘(D) VERY
HIGH
ENERGY
OR
GREEN-
HOUSE GAS INTENSITY.—An industrial sector 
meets the criteria in this subparagraph if the 
sector has— 
‘‘(i) an energy intensity of at least 20 
percent, as calculated under subparagraph 
(B)(i); or 
‘‘(ii) a greenhouse gas intensity of at 
least 20 percent, as calculated under sub-
paragraph (B)(ii). 
‘‘(4) USE OF DATA.—When determining the eli-
gibility of an industrial sector, or a subgroup of enti-
ties within an industrial sector, under this sub-
section— 
‘‘(A) the Administrator shall use the aver-
age annual data for the most recent 4 years for 
which such data are available; 
‘‘(B) if data are unavailable for any indus-
trial sector at the six-digit classification level 
referred to in paragraph (1)(A), the Adminis-
trator may extrapolate the information nec-
essary to determine the eligibility of a sector 
from available data pertaining to a broader in-
dustrial category classified in— 
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‘‘(i) the North American Industrial 
Classification System of 2002; or 
‘‘(ii) a superseding classification sys-
tem; 
‘‘(C) the Administrator may request any 
additional information, as determined necessary 
by the Administrator, from any owner or oper-
ator of an entity in a potentially eligible indus-
trial sector; and 
‘‘(D) the Administrator shall seek informa-
tion from the owner or operator of an entity in 
a potentially eligible industrial sector that pro-
duces more than one product at a facility in 
order to attribute energy usage and greenhouse 
gas emissions associated with the production of 
each product type. 
‘‘(5) LISTING OF SUBGROUPS AS AN ELIGIBLE 
INDUSTRIAL SECTOR.— 
‘‘(A) DESIGNATION OF SUBGROUPS.—The 
Administrator may, pursuant to paragraph (1), 
designate and list a subgroup of entities within 
an industrial sector as a separate eligible indus-
trial sector if the subgroup of entities meets the 
eligibility criteria in paragraph (3)(A) for des-
ignation as an eligible industrial sector. 
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‘‘(B) DETERMINATION.—In determining 
under paragraph (3)(A) whether a subgroup of 
entities meets the criteria under subparagraphs 
(B) and (C) or (D) of such paragraph, the Ad-
ministrator shall consider— 
‘‘(i) the energy intensity, greenhouse 
gas intensity, and trade intensity of the in-
dustrial sector represented by such sub-
group of entities; and 
‘‘(ii) the products manufactured by 
the subgroup and not the industrial proc-
ess by which such products are manufac-
tured, except that the Administrator may 
determine a subgroup of entities that man-
ufacture a product primarily from virgin 
material to be listed as a separate eligible 
industrial sector from another subgroup of 
entities that manufacture the same product 
primarily from recycled material. 
‘‘(6) INDIVIDUAL PETITION FOR ELIGIBILITY.— 
‘‘(A) PETITION.—The owner or operator of 
an entity in an industrial sector may petition 
the Administrator to designate, pursuant to 
paragraph (5), one or more entities in such in-
dustrial sector as an eligible industrial sector. 
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‘‘(B) FINAL
ACTION.—Not later than 6 
months after the receipt of a petition under 
subparagraph (A), the Administrator shall take 
final action on such petition. 
‘‘(7) SPECIAL CASES.— 
‘‘(A) IRON AND STEEL SECTOR.—For pur-
poses of this section, the Administrator shall 
consider as being in different industrial sec-
tors— 
‘‘(i) entities using integrated iron and 
steelmaking technologies (including coke 
ovens, 
blast 
furnaces, 
and 
other 
ironmaking technologies); and 
‘‘(ii) entities using electric arc furnace 
technologies. 
‘‘(B) METAL, SODA ASH, OR PHOSPHATE 
PRODUCTION CLASSIFIED UNDER MORE THAN 
ONE NAICS CODE.—For purposes of this sec-
tion, the Administrator— 
‘‘(i) may not aggregate data for the 
beneficiation or other processing (including 
agglomeration) of metal ores, soda ash, or 
phosphate with subsequent steps in the 
process of metal, soda ash, or phosphate 
manufacturing; 
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‘‘(ii) shall consider the beneficiation or 
other processing (including agglomeration) 
of metal ores, soda ash, or phosphate to be 
in separate industrial sectors from the 
metal, soda ash, or phosphate manufac-
turing sectors; and 
‘‘(iii) shall treat industrial sectors that 
beneficiate or otherwise process (including 
agglomeration) metal ores, soda ash, or 
phosphate as ineligible to receive emission 
allowances under this section related to the 
activity of extracting metal ores, soda ash, 
or phosphate. 
‘‘(C) PETROLEUM
REFINING.—Industrial 
sectors that refine petroleum products may not 
be designated and listed as an eligible industrial 
sector under this section. 
‘‘(b) OUTPUT-BASED ALLOCATION BENCHMARKS.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
determine the average greenhouse gas emissions per 
unit of output for each eligible industrial sector des-
ignated and listed under subsection (a)(1) (referred 
to in this subsection as the ‘output-based allocation 
benchmark’ for such sector). 
‘‘(2) CALCULATING BENCHMARK.— 
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‘‘(A) IN
GENERAL.—The Administrator 
shall calculate the output-based allocation 
benchmark for each eligible industrial sector 
based on the greenhouse gas emissions, includ-
ing direct emissions, process emissions, and in-
direct emissions, expressed in tons of carbon di-
oxide equivalent, per unit of output, for such el-
igible industrial sector using an average of the 
3 most recent years of the best available data 
for such eligible industrial sector. 
‘‘(B) 
CALCULATING
INDIRECT
EMIS-
SIONS.—Each person selling electricity to the 
owner or operator of an entity in an eligible in-
dustrial sector shall— 
‘‘(i) provide the owner or operator of 
the entity and the Administrator relevant 
greenhouse gas emissions data for such en-
tity; and 
‘‘(ii) where it is not possible to deter-
mine the precise indirect greenhouse gas 
emissions for such entity, use the monthly 
average data reported by the Energy Infor-
mation Administration or collected and re-
ported for the electric utility serving the 
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entity to determine greenhouse gas emis-
sions. 
‘‘(C) MULTIPLE
ELIGIBLE
INDUSTRIAL 
SECTORS
AT
ONE
FACILITY.—The Adminis-
trator shall seek information from the owner or 
operator of an entity in an eligible industrial 
sector that produces more than one product at 
a facility in order to attribute energy usage and 
greenhouse gas emissions associated with the 
production of each product type at such facility. 
‘‘(3) DATA SOURCES.—For the purposes of this 
subsection, the Administrator— 
‘‘(A) shall use data— 
‘‘(i) reported to the Environmental 
Protection Agency; 
‘‘(ii) reported to other Federal agen-
cies; and 
‘‘(iii) from each owner or operator of 
an entity in an eligible industrial sector; 
and 
‘‘(B) may require an owner or operator of 
an entity in an eligible industrial sector to pro-
vide such information as the Administrator 
finds necessary to determine the output-based 
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allocation benchmark for such eligible industrial 
sector. 
‘‘(c) DISTRIBUTION OF EMISSION ALLOWANCES.— 
‘‘(1) IN GENERAL.—For each vintage year, the 
Administrator shall— 
‘‘(A) distribute pursuant to this section 
emission allowances allocated under section 
722(b), not later than October 31 of the pre-
ceding calendar year; and 
‘‘(B) make such annual distributions to the 
owner or operator of each entity responsible for 
output in an eligible industrial sector listed 
under subsection (a) in the amount of emission 
allowances calculated under this subsection. 
‘‘(2) ASSISTANCE FACTOR.—For the purpose of 
distributing emission allowances under this sub-
section, the Administrator shall use the following 
(referred to in this subsection as an ‘assistance fac-
tor’): 
‘‘(A) For compliance period 1, 1.0. 
‘‘(B) For compliance period 2, 0.9. 
‘‘(C) For compliance period 3, 0.8. 
‘‘(D) For compliance period 4, 0.7. 
‘‘(E) For compliance period 5, 0.6. 
‘‘(F) For compliance period 6, 0.5. 
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‘‘(G) For compliance period 7, 0.4. 
‘‘(H) For compliance period 8, 0.3. 
‘‘(I) For compliance period 9, 0.2. 
‘‘(J) For compliance period 10, 0.1. 
‘‘(K) For each subsequent compliance pe-
riod, 0. 
‘‘(3) AMOUNT
OF
EMISSION
ALLOWANCES.— 
The amount of emission allowances to be distributed 
to the owner or operator of an entity in an eligible 
industrial sector shall be calculated by— 
‘‘(A) the output-based allocation bench-
mark calculated pursuant to subsection (b) of 
the industrial sector of such entity; multiplied 
by 
‘‘(B) the average annual output of such 
entity for the 2 years preceding the year of the 
distribution; multiplied by 
‘‘(C) the appropriate assistance factor 
under paragraph (2). 
‘‘(4) NEW
ENTITIES.—Not later than 24 
months after the date of enactment of this title, the 
Administrator shall issue regulations governing the 
distribution of emission allowances for the first 4 
years of operation of a new entity in an eligible in-
dustrial sector. These regulations shall provide for— 
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‘‘(A) the distribution of emission allow-
ances to such entities based on comparable enti-
ties in the same eligible industrial sector; and 
‘‘(B) an adjustment in the third and 
fourth years of operation to reconcile the total 
amount of emission allowances received during 
the first 4 years of operation of the new entity 
to the amount the entity would have received 
during such years of operation had the appro-
priate data been available for the first and sec-
ond years of operation. 
‘‘(d) TOTAL MAXIMUM DISTRIBUTION.—The Admin-
istrator may not distribute more emission allowances for 
any vintage year pursuant to this section than are allo-
cated for use pursuant to section 722(b) for that vintage 
year. For any vintage year for which the total emission 
allowances calculated for distribution pursuant to this sec-
tion would exceed the number of emission allowances allo-
cated pursuant to section 722(b), the Administrator shall 
reduce each entity’s distribution on a pro rata basis so 
that the total distribution of emission allowances under 
this section equals the number of emission allowances allo-
cated under section 722(b). 
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‘‘(e) CESSATION OF QUALIFYING ACTIVITIES.—If, as 
determined by the Administrator, an entity is no longer 
in an eligible industrial sector— 
‘‘(1) the Administrator may not distribute emis-
sion allowances to the owner or operator of such en-
tity under this section; and 
‘‘(2) the owner or operator of such entity shall 
return to the Administrator— 
‘‘(A) all emissions allowances that have 
been distributed under this section to the owner 
or operator for future vintage years; and 
‘‘(B) a prorated amount of emission allow-
ances distributed under this section for the vin-
tage year in which the entity ceases to be in an 
eligible industrial sector. 
‘‘SEC. 724. ASSISTANCE TO STATE, TERRITORIAL, AND TRIB-
AL GOVERNMENTS. 
‘‘(a) IN GENERAL.—The Administrator shall annu-
ally distribute to States and Indian Tribes the proceeds 
of emission allowances auctioned pursuant to section 
722(d). Such proceeds shall be used by States and Indian 
Tribes to provide financial assistance and incentives in ac-
cordance with subsection (e) that support the reduction 
of air pollution, including criteria air pollutants, haz-
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ardous air pollutants, and emissions of greenhouse gases, 
or promote adaptation to climate change. 
‘‘(b) REGULATIONS.—Not later than 24 months after 
the date of enactment of this section, the Administrator 
shall promulgate regulations to carry out this section, in-
cluding regulations— 
‘‘(1) to ensure that each State and Indian Tribe 
provides financial assistance and incentives effi-
ciently and in accordance with this section and ap-
plicable Federal laws; 
‘‘(2) to prevent waste, fraud, and abuse; 
‘‘(3) to identify the forms of financial assist-
ance and incentives that States and Indian Tribes 
may provide; and 
‘‘(4) to prescribe the form and content of re-
ports that States and Indian Tribes are required to 
submit under this section. 
‘‘(c) INTENDED USE PLANS.— 
‘‘(1) IN GENERAL.—After providing for public 
review and comment, each State and Indian Tribe 
receiving proceeds under this section shall annually 
prepare a plan that identifies the intended uses of 
such proceeds. 
‘‘(2) CONTENTS.—An intended use plan pre-
pared under paragraph (1) shall include— 
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‘‘(A) a list of the projects or programs in-
tended to be funded in the next fiscal year that 
begins after the date of the plan, including a 
description of each project or program; and 
‘‘(B) additional information as determined 
appropriate by the Administrator. 
‘‘(d) DISTRIBUTION AMONG STATES
AND INDIAN 
TRIBES.— 
‘‘(1) IN GENERAL.—Not later than September 
30 of each calendar year, the Administrator shall, in 
accordance with this section, distribute the proceeds 
of emission allowances auctioned pursuant to section 
722(d) each year in accordance with the following 
formula: 
‘‘(A) 25 percent shall be divided equally 
among the States. 
‘‘(B) 50 percent of the emission allowances 
shall be distributed ratably among the States 
and Indian Tribes based on the population of 
each State and Indian Tribe, as contained in 
the most recent census data available from the 
Bureau of the Census at the time the Adminis-
trator calculates the formula for distribution. 
‘‘(C) 25 percent shall be distributed rat-
ably among the States and Indian Tribes on the 
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basis of the energy consumption of each State 
and Indian Tribe as contained in the most re-
cent State Energy Data System report of the 
Energy Information Administration (or such al-
ternative reliable source as the Administrator 
may designate). 
‘‘(2) 
MINIMUM
AMOUNTS
FOR
INDIAN 
TRIBES.—The Administrator shall ensure that not 
less than 5 percent of the total proceeds distributed 
to States and Indian Tribes in each calendar year is 
distributed to Indian Tribes. 
‘‘(3) 
RECALCULATION
OF
DISTRIBUTION 
AMOUNTS.—The Administrator shall recalculate the 
amounts to be distributed as determined by the for-
mula in paragraph (1) not less frequently than once 
every 5 years. 
‘‘(e) USES.—The proceeds distributed to each State 
and Indian Tribe pursuant to this section may be used 
to provide grants, tax credits, production incentives, loans, 
loan guarantees, forgivable loans, interest rate buydowns, 
and other types of financial assistance and incentives that 
support or promote the following: 
‘‘(1) Zero-emission electricity generation, in-
cluding— 
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‘‘(A) research, development, and dem-
onstration of zero-emission electricity genera-
tion projects; and 
‘‘(B) deployment of community-scale, low- 
income, and distributed generation zero-emis-
sion electricity generation projects. 
‘‘(2) Energy storage projects. 
‘‘(3) Energy efficiency programs. 
‘‘(4) Grid modernization, including support for 
integration of renewable energy resources and dis-
tributed generation, demand response, demand side 
management, and systems analysis. 
‘‘(5) Deployment of zero-emission vehicles, in-
cluding light-, medium-, and heavy-duty vehicles. 
‘‘(6) Charging, refueling, and grid infrastruc-
ture enhancement to support zero-emission vehicles. 
‘‘(7) Design, construction, and maintenance to 
improve the resilience of existing and new infrastruc-
ture, including public health infrastructure, to the 
impacts of climate change, including wildfires, 
drought, flooding, and other extreme weather events. 
‘‘(8) Electrification of residential and commer-
cial products that reduces demand for natural gas, 
heating oil, gasoline, diesel fuel, or propane. 
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‘‘(9) Wildlife and natural resource adaptation, 
including— 
‘‘(A) protection, maintenance, or restora-
tion of natural infrastructure such as wetlands, 
reefs, and barrier islands; 
‘‘(B) conservation or maintenance of public 
lands; 
‘‘(C) protection and restoration of water-
sheds; 
‘‘(D) floodplain restoration and flood pro-
tection in densely populated urban areas; and 
‘‘(E) mitigation of ocean-related climate 
change effects, including effects on bays, estu-
aries, populated barrier islands, and other 
ocean-related features. 
‘‘(10) Sustainable agricultural programs, in-
cluding promotion of soil health. 
‘‘(11) Food waste reduction programs. 
‘‘(12) Sustainable forest management and land 
use programs. 
‘‘(13) Reduction, capture, and use of methane 
from landfills and wastewater treatment facilities. 
‘‘(14) Material conservation programs. 
‘‘(15) Providing the non-Federal share of the 
cost of surface transportation capital projects that 
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support public transportation and transit programs, 
including support for bike lanes and pathways, pe-
destrian pathways, and bike share programs pro-
vided that not more than 10 percent of assistance 
distributed to each State and Indian Tribe pursuant 
to this section shall be used for such purposes. 
‘‘(16) Construction, expansion, and retooling of 
facilities that manufacture components for clean en-
ergy technology systems. 
‘‘(17) Installation, retrofit, or conversion of 
equipment to enable manufacturing facilities to man-
ufacture zero- or low-emission energy-intensive in-
dustrial products. 
‘‘(18) Any other program, including a State 
program, that reduces air pollution, deploys clean 
energy or energy efficient technologies, or enhances 
the resilience of infrastructure, as determined by the 
Administrator. 
‘‘(f) ADMINISTRATIVE COSTS.—Not more than 5 per-
cent of the proceeds distributed to States and Indian 
Tribes in any year may be used for the purposes of admin-
istrative expenses. 
‘‘(g) MAINTENANCE OF EFFORT.—A State or Indian 
Tribe’s use of proceeds distributed by this section shall 
include assurances that the State or Indian Tribe will 
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maintain support for existing activities carried out by such 
State or Indian Tribe in future years at least at the levels 
of such support that is the average of such State or Indian 
Tribe’s support for such programs in the 3 years pre-
ceding the date of enactment of this section. The Adminis-
trator may waive the requirement in this subsection for 
the purpose of relieving fiscal burdens on States and In-
dian Tribes that have experienced a precipitous decline in 
financial resources. 
‘‘(h) ASSISTANCE TO DISADVANTAGED AND RURAL 
COMMUNITIES.—Not less than 50 percent of funding dis-
tributed to each State and Indian Tribe shall be used to 
provide assistance to activities located within disadvan-
taged or rural communities, as determined by the Admin-
istrator. 
‘‘(i) REPORTING.—Each State and Indian Tribe shall 
submit to the Administrator a report every 2 years on the 
use of proceeds received under this section in accordance 
with such requirements as the Administrator may pre-
scribe. 
‘‘(j) ENFORCEMENT.—If the Administrator deter-
mines that a State or Indian Tribe is not in compliance 
with this section, the Administrator may withhold pro-
ceeds that are otherwise to be distributed to such State 
or Indian Tribe. Proceeds withheld pursuant to this sub-
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section may be distributed among the remaining States 
and Indian Tribes in accordance with the formula deter-
mined pursuant to subsection (d). 
‘‘SEC. 725. PROGRAM REVIEW. 
‘‘The Administrator shall— 
‘‘(1) in conjunction with the establishment of 
emission allowances under section 715(c)(2) for a 
compliance period, conduct a review of the imple-
mentation of this title; 
‘‘(2) in conducting each such review, seek public 
comment; and 
‘‘(3) upon completion of each such review, sub-
mit to Congress a report with the results of such re-
view, including recommendations, if any, for legisla-
tion or administrative actions appropriate to achieve 
the targets under section 711(a) and the reductions 
under section 711(b). 
‘‘SEC. 726. ADVISORY BOARD. 
‘‘(a) ESTABLISHMENT.—The Administrator shall es-
tablish an advisory board to provide independent advice 
and recommendations to the Environmental Protection 
Agency with respect to the administration of this title. 
‘‘(b) MEMBERSHIP.—The advisory board shall be 
composed of members representing— 
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‘‘(1) community-based organizations, including 
such organizations that carry out initiatives relating 
to environmental justice; 
‘‘(2) State governments; 
‘‘(3) Tribal Governments; 
‘‘(4) local governments; 
‘‘(5) labor organizations; 
‘‘(6) nongovernmental and environmental orga-
nizations; 
‘‘(7) agricultural organizations; 
‘‘(8) private sector organizations, including rep-
resentatives of industries and businesses required to 
comply with the requirements of this title; and 
‘‘(9) experts in the field of— 
‘‘(A) socioeconomic analysis; 
‘‘(B) health and environmental effects; 
‘‘(C) pollution monitoring and exposure 
evaluation; 
‘‘(D) environmental law and civil rights 
law; 
‘‘(E) environmental health science re-
search; or 
‘‘(F) agricultural science research. 
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‘‘(c) FACA.—Chapter 10 of title 5, United States 
Code (commonly known as the Federal Advisory Com-
mittee Act), shall apply to the advisory board. 
‘‘PART C—EMISSIONS REDUCTIONS IN EVERY 
COMMUNITY 
‘‘SEC. 731. DEFINITIONS. 
‘‘In this part: 
‘‘(a) CLEANER AIR COMMUNITY.—The term ‘Cleaner 
Air Community’ means a community designated as a 
Cleaner Air Community under section 733. 
‘‘(b) CLEANER AIR COMMUNITY FUND.—The term 
‘Cleaner Air Community Fund’ means the fund estab-
lished under section 104 of the Climate Pollution Stand-
ard and Community Investment Act of 2024. 
‘‘(c) COMMUNITY.—The term ‘community’ means a 
county, municipality, town, township, village, parish, bor-
ough, or other unit of general government below the State 
level. 
‘‘SEC. 732. USE OF FUNDS FROM THE CLEANER AIR COMMU-
NITY FUND. 
‘‘(a) IN GENERAL.— 
‘‘(1) ASSISTANCE.—Beginning in 2027 and 
each year thereafter, the Administrator shall provide 
assistance pursuant to this section using amounts 
made available in the Cleaner Air Community Fund. 
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‘‘(2) PRIORITY.—In providing assistance pursu-
ant to this section using amounts made available in 
the Cleaner Air Community Fund, the Adminis-
trator shall prioritize providing assistance to commu-
nities designated as a Cleaner Air Community under 
section 733. 
‘‘(b) ENVIRONMENTAL
AND
CLIMATE
JUSTICE 
BLOCK GRANTS.—The Administrator is authorized to use 
amounts made available in the Cleaner Air Community 
Fund to award grants and provide technical assistance 
under section 138. 
‘‘(c) ENHANCED AIR POLLUTION MONITORING.— 
‘‘(1) IN GENERAL.—The Administrator is au-
thorized to award grants using amounts made avail-
able in the Cleaner Air Community Fund to local 
and State governments, Indian Tribes, air pollution 
control agencies, and other public or nonprofit pri-
vate agencies, institutions, and organizations with 
appropriate technical capacity to support additional 
emissions monitoring in disadvantaged communities, 
as determined by the Administrator. 
‘‘(2) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an entity described in 
paragraph (1) shall submit an application to the Ad-
ministrator at such time, in such form, and con-
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taining such information and assurances as the Ad-
ministrator may require. 
‘‘(3) PRIORITIZATION OF USE OF FUNDS.—The 
Administrator shall prioritize awarding grants under 
this subsection to entities that propose, in an appli-
cation submitted under paragraph (2), to use grants 
to— 
‘‘(A) improve the reporting, monitoring, 
and enforcement of the requirements of this 
title; 
‘‘(B) improve air quality monitoring, in-
cluding by the use of hyperlocal air monitoring 
equipment and techniques, in locations deter-
mined by the Administrator to have insufficient 
monitoring equipment and capabilities; or 
‘‘(C) inform management decisions, such 
as the placement or relocation of stationary air 
pollution monitors, transportation or land use 
planning, investments in mitigating air pollu-
tion sources, and other planning decisions, by 
relevant local, State, and Tribal governments. 
‘‘(d) DEVELOPMENT
OF
EMISSIONS
REDUCTION 
PLANS.— 
‘‘(1) IN GENERAL.—The Administrator is au-
thorized to award grants and provide technical as-
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sistance using amounts made available in the Clean-
er Air Community Fund to local and State govern-
ments, Indian Tribes, air pollution control agencies, 
and other public or nonprofit private agencies, insti-
tutions, and organizations that are located in a 
Cleaner Air Community to develop multiyear plans 
to reduce air pollution in such community. 
‘‘(2) PLAN
CONTENTS.—A plan developed 
under paragraph (1) shall include— 
‘‘(A) a proposal to develop effective and 
practical processes, methods, and devices to re-
duce, prevent, or control air pollution, including 
greenhouse gas emissions, within a Cleaner Air 
Community; and 
‘‘(B) a description of the expected use of 
funds to develop such proposals. 
‘‘(3) COMMUNITY
ENGAGEMENT.—Any entity 
receiving a grant to develop a multi-year plan under 
paragraph (1) shall demonstrate sufficient commu-
nity engagement with local residents in the develop-
ment of a plan. 
‘‘(e) IMPLEMENTATION OF EMISSIONS REDUCTION 
PLANS.—The Administrator is authorized to award grants 
using amounts made available in the Cleaner Air Commu-
nity Fund to local and State governments, Indian Tribes, 
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air pollution control agencies, and other public or non-
profit private agencies, institutions, and organizations 
that received a grant and developed a plan under sub-
section (d)— 
‘‘(1) if the Administrator determines such enti-
ty demonstrated sufficient community engagement 
with local residents in the development of the plan; 
and 
‘‘(2) for purposes of implementing the plan. 
‘‘(f) COMMUNITY-BASED
HEALTH
SERVICES
IN 
CLEANER AIR COMMUNITIES.—The Administrator, in 
consultation with the Secretary of Health and Human 
Services, is authorized to award grants using amounts 
made available in the Cleaner Air Community Fund to 
local and State governments, Indian Tribes, air pollution 
control agencies, and other public or nonprofit private 
agencies, institutions, and organizations, which shall be 
used to— 
‘‘(1) support community-based health centers, 
health monitoring, and other health care services lo-
cated in a Cleaner Air Community; and 
‘‘(2) address the health impacts of individuals 
who reside or work in a Cleaner Air Community. 
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‘‘SEC. 733. CLEANER AIR COMMUNITIES. 
‘‘(a) DESIGNATION
OF
CLEANER
AIR
COMMU-
NITIES.—Beginning after compliance period 1, the Admin-
istrator shall designate, for a period of 5 years, commu-
nities as Cleaner Air Communities in accordance with this 
section. 
‘‘(b) ELIGIBILITY.—A community shall be eligible to 
be designated as a Cleaner Air Community under sub-
section (a) if the community, or a census tract within such 
community, experiences an increase of emissions of any 
greenhouse gas, hazardous air pollutant, or criteria air 
pollutant on an annual basis over the average annual 
quantity of emissions of the pollutant during the previous 
compliance period. 
‘‘(c) PETITION FOR DESIGNATION.—Any person may 
petition the Administrator to designate a community as 
a Cleaner Air Community under subsection (a). 
‘‘(d) CONSIDERATION OF PETITION.—The Adminis-
trator shall review a petition under subsection (c) and 
make a determination on such petition not later than 1 
year after receiving such petition. 
‘‘(e) REDESIGNATION
OF CLEANER AIR COMMU-
NITIES.—Not later than 4 years after a community is des-
ignated as a Cleaner Air Community, the Administrator 
shall determine whether to extend the designation of the 
community as a Cleaner Air Community for another 5- 
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year period beginning at the end of the last year during 
which that community experienced an increase of pollut-
ants as described in subsection (b). 
‘‘SEC. 734. ANNUAL REPORT TO CONGRESS. 
‘‘Beginning in 2027, not later than 180 days after 
the end of each year, the Administrator shall submit to 
Congress a report for the previous year, which shall in-
clude— 
‘‘(1) a description of each grant awarded and 
the technical assistance provided under this part or 
section 138 pursuant to this part; 
‘‘(2) the amount of funding that remains avail-
able in the Cleaner Air Community Fund; 
‘‘(3) an assessment of the air quality moni-
toring needs of disadvantaged communities, as deter-
mined by the Administrator, including a determina-
tion whether additional air quality monitoring is nec-
essary to determine the eligibility of communities to 
be designated as Cleaner Air Communities; and 
‘‘(4) an assessment of the air quality and public 
health of Cleaner Air Communities and efforts to re-
duce air pollution in such communities. 
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‘‘SEC. 735. REGULATIONS. 
‘‘The Administrator shall issue any regulations nec-
essary to implement this part not later than 36 months 
after the date of enactment of this part. 
‘‘PART D—NEGATIVE EMISSIONS ACTIVITIES 
‘‘SEC. 741. DEFINITIONS. 
‘‘In this part: 
‘‘(1) BEGINNING PRODUCER.—The term ‘begin-
ning producer’ means an individual that— 
‘‘(A)(i) has not operated a farm or ranch; 
or 
‘‘(ii) has operated a farm or ranch for not 
more than 10 years; and 
‘‘(B) meets such other criteria as the Ad-
ministrator, in consultation with the Secretary, 
may establish. 
‘‘(2) 
ELIGIBLE
CARBON
REMOVAL
TECH-
NOLOGY.— 
‘‘(A) IN GENERAL.—The term ‘eligible car-
bon removal technology’ means any equipment, 
technique, or technology, placed into service 
after January 1, 2023, that— 
‘‘(i) captures carbon dioxide directly 
from ambient air or seawater, as deter-
mined appropriate by the Administrator; 
and 
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‘‘(ii) permanently stores such cap-
tured carbon dioxide— 
‘‘(I) in a subsurface geologic for-
mation or in materials, including 
building materials and mineralized 
carbon materials; or 
‘‘(II) using other permanent stor-
age methods, as determined by the 
Administrator. 
‘‘(B) EXCLUSION.—The term ‘eligible car-
bon removal technology’ does not include any 
equipment, technique, or technology that— 
‘‘(i) captures carbon dioxide which is 
deliberately released from naturally occur-
ring subsurface springs; or 
‘‘(ii) stores or uses carbon dioxide for 
enhanced oil recovery. 
‘‘(3) ELIGIBLE LAND.— 
‘‘(A) IN
GENERAL.—The term ‘eligible 
land’ means land on which agricultural com-
modities, livestock, or forest-related products 
are produced. 
‘‘(B) INCLUSIONS.—The term ‘eligible 
land’ includes the following: 
‘‘(i) Cropland. 
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‘‘(ii) Grassland. 
‘‘(iii) Rangeland. 
‘‘(iv) Pasture land. 
‘‘(v) Nonindustrial private forest land. 
‘‘(vi) Other agricultural land (includ-
ing cropped woodland, marshes, environ-
mentally sensitive areas, and agricultural 
land used for the production of livestock) 
on which identified or expected resource 
concerns related to agricultural production 
could be addressed through a contract 
under the Program as determined by the 
Administrator, in consultation with the 
Secretary. 
‘‘(4) ELIGIBLE PRACTICE.—The term ‘eligible 
practice’ means an activity included on the list es-
tablished under section 744(a). 
‘‘(5) 
HIGH-QUALITY
PROJECT.—The 
term 
‘high-quality project’ means carrying out one or 
more eligible practices, which result in (as deter-
mined by the Administrator) verifiable, permanent, 
and additional reductions or avoidance of greenhouse 
gas emissions or sequestration of greenhouse gases. 
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‘‘(6) PAYMENT.—The term ‘payment’ means fi-
nancial assistance provided to a producer for per-
forming one or more practices under this part. 
‘‘(7) PRODUCER.—The term ‘producer’ means 
an individual or entity capable of carrying out an eli-
gible practice. 
‘‘(8) PROGRAM.—The term ‘Program’ means 
the program established under section 743. 
‘‘(9) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Department of Agriculture. 
‘‘(10) SOCIALLY DISADVANTAGED PRODUCER.— 
The term ‘socially disadvantaged producer’ means a 
farmer or rancher who is a member of a group 
whose members have been subjected to racial or eth-
nic prejudice because of their identity as members of 
the group without regard to their individual quali-
ties. 
‘‘SEC. 742. PURPOSES. 
‘‘The purposes of the Program are to incentivize ac-
tivities that result in reduction or avoidance of greenhouse 
gas emissions, or sequestration of greenhouse gases, and 
to optimize environmental benefits, by— 
‘‘(1) utilizing methodologies, in consultation 
with the Secretary for agricultural production and 
forest management practices on eligible land, for 
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each eligible practice type for quantifying and 
verifying potential and actual reduction and avoid-
ance of greenhouse emissions and sequestration of 
greenhouse gases; 
‘‘(2) avoiding, to the maximum extent prac-
ticable, the need for regulatory programs by assist-
ing producers implementing eligible practices on eli-
gible land in reducing or avoiding greenhouse gas 
emissions, or sequestering of greenhouse gases in 
order to achieve economy-wide greenhouse gas emis-
sions reduction targets pursuant to section 702; 
‘‘(3) avoiding or minimizing, to the maximum 
extent practicable, adverse effects on human health 
or the environment resulting from the implementa-
tion of practices under the Program; 
‘‘(4) assisting producers implementing eligible 
practices on eligible land with adaptation to chang-
ing climatic conditions and mitigating against in-
creasing weather volatility and drought; and 
‘‘(5) enabling the participation of beginning 
producers and socially disadvantaged producers in 
the Program. 
‘‘SEC. 743. ESTABLISHMENT. 
‘‘(a) IN GENERAL.—The Administrator, in consulta-
tion with the Secretary with respect to agricultural pro-
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duction and forest management practices on eligible land, 
shall establish a program to enter into contracts with pro-
ducers to carry out practices using amounts made avail-
able in the Negative Emissions Activities Fund. 
‘‘(b) REGULATIONS.—Not later than 2 years after 
the date of enactment of this part, the Administrator shall 
promulgate regulations to carry out this part. 
‘‘SEC. 744. ELIGIBLE PRACTICES. 
‘‘(a) LIST OF ELIGIBLE PRACTICES.—— 
‘‘(1) LISTING.—The Administrator, in consulta-
tion with the Secretary with respect to agricultural 
production and forest management activities on eli-
gible land, shall establish, and may periodically re-
vise, a list of activities that are eligible practices. 
‘‘(2) REQUIREMENTS.—The Administrator may 
include an activity as an eligible practice on the list 
established under paragraph (1) if the Adminis-
trator, in consultation with the Secretary with re-
spect to agricultural production and forest manage-
ment practices on eligible land, determines the activ-
ity can reduce or avoid greenhouse gas emissions or 
sequester greenhouse gases, consistent with the pur-
poses described in section 742. 
‘‘(3) MODIFICATIONS TO LIST.—The Adminis-
trator may at any time, by rule, add or remove an 
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activity to or from the list of eligible practices in ac-
cordance with paragraph (2). 
‘‘(b) ESTABLISHMENT OF INITIAL LIST.—In estab-
lishing the initial list under subsection (a), the Adminis-
trator, in consultation with the Secretary with respect to 
agricultural production and forest management practices 
on eligible land, shall give priority to consideration of ac-
tivities for which there are well developed methodologies 
for quantifying the reduction or avoidance of greenhouse 
gas emissions or sequestration of greenhouse gases with 
such modifications as the Administrator considers appro-
priate. At a minimum, the initial list prepared under this 
section shall include the following activities that reduce or 
avoid greenhouse gas emissions or sequester greenhouse 
gases: 
‘‘(1) Agricultural, grassland, and rangeland se-
questration and management activities on eligible 
land. 
‘‘(2) Changes in carbon stocks attributed to 
land use change and forestry activities on eligible 
land. 
‘‘(3) Manure management and disposal on eligi-
ble land. 
‘‘(4) Livestock management on eligible land. 
‘‘(5) Eligible carbon removal technologies. 
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‘‘(c) METHODOLOGIES.— 
‘‘(1) ESTABLISHMENT.—The Administrator, in 
consultation with the Secretary with respect to agri-
cultural production and forest management practices 
on eligible land, shall establish for each type of eligi-
ble practice a standardized methodology for deter-
mining the quantity of reduction or avoidance of 
greenhouse gas emissions, or sequestration of green-
house gases, expected to be achieved by the type of 
eligible practice, including protocols for monitoring, 
reporting, and verifying performance, and account-
ing for uncertainty. 
‘‘(2) PREEXISTING
METHODOLOGIES.—In es-
tablishing a standard methodology for each type of 
eligible practice under paragraph (1), the Adminis-
trator shall consider basing such standard method-
ology on methodologies that exist as of the date of 
enactment of this part. 
‘‘SEC. 745. APPLICATIONS. 
‘‘(a) IN GENERAL.—The Administrator may enter 
into a contract with a producer under section 746 if— 
‘‘(1) the producer submits to the Administrator 
an application that proposes to carry out one or 
more eligible practices; and 
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‘‘(2) the Administrator approves such applica-
tion under this section. 
‘‘(b) EVALUATION CRITERIA.—The Administrator 
shall develop criteria for evaluating applications submitted 
under subsection (a), which shall include consideration of 
the potential quantity and cost effectiveness of reduction 
or avoidance of greenhouse gas emissions, or sequestration 
of greenhouse gases, from the proposed eligible practices. 
‘‘(c) PRIORITIZATION OF APPLICATIONS.—In evalu-
ating applications submitted under subsection (a), the Ad-
ministrator shall prioritize approving applications based 
on— 
‘‘(1) the anticipated quantity of reduction or 
avoidance of greenhouse gas emissions, or sequestra-
tion of greenhouse gases from the proposed eligible 
practices; 
‘‘(2) the cost to carry out the proposed eligible 
practices relative to other, similar eligible practices; 
‘‘(3) how effectively and comprehensively the 
proposed eligible practices are expected to achieve 
the reduction or avoidance of greenhouse gas emis-
sions, or sequestration of greenhouse gases on eligi-
ble land; 
‘‘(4) the inclusion of high-quality projects; and 
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‘‘(5) how well the proposed eligible practices 
fulfill the purposes of the Program. 
‘‘(d) GROUPING OF APPLICATIONS.—To the greatest 
extent practicable, the Administrator shall evaluate appli-
cations that propose to carry out the same or similar eligi-
ble practices together. 
‘‘(e) GEOGRAPHIC SCOPE.—The Administrator shall, 
to the extent practicable, seek to approve applications 
from a diversity of geographic regions of the United 
States, taking into account factors such as soil type, crop-
ping history, and water availability. 
‘‘(f) SET ASIDE FOR USE OF ELIGIBLE CARBON RE-
MOVAL TECHNOLOGY.—The Administrator shall ensure 
that, each year, not less than 20 percent of the amount 
provided under contracts entered into under section 746 
be provided to carry out eligible practices that use eligible 
carbon removal technology. 
‘‘(g) REVERSE AUCTION.— 
‘‘(1) IN GENERAL.—The Administrator may ap-
prove applications submitted under subsection (a) 
using a reverse auction mechanism to promote the 
most cost effective means of achieving the antici-
pated reduction or avoidance of greenhouse gas 
emissions, or sequestration of greenhouse gases, pur-
suant to contracts entered into under section 746. 
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‘‘(2) MULTIFACTOR BIDDING.—When using a 
reverse auction mechanism under paragraph (1), the 
Administrator may incorporate noncost factors into 
the auction system, and prioritize approving applica-
tions that propose to carry out eligible practices 
that— 
‘‘(A) maximize the net greenhouse gas 
emissions reductions; 
‘‘(B) minimize the amount of greenhouse 
gas emissions released by carrying out the eligi-
ble practices; 
‘‘(C) would increase the diversity of types 
of eligible practices carried out pursuant to sec-
tion 746; 
‘‘(D) would be carried out in geographi-
cally diverse areas; 
‘‘(E) support economic development or job 
creation in disadvantaged or rural communities, 
as determined by the Administrator; 
‘‘(F) include robust public engagement and 
community benefits commitments; 
‘‘(G) provide benefits to beginning pro-
ducers and socially disadvantaged producers; 
and 
‘‘(H) include high-quality projects. 
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‘‘(h) THIRD-PARTY AGGREGATORS.—The Adminis-
trator may, when evaluating applications under this sec-
tion, approve applications from entities that aggregate eli-
gible practices from multiple producers. 
‘‘SEC. 746. CONTRACTS AND PAYMENTS. 
‘‘(a) CONTRACTS.—After approving an application 
under section 745, the Administrator shall seek to enter 
into a contract with the producer that submitted the appli-
cation. 
‘‘(b) REQUIRED PROVISIONS.—A contract entered 
into under subsection (a) shall— 
‘‘(1) require the producer to develop and imple-
ment a program plan which— 
‘‘(A) shall be approved by the Adminis-
trator, and may include such conditions the Ad-
ministrator may require; and— 
‘‘(B) shall provide for how the producer 
will— 
‘‘(i) carry out the eligible practices 
proposed in the application; 
‘‘(ii) manage, maintain, and improve 
such eligible practices for the duration of 
the contract; 
‘‘(iii) provide for the verification of 
the actual quantity of greenhouse gas 
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emissions reduced or avoided, or green-
house gases sequestered, from such eligible 
practices 
in 
accordance 
with 
section 
747(b); and 
‘‘(iv) adequately mitigate environ-
mental impacts (including impacts on bio-
diversity, land use, and water quality) with 
carrying out such eligible practices; 
‘‘(2) require the producer to maintain and sup-
ply information required by the Administrator to de-
termine compliance with, and the effectiveness of, 
the program plan; 
‘‘(3) if the producer transfers the rights, title, 
and interests in eligible land subject to the contract 
(unless the transferee enters into an agreement with 
the Administrator to assume all obligations of the 
contract), require the producer to refund all pay-
ments received under the Program, as determined by 
the Administrator; 
‘‘(4) prohibit the producer from using payments 
made under subsection (e) to conduct any activities 
that would undermine the purposes of the Program; 
‘‘(5) include a provision that a producer may 
not be considered in violation of the contract for fail-
ure to comply with the contract due to cir-
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cumstances beyond the control of the producer, in-
cluding a disaster or other similar condition, as de-
termined by the Administrator; 
‘‘(6) provide for annual payments to the pro-
ducer in accordance with subsection (e); and 
‘‘(7) include any additional provisions the Ad-
ministrator determines are necessary to carry out 
the Program. 
‘‘(c) RENEWAL.—If the Administrator determines 
that further implementation of a producer’s program plan 
would continue to result in cost-effective reduction or 
avoidance of greenhouse gas emissions, or sequestration 
of greenhouse gases, the Administrator may seek to renew 
the existing contract in the last year of the contract term 
if the producer— 
‘‘(1) demonstrates compliance with the provi-
sions of the existing contract; and 
‘‘(2) agrees to adopt and continue to integrate 
new or improved eligible practices, as determined by 
the Administrator. 
‘‘(d) TERM OF CONTRACTS.— 
‘‘(1) IN GENERAL.—A contract entered into or 
renewed under this section shall be for a term of— 
‘‘(A) not less than 5 years; and 
‘‘(B) not more than 20 years. 
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‘‘(2) FACTORS
FOR
DETERMINING
CONTRACT 
DURATION.—The Administrator shall determine the 
term of a contract entered into or renewed under 
this section based on— 
‘‘(A) the eligible practices included in the 
producer’s program plan; 
‘‘(B) the opportunities for greenhouse gas 
emission reduction or avoidance, or sequestra-
tion of greenhouse gases, from such eligible 
practices; and 
‘‘(C) other factors determined appropriate 
by the Administrator. 
‘‘(e) ANNUAL PAYMENTS.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
provide annual payments to a producer with which 
the Administrator enters into or renews a contract 
under this section using amounts made available in 
the Negative Emissions Activities Fund. 
‘‘(2) AMOUNT.— 
‘‘(A) PRIMARY CONSIDERATION.—The Ad-
ministrator shall determine the amount of an 
annual payment under paragraph (1) based 
on— 
‘‘(i) the expected quantity of green-
house gas emission reduction or avoidance, 
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100 
or sequestration of greenhouse gases, re-
sulting from the eligible practices included 
in the program plan; 
‘‘(ii) the amount and scale of high- 
quality projects included in the program 
plan; and 
‘‘(iii) if applicable, the results of a re-
verse auction carried out pursuant to sec-
tion 745(g). 
‘‘(B) ADDITIONAL
CONSIDERATIONS.—In 
determining the amount of an annual payment 
under this paragraph, the Administrator may 
also consider— 
‘‘(i) costs incurred by the producer as-
sociated with developing and implementing 
the program plan, including costs associ-
ated with plans, designs, materials, equip-
ment, and labor; 
‘‘(ii) income forgone by the producer 
from eligible land; 
‘‘(iii) the extent to which compensa-
tion would ensure long-term continued 
maintenance, management, and improve-
ment of one or more practices included in 
the program plan; and 
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101 
‘‘(iv) other factors as determined ap-
propriate by the Administrator. 
‘‘(C) ADDITIONAL PAYMENTS FOR MAINTE-
NANCE OF PROGRAM PLANS.—If the Adminis-
trator and a producer agree to renew a contract 
pursuant to subsection (c), the Administrator 
may provide the producer a separate payment 
for purposes of maintaining the previously im-
plemented program plan. Notwithstanding sub-
paragraph (A), such separate payment may be 
based on actual measured and verified green-
house gas emission reduction or avoidance, or 
sequestration of greenhouse gases. 
‘‘(3) ADVANCE PAYMENTS.— 
‘‘(A) IN
GENERAL.—The Administrator 
may, if requested by a producer, provide a por-
tion of an annual payment in advance for costs 
related to purchasing materials, equipment, or 
contracting in order to implement one or more 
eligible practices included in the producer’s pro-
gram plan. 
‘‘(B) RETURN OF FUNDS.—If a payment 
provided in advance under subparagraph (A) is 
not expended during the 90-day period begin-
ning on the date of receipt of the payment, the 
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102 
remaining amounts of such payment shall be re-
turned to the Negative Emissions Activities 
Fund within a reasonable timeframe, as deter-
mined by the Administrator. 
‘‘(C) NOTIFICATION
AND
DOCUMENTA-
TION.—The Administrator shall— 
‘‘(i) notify each producer at the time 
of enrollment in the Program of the option 
to receive advance payments; and 
‘‘(ii) document each request to receive 
advance payments. 
‘‘(4) FINANCIAL
ASSISTANCE
FROM
OTHER 
SOURCES.— 
‘‘(A) IN
GENERAL.—Any payments re-
ceived by a producer from a State, private orga-
nization, or person for the implementation of 
one or more eligible practices on eligible land 
shall be in addition to the payments provided to 
the producer pursuant to this subsection. 
‘‘(B) PROHIBITION
ON
DOUBLE
COUNT-
ING.—The Administrator may require, as a 
condition of the contract, that a producer who 
receives payments for implementing eligible 
practices under this section may not also use 
such eligible practices as a compliance mecha-
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103 
nism for another greenhouse gas emissions 
management program, including any foreign, 
Federal, State, local, or voluntary private 
greenhouse gas emissions management pro-
gram, if such use would undermine the goals of 
section 702. 
‘‘(5) LIMITATION OF PAYMENTS.—The Admin-
istrator may not make payments under this section 
in excess of the amounts made available in the Neg-
ative Emissions Activities Fund. If the aggregate of 
such payments in any calendar year will exceed such 
amount, the Administrator shall reduce the amount 
of payments to the extent necessary to comply with 
the requirement in the first sentence. 
‘‘(f) MODIFICATION
OR
TERMINATION
OF
CON-
TRACTS.— 
‘‘(1) VOLUNTARY
MODIFICATION
OR
TERMI-
NATION.—The Administrator may modify or termi-
nate a contract entered into or renewed with a pro-
ducer under this section if— 
‘‘(A) the producer agrees to the modifica-
tion or termination; and 
‘‘(B) the Administrator determines that 
the modification or termination is in the public 
interest. 
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104 
‘‘(2) INVOLUNTARY
TERMINATION.—The Ad-
ministrator may terminate a contract under the pro-
gram if the Administrator determines that the pro-
ducer violated the contract. 
‘‘(3) REPAYMENT.—If a contract is terminated, 
the Administrator may— 
‘‘(A) allow the producer to retain payments 
already received under the contract; or 
‘‘(B) require repayment, in whole or in 
part, of payments received. 
‘‘(g) ENFORCEMENT OF TERMS AND CONDITIONS.— 
‘‘(1) 
TERMINATION.—Notwithstanding 
sub-
section (f), if the Administrator determines that a 
producer violated a term or condition of a contract 
entered into or renewed under this section, and such 
violation warrants termination of the contract (as 
determined by the Administrator), the producer— 
‘‘(A) may not receive payments under the 
contract; and 
‘‘(B) shall refund to the Administrator all 
or a portion of the payments received by the 
owner or operator under the contract, including 
any interest on the payments, as determined by 
the Administrator. 
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105 
‘‘(2) 
OTHER
PENALTIES.—Notwithstanding 
subsection (f), if the Administrator determines that 
a producer violated a term or condition of a contract 
entered into or renewed under this section, but such 
violation does not warrant termination of the con-
tract, the producer shall refund to the Adminis-
trator, or accept adjustments to, the payments pro-
vided to the owner or operator, as the Administrator 
determines to be appropriate. 
‘‘SEC. 747. DUTIES OF THE ADMINISTRATOR. 
‘‘(a) TECHNICAL ASSISTANCE.— 
‘‘(1) IN GENERAL.—To the extent appropriate, 
the Administrator, in consultation with the Sec-
retary with respect to agricultural production and 
forest management practices on eligible land, shall 
assist producers with implementing program plans 
by providing to producers technical assistance, edu-
cation, and outreach, including with respect to infor-
mation and training to aid in the design, installa-
tion, and implementation of program plans. 
‘‘(2) PRIORITIZED PRODUCERS.—The Adminis-
trator shall prioritize providing technical assistance, 
education, and outreach under paragraph (1) to be-
ginning producers and socially disadvantaged pro-
ducers. 
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106 
‘‘(b) VERIFICATION OF PROGRAM PLANS.—The Ad-
ministrator shall establish requirements for how producers 
may verify the actual quantity of greenhouse gas emissions 
reduced or avoided, or greenhouse gases sequestered, from 
eligible practices under section 746(b)(1)(B). The pro-
ducer shall submit to the Administrator a report prepared 
by a third-party verifier accredited pursuant to paragraph 
(2) that provides such information as the Administrator 
requires to verify such quantities. 
‘‘(1) SCHEDULE.—The Administrator shall pre-
scribe a schedule for the submission of reports under 
this subsection, which shall occur not less than once 
during the term of each contract. 
‘‘(2) VERIFIER ACCREDITATION.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall establish a process and requirements for 
periodic accreditation of third-party verifiers to 
ensure that such verifiers are professionally 
qualified and have no conflicts of interest. 
‘‘(B) 
FEDERAL
ACCREDITATION.—The 
process and requirements established under 
subparagraph (A) may include— 
‘‘(i) accreditation standards for third- 
party verifiers; and 
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107 
‘‘(ii) training and testing require-
ments for third-party verifiers. 
‘‘(C) PUBLIC ACCESSIBILITY.—Each third- 
party verifier meeting the requirements for ac-
creditation established pursuant to subpara-
graph (A) shall be listed in a publicly accessible 
database, which shall be maintained and up-
dated by the Administrator. 
‘‘(c) AUDITS.—The Administrator shall conduct, on 
an annual basis, random audits of eligible activities car-
ried out by producers under program plans and the activi-
ties of third-party verifiers. At a minimum, the Adminis-
trator shall conduct audits each year of a representative 
sample of eligible activities and geographical areas. Noth-
ing in this subsection prevents the Administrator from 
conducting any other audit the Administrator considers to 
be necessary. 
‘‘(d) ASSESSMENT
OF
QUANTIFICATION
METH-
ODOLOGIES.—The Administrator shall regularly assess 
the verification requirements established under subsection 
(b) and develop new requirements for verification as need-
ed in order to effectively carry out this part. 
‘‘(e) COORDINATION WITH OTHER FEDERAL AGEN-
CIES.—In carrying out this part, the Administrator shall 
coordinate activities of the Environmental Protection 
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108 
Agency with the Department of Agriculture and other rel-
evant Federal agencies implementing conservation pro-
grams to align protocols, decrease administrative burdens, 
and increase enrollment in beneficial climate practices. 
‘‘SEC. 748. REPORTING AND DATABASE. 
‘‘(a) REPORT REQUIRED.—Not later than January 1, 
2029, and every 2 years thereafter, the Administrator 
shall submit to Congress a report on the status of eligible 
practices funded under this part, including— 
‘‘(1) the amount of payments awarded; 
‘‘(2) results of the eligible practices associated 
with such payments, including estimates of the 
quantity of reduction or avoidance of greenhouse gas 
emissions, or increases in sequestration of green-
house gases; and 
‘‘(3) recommendations to improve the effective-
ness of such eligible practices. 
‘‘(b) PRACTICE DATABASE.— 
‘‘(1) IN
GENERAL.—The Administrator shall 
use the data reported under subsection (a) to estab-
lish and maintain a publicly available database that 
provides— 
‘‘(A) a compilation and analysis of eligible 
practices being carried out under program 
plans; and 
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109 
‘‘(B) a list of recommended eligible prac-
tices. 
‘‘(2) PRIVACY.—Information provided under 
paragraph (1) shall be transformed into a statistical 
or aggregate form so as to not include any identifi-
able or personal information of individual producers. 
‘‘SEC. 749. PROGRAM REVIEW AND REVISION. 
‘‘At least once every 5 years, the Administrator, in 
consultation with the Secretary with respect to agricul-
tural production and forest management practices on eligi-
ble land, shall review and, as appropriate, update and re-
vise— 
‘‘(1) the list of eligible practices established 
under section 744(a); 
‘‘(2) the methodologies established under sec-
tion 744(c); 
‘‘(3) the criteria to evaluate applications under 
section 745; 
‘‘(4) the Program, as necessary, to increase 
participation by beginning producers and socially 
disadvantaged producers; and 
‘‘(5) any other requirements established under 
this part to ensure the effectiveness of achieving the 
purposes in section 742, including by incorporating 
new data and evidence about actual emissions out-
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110 
comes of practices to improve model certainty and 
the accuracy of emission reduction estimates. 
‘‘PART E—INTERNATIONAL RESERVE 
ALLOWANCE PROGRAM 
‘‘SEC. 751. DEFINITIONS. 
‘‘In this part: 
‘‘(1) COVERED
ARTICLE.—The term ‘covered 
article’ means any good which— 
‘‘(A) is imported into the United States: 
and 
‘‘(B) contains greater than 100 pounds of 
any combination of any covered primary good. 
‘‘(2) COVERED
IMPORTED
GOOD.—The term 
‘covered imported good’ means— 
‘‘(A) a covered primary good; or 
‘‘(B) a covered article. 
‘‘(3) COVERED PRIMARY GOOD.—The term ‘cov-
ered primary good’ means any good which— 
‘‘(A) is imported into the United States; 
and 
‘‘(B) is produced by an eligible industrial 
sector listed pursuant to section 723. 
‘‘SEC. 752. INTERNATIONAL RESERVE ALLOWANCE PRO-
GRAM. 
‘‘(a) ESTABLISHMENT.— 
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‘‘(1) IN
GENERAL.—The Administrator, with 
the concurrence of the Commissioner responsible for 
U.S. Customs and Border Protection and in con-
sultation with additional Federal agencies as deter-
mined appropriate by the Administrator, shall issue 
regulations— 
‘‘(A) establishing an international reserve 
allowance program for the sale, exchange, pur-
chase, transfer, and banking of international re-
serve allowances for covered imported goods; 
‘‘(B) ensuring that the price for pur-
chasing an international reserve allowance is 
equivalent to the average of the previous four 
auction clearing prices for emission allowances 
under section 720; 
‘‘(C) establishing a general methodology 
for calculating the quantity of international re-
serve allowances that an importer of a covered 
imported good must submit; 
‘‘(D) requiring the submission of an appro-
priate amount of international reserve allow-
ances for covered imported goods entering the 
customs territory of the United States; 
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‘‘(E) exempting from the requirements of 
subparagraph (D) covered imported goods that 
are— 
‘‘(i) determined, by independent third- 
party verification, to meet the relevant out-
put-based allocation benchmark under sec-
tion 723(b); 
‘‘(ii) produced in any foreign country 
that the United Nations has identified as 
among the least developed of developing 
countries; or 
‘‘(iii) produced in any foreign country 
that the Administrator has determined to 
be responsible for less than 0.5 percent of 
total global greenhouse gas emissions and 
less than 5 percent of United States im-
ports of covered imported goods with re-
spect to the relevant eligible industrial sec-
tor; 
‘‘(F) specifying the procedures that U.S. 
Customs and Border Protection will apply for 
the declaration and entry of covered imported 
goods into the customs territory of the United 
States; 
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‘‘(G) establishing procedures that prevent 
circumvention of the international reserve allow-
ance program requirements for covered im-
ported goods that are manufactured or proc-
essed in more than one foreign country; and 
‘‘(H) publishing, on an annual basis, rel-
evant information regarding the quantity of 
international reserve allowances sold, the quan-
tity of covered imported goods entering the cus-
toms territory of the United States, relevant 
greenhouse gas emissions information of such 
goods, the country of origin of such goods, and 
other information as determined relevant by the 
Administrator. 
‘‘(2) PURPOSE
OF
PROGRAM.—The Adminis-
trator shall establish the program under paragraph 
(1) consistent with international agreements to 
which the United States is a party, in a manner that 
minimizes the likelihood of carbon leakage as a re-
sult of differences between— 
‘‘(A) the direct and indirect costs of com-
plying with part B of this title; and 
‘‘(B) the direct and indirect costs, if any, 
of complying in other countries with greenhouse 
gas regulatory programs, requirements, export 
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114 
tariffs, or other measures adopted or imposed 
to reduce greenhouse gas emissions. 
‘‘(b) GREENHOUSE GAS EMISSIONS DATA FOR COV-
ERED IMPORTED GOODS.— 
‘‘(1) IN GENERAL.—Under the regulations es-
tablished under subsection (a), the Administrator 
shall require independent, third-party verification of 
greenhouse gas emissions data, including attrib-
utable greenhouse gas emissions, for all relevant 
stages of production of each covered imported good 
entering the customs territory of the United States. 
‘‘(2) FAILURE TO PRODUCE VERIFIED GREEN-
HOUSE GAS EMISSIONS DATA.—If the Administrator 
determines that an importer of a covered imported 
good has failed to provide accurate, sufficient, and 
independent, third-party verified data, the Adminis-
trator shall make a determination of the greenhouse 
gas emissions associated with the production of such 
good based on the best available data related to the 
greenhouse gas emissions and production data from 
all facilities which produce similar goods within the 
country of origin, the greenhouse gas emissions in-
tensity of the general economy of the country of ori-
gin of such good, and other factors determined rel-
evant by the Administrator. 
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115 
‘‘(c) DISPOSITION OF PROCEEDS.— 
‘‘(1) CLEAN ENERGY REBATE PROGRAM SUP-
PLEMENTAL FUNDING.—50 percent of the proceeds 
from the sale of international reserve allowances 
under this section in each fiscal year shall be made 
available to the Secretary of the Treasury to carry 
out the Clean Energy Rebate Program established 
by section 102 of the Climate Pollution Standard 
and Community Investment Act of 2024. 
‘‘(2) ADMINISTRATIVE
EXPENSES.—The Ad-
ministrator may use, including the transfer of funds 
to the Commissioner responsible for U.S. Customs 
and Border Protection, not more than 10 percent of 
the proceeds from the sale of international reserve 
allowances under this section in each fiscal year to 
cover the administrative expenses associated with 
administering this section. 
‘‘(3) REMAINING
REVENUES.—The Adminis-
trator shall deposit any remaining proceeds from the 
sale of international reserve allowances under this 
section in a fiscal year in equal shares to the funds 
established by sections 103, 104, 105, and 106 of 
the Climate Pollution Standard and Community In-
vestment Act of 2024. 
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116 
‘‘(d) EFFECTIVE DATE.—The international reserve 
allowance program shall not apply to imports of covered 
imported goods entering the customs territory of the 
United States before January 1, 2027. 
‘‘(e) COVERED ENTITIES.—International reserve al-
lowances shall not be used by covered entities to comply 
with part B of this title.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) FEDERAL ENFORCEMENT.—Section 113 of 
the Clean Air Act (42 U.S.C. 7413) is amended— 
(A) in subsection (a)(3), by striking ‘‘or 
title VI,’’ and inserting ‘‘title VI, or title VII’’; 
(B) in subsection (b)(2), by striking ‘‘or 
title VI’’ and inserting ‘‘title VI, or title VII’’; 
(C) in subsection (c)— 
(i) in the first sentence of paragraph 
(1), by striking ‘‘or title VI (relating to 
stratospheric ozone control),’’ and insert-
ing ‘‘title VI, or title VII,’’; and 
(ii) in the first sentence of paragraph 
(3), by striking ‘‘or VI’’ and inserting ‘‘VI, 
or VII’’; 
(D) in subsection (d)(1)(B), by striking 
‘‘or VI’’ and inserting ‘‘VI, or VII’’; and 
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117 
(E) in subsection (f), in the first sentence, 
by striking ‘‘or VI’’ and inserting ‘‘VI, or VII’’. 
(2) INSPECTIONS, MONITORING, AND ENTRY.— 
Section 114(a) of the Clean Air Act (42 U.S.C. 
7414(a)) is amended by striking ‘‘section 112, (ii)’’ 
and inserting ‘‘section 112, or any regulation of 
greenhouse gas emissions under title VII, (ii)’’. 
(3) ENFORCEMENT.—Section 304(f) of the 
Clean Air Act (42 U.S.C. 7604(f)) is amended— 
(A) in paragraph (2), by striking ‘‘or’’ at 
the end; 
(B) in paragraph (3), by striking ‘‘; or’’ at 
the end and inserting a comma; 
(C) in paragraph (4), by striking the pe-
riod at the end and inserting ‘‘, or’’; and 
(D) by inserting the following new para-
graph after paragraph (4): 
‘‘(5) any requirement of title VII,’’. 
(4) ADMINISTRATIVE PROCEEDINGS AND JUDI-
CIAL REVIEW.—Section 307 of the Clean Air Act 
(42 U.S.C. 7607) is amended— 
(A) in subsection (a), by striking ‘‘, or sec-
tion 306’’ and inserting ‘‘section 306, or title 
VII’’; 
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118 
(B) in subsection (b)(1), by striking ‘‘sec-
tion 120,’’ in the first sentence and inserting 
‘‘section 120, any final action under title VII,’’; 
and 
(C) in subsection (d)(1)— 
(i) in subparagraph (T), by striking ‘‘, 
and’’ at the end and inserting a comma; 
(ii) by redesignating subparagraph 
(U) as subparagraph (V); and 
(iii) by inserting the following new 
subparagraph after subparagraph (T): 
‘‘(U) the promulgation or revision of any regu-
lation under title VII, and’’. 
(5) ENERGY
INDEPENDENCE
AND
SECURITY 
ACT OF 2007.—Section 548(b) of the Energy Inde-
pendence and Security Act of 2007 (42 U.S.C. 
17158(b)) is amended— 
(A) in paragraph (1), by striking the ‘‘or’’ 
at the end; 
(B) in paragraph (2), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(3) section 722(e) of the Clean Air Act.’’. 
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119 
SEC. 102. CLEAN ENERGY REBATE PROGRAM. 
(a) IN GENERAL.—The Secretary, in consultation 
with the Secretary of Agriculture and the Secretary of 
Health and Human Services, shall carry out a program 
to be known as the Clean Energy Rebate Program to pro-
vide rebates to eligible households using amounts made 
available to the Secretary under sections 722(c) and 752 
of the Clean Air Act. 
(b) STREAMLINED PARTICIPATION
FOR CERTAIN 
BENEFICIARIES.—The Secretary shall— 
(1) periodically estimate the number of eligible 
households, and the number of participating eligible 
households, for the Clean Energy Rebate Program; 
and 
(2) develop procedures, in consultation with the 
Commissioner of Social Security, the Railroad Re-
tirement Board, the Secretary of Veterans Affairs, 
and relevant State agencies, to ensure that bene-
ficiaries of the benefit programs administered by 
such entities receive the rebate for which such bene-
ficiaries are eligible under the Clean Energy Rebate 
Program. 
(c) REBATE AMOUNT.—The rebate amount for an eli-
gible household under this section shall be determined by 
the Secretary, accounting for— 
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(1) the amount of funding made available under 
section 722(c) of the Clean Air Act; and 
(2) the number of citizens and permanent legal 
residents of the eligible household. 
(d) DELIVERY MECHANISM.—The Secretary shall es-
tablish rules for providing rebates to eligible households 
under this section in an administratively simple manner, 
and on a quarterly basis through— 
(1) direct deposit into the eligible household’s 
designated bank account; 
(2) a State’s electronic benefit transfer system; 
or 
(3) another Federal or State mechanism, if 
such a mechanism is approved by the Secretary. 
(e) ADMINISTRATION BY STATES.— 
(1) IN GENERAL.—The Secretary may, in con-
sultation with the Secretary of Agriculture and the 
Secretary of Health and Human Services, establish 
uniform national program standards to enable 
States, upon the approval of the Secretary, to ad-
minister the Clean Energy Rebate Program in the 
State. Such a State shall establish procedures gov-
erning the administration of the Clean Energy Re-
bate Program that the relevant State agency deter-
mines best serve eligible households in the State, in-
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121 
cluding households with special needs, such as 
households with elderly or disabled members, house-
holds in rural areas, homeless individuals, and 
households residing on reservations as defined in the 
Indian Child Welfare Act of 1978 and the Indian Fi-
nancing Act of 1974. 
(2) COADMINISTRATION
WITH
OTHER
PRO-
GRAMS.—Such a State may coadminister the Clean 
Energy Rebate Program with other State programs, 
such as the supplemental nutrition assistance pro-
gram authorized by the Food and Nutrition Act of 
2008 in accordance with the provisions of this title. 
(3) ADDITIONAL
REQUIREMENTS.—No State 
shall impose any condition of eligibility for a rebate 
under this section other than what is required by 
this section. 
(4) OVERSIGHT.—Each State administering the 
Clean Energy Rebate Program shall— 
(A) assume responsibility for the certifi-
cation of eligible households and for the 
issuance of rebates and the control and ac-
countability thereof; and 
(B) report information to the Secretary at 
such a time and manner as determined appro-
priate by the Secretary. 
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(f) OUTREACH.—The Secretary shall carry out a ro-
bust and comprehensive outreach program to ensure that 
eligible households learn of their eligibility for rebates and 
are advised of the opportunity to receive such rebates. 
(g) TAX TREATMENT.—Rebate amounts provided 
under this section may not be includible in the gross in-
come of the recipient for purposes of the Internal Revenue 
Code of 1986. 
(h) REGULATIONS.—Not later than 24 months after 
the date of enactment of this title, the Secretary shall 
issue such regulations, or guidance, as the Secretary de-
termines necessary or appropriate for the effective and ef-
ficient administration of the Clean Energy Rebate Pro-
gram. 
(i) DEFINITIONS.—In this section: 
(1) ELIGIBLE HOUSEHOLD.—The term ‘‘eligible 
household’’ means a household— 
(A) for which the gross income of the 
household does not exceed 200 percent of the 
poverty line; 
(B) for which the relevant State agency of 
the State in which the household is located de-
termines that the household is participating 
in— 
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(i) the supplemental nutrition assist-
ance program authorized by the Food and 
Nutrition Act of 2008 (7 U.S.C. 2011 et 
seq.); 
(ii) the food distribution program on 
Indian reservations authorized by section 
4(b) of such Act; or 
(iii) the program for nutrition assist-
ance in Puerto Rico or American Samoa 
under section 19 of such Act; 
(C) that consists of a single individual or 
a married couple, and receives benefits under 
the supplemental security income program 
under title XVI of the Social Security Act (42 
U.S.C. 1381 et seq.); and 
(D) of which at least one member is a cit-
izen or permanent legal resident. 
(2) GROSS
INCOME
OF
A
HOUSEHOLD.—The 
term ‘‘gross income of a household’’ means the gross 
income of a household that is determined in accord-
ance with standards and procedures established 
under section 5 of the Food and Nutrition Act of 
2008 (7 U.S.C. 2014). 
(3) HOUSEHOLD.—The term ‘‘household’’ has 
the meaning given the term ‘‘Household’’ in section 
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