798 
gation that may be met through the use of de-
struction offset credits or banked allowances. 
‘‘(D) COUNTING
OF
VIOLATIONS.—Each 
consumption allowance, production allowance, 
or destruction offset credit not held as required 
by this section shall be a separate violation of 
this section. 
‘‘(2) SCHEDULE.—Pursuant to the regulations 
promulgated pursuant to paragraph (1)(A), the 
number of class II, group II consumption allowances 
established by the Administrator for each calendar 
year beginning in 2012 shall be the following per-
centage of the baseline, as established by the Admin-
istrator pursuant to paragraph (3): 
‘‘Calendar Year 
Percent of Baseline 
2012 
2013 
87.5 
2014 
2015 
82.5 
2016 
2017 
77.5 
2018 
2019 
2020 
2021 
2022 
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‘‘Calendar Year 
Percent of Baseline 
2023 
2024 
2025 
2026 
2027 
2028 
2029 
2030 
2031 
2032 
after 2032 
‘‘(3) BASELINE.—(A) Within 12 months after 
the date of enactment of this section, the Adminis-
trator shall promulgate regulations to establish the 
baseline for purposes of paragraph (2). The baseline 
shall be the sum, expressed in metric tons of carbon 
dioxide equivalents, of— 
‘‘(i) the annual average consumption of all 
class II substances in calendar years 2004, 
2005, and 2006; plus 
‘‘(ii) the annual average quantity of all 
class II substances contained in imported prod-
ucts in calendar years 2004, 2005, and 2006. 
‘‘(B) Notwithstanding subparagraph (A), if the 
Administrator determines that the baseline is higher 
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than 370 million metric tons of carbon dioxide 
equivalents, then the Administrator shall establish 
the baseline at 370 million metric tons of carbon di-
oxide equivalents. 
‘‘(C) Notwithstanding subparagraph (A), if the 
Administrator determines that the baseline is lower 
than 280 million metric tons of carbon dioxide 
equivalents, then the Administrator shall establish 
the baseline at 280 million metric tons of carbon di-
oxide equivalents. 
‘‘(4) DISTRIBUTION OF ALLOWANCES.— 
‘‘(A) IN GENERAL.—Pursuant to the regu-
lations promulgated under paragraph (1)(A), 
for each calendar year beginning in 2012, the 
Administrator shall sell consumption allowances 
in accordance with this paragraph. 
‘‘(B) ESTABLISHMENT
OF
POOLS.—The 
Administrator shall establish two allowance 
pools. Eighty percent of the consumption allow-
ances available for a calendar year shall be 
placed in the producer-importer pool, and 20 
percent of the consumption allowances available 
for a calendar year shall be placed in the sec-
ondary pool. 
‘‘(C) PRODUCER-IMPORTER POOL.— 
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‘‘(i) AUCTION.—(I) For each calendar 
year, the Administrator shall offer for sale 
at auction the following percentage of the 
consumption allowances in the producer- 
importer pool: 
‘‘Calendar Year 
Percent Available for Auction 
2012 
2013 
2014 
2015 
2016 
2017 
2018 
2019 
2020 and thereafter 
‘‘(II) Any person who produced or im-
ported any class II substance during cal-
endar year 2004, 2005, or 2006 may par-
ticipate in the auction. No other persons 
may participate in the auction unless per-
mitted to do so pursuant to subclause 
(III). 
‘‘(III) Not later than three years after 
the date of the initial auction and from 
time to time thereafter, the Administrator 
shall determine through rulemaking wheth-
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er any persons who did not produce or im-
port a class II substance during calendar 
year 2004, 2005, or 2006 will be permitted 
to participate in future auctions. The Ad-
ministrator shall base this determination 
on the duration, consistency, and scale of 
such person’s purchases of consumption al-
lowances in the secondary pool under sub-
paragraph (D)(ii)(III), as well as economic 
or technical hardship and other factors 
deemed relevant by the Administrator. 
‘‘(IV) The Administrator shall set a 
minimum bid per consumption allowance of 
the following: 
‘‘(aa) For vintage year 2012, 
$1.00. 
‘‘(bb) For vintage year 2013, 
$1.20. 
‘‘(cc) For vintage year 2014, 
$1.40. 
‘‘(dd) For vintage year 2015, 
$1.60. 
‘‘(ee) For vintage year 2016, 
$1.80. 
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‘‘(ff) For vintage year 2017, 
$2.00. 
‘‘(gg) For vintage year 2018 and 
thereafter, $2.00 adjusted for infla-
tion after vintage year 2017 based 
upon the producer price index as pub-
lished by the Department of Com-
merce. 
‘‘(ii) NON-AUCTION
SALE.—(I) For 
each calendar year, as soon as practicable 
after auction, the Administrator shall offer 
for sale the remaining consumption allow-
ances in the producer-importer pool at the 
following prices: 
‘‘(aa) A fee of $1.00 per vintage 
year 2012 allowance. 
‘‘(bb) A fee of $1.20 per vintage 
year 2013 allowance. 
‘‘(cc) A fee of $1.40 per vintage 
year 2014 allowance. 
‘‘(dd) For each vintage year 
2015 allowance, a fee equal to the av-
erage of $1.10 and the auction clear-
ing price for vintage year 2014 allow-
ances. 
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‘‘(ee) For each vintage year 2016 
allowance, a fee equal to the average 
of $1.30 and the auction clearing 
price for vintage year 2015 allow-
ances. 
‘‘(ff) For each vintage year 2017 
allowance, a fee equal to the average 
of $1.40 and the auction clearing 
price for vintage year 2016 allow-
ances. 
‘‘(gg) For each allowance of vin-
tage year 2018 and subsequent vin-
tage years, a fee equal to the auction 
clearing price for that vintage year. 
‘‘(II) The Administrator shall offer to 
sell the remaining consumption allowances 
in the producer-importer pool to producers 
of class II, group II substances and im-
porters of class II, group II substances in 
proportion to their relative allocation 
share. 
‘‘(III) Such allocation share for such 
sale shall be determined by the Adminis-
trator using such producer’s or importer’s 
annual average data on class II substances 
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from calendar years 2004, 2005, and 
2006, on a carbon dioxide equivalent basis, 
and— 
‘‘(aa) shall be based on a pro-
ducer’s production, plus importation, 
plus acquisitions and purchases from 
persons who produced class II sub-
stances in the United States during 
calendar years 2004, 2005, or 2006, 
less exportation, less transfers and 
sales to persons who produced class II 
substances in the United States dur-
ing calendar years 2004, 2005, or 
2006; and 
‘‘(bb) for an importer of class II 
substances that did not produce in the 
United States any class II substance 
during calendar years 2004, 2005, 
and 2006, shall be based on the im-
porter’s importation less exportation. 
For purposes of item (aa), the Adminis-
trator shall account for 100 percent of 
class II, group II substances and 60 per-
cent of class II, group I substances. For 
purposes of item (bb), the Administrator 
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other factors deemed relevant by the Ad-
ministrator. 
‘‘(III) The Administrator shall then 
sell any remaining consumption allowances 
to persons who produced or imported any 
class II substance during calendar year 
2004, 2005, or 2006 in the amounts re-
quested in their applications for purchase. 
If demand for such consumption allow-
ances exceeds remaining supply of such 
consumption allowances, the Administrator 
shall develop and utilize criteria for the 
sale of such consumption allowances that 
may include pro rata shares, historic pro-
duction and importation, economic or tech-
nical hardship, or other factors deemed rel-
evant by the Administrator. 
‘‘(IV) Each person who purchases 
consumption allowances in a non-auction 
sale under this subparagraph shall be re-
quired to disclose the person or entity 
sponsoring or benefitting from the pur-
chases if such person or entity is, in whole 
or in part, other than the purchaser or the 
purchaser’s employer. 
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‘‘(E) DISCRETION TO WITHHOLD ALLOW-
ANCES.—Nothing in this paragraph prevents 
the Administrator from exercising discretion to 
withhold and retire consumption allowances 
that would otherwise be available for auction or 
nonauction sale. Not later than 18 months after 
the date of enactment of this section, the Ad-
ministrator shall promulgate regulations estab-
lishing criteria for withholding and retiring con-
sumption allowances. 
‘‘(5) BANKING.—A consumption allowance or 
destruction offset credit may be used to meet the 
compliance obligation requirements of paragraph (1) 
in— 
‘‘(A) the vintage year for the allowance or 
destruction offset credit; or 
‘‘(B) any calendar year subsequent to the 
vintage year for the allowance or destruction 
offset credit. 
‘‘(6) AUCTIONS.— 
‘‘(A) INITIAL
REGULATIONS.—Not later 
than 18 months after the date of enactment of 
this section, the Administrator shall promulgate 
regulations governing the auction of allowances 
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under this section. Such regulations shall in-
clude the following requirements: 
‘‘(i) FREQUENCY; FIRST AUCTION.— 
Auctions shall be held one time per year at 
regular intervals, with the first auction to 
be held no later than October 31, 2011. 
‘‘(ii) 
AUCTION
FORMAT.—Auctions 
shall follow a single-round, sealed-bid, uni-
form price format. 
‘‘(iii) FINANCIAL
ASSURANCE.—The 
Administrator may establish financial as-
surance requirements to ensure that auc-
tion participants can and will perform on 
their bids. 
‘‘(iv) DISCLOSURE
OF
BENEFICIAL 
OWNERSHIP.—Each bidder in the auction 
shall be required to disclose the person or 
entity sponsoring or benefitting from the 
bidder’s participation in the auction if such 
person or entity is, in whole or in part, 
other than the bidder. 
‘‘(v) 
PUBLICATION
OF
INFORMA-
TION.—After the auction, the Adminis-
trator shall, in a timely fashion, publish 
the number of bidders, number of winning 
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bidders, the quantity of allowances sold, 
and the auction clearing price. 
‘‘(vi) BIDDING
LIMITS
IN
2012.—In 
the vintage year 2012 auction, no auction 
participant may, directly or in concert with 
another participant, bid for or purchase 
more allowances offered for sale at the 
auction than the greater of— 
‘‘(I) the number of allowances 
which, when added to the number of 
allowances available for purchase by 
the participant in the producer-im-
porter pool non-auction sale, would 
equal the participant’s annual average 
consumption of class II, group II sub-
stances in calendar years 2004, 2005, 
and 2006; or 
‘‘(II) the number of allowances 
equal to the product of— 
‘‘(aa) 1.20 multiplied by the 
participant’s allocation share of 
the producer-importer pool non- 
auction sale as determined under 
paragraph (4)(C)(ii); and 
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‘‘(bb) the number of vintage 
year 2012 allowances offered at 
auction. 
‘‘(vii) BIDDING
LIMITS
IN
2013.—In 
the vintage year 2013 auction, no auction 
participant may, directly or in concert with 
another participant, bid for or purchase 
more allowances offered for sale at the 
auction than the product of— 
‘‘(I) 1.15 multiplied by the ratio 
of the total number of vintage year 
2012 allowances purchased by the 
participant from the auction and from 
the producer-importer pool non-auc-
tion sale to the total number of vin-
tage year 2012 allowances in the pro-
ducer-importer pool; and 
‘‘(II) the number of vintage year 
2013 allowances offered at auction. 
‘‘(viii) BIDDING
LIMITS
IN
SUBSE-
QUENT YEARS.—In the auctions for vin-
tage year 2014 and subsequent vintage 
years, no auction participant may, directly 
or in concert with another participant, bid 
for or purchase more allowances offered 
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for sale at the auction than the product 
of— 
‘‘(I) 1.15 multiplied by the ratio 
of the highest number of allowances 
required to be held by the participant 
in any of the three prior vintage years 
to meet its compliance obligation 
under paragraph (1) to the total num-
ber of allowances in the producer-im-
porter pool for such vintage year; and 
‘‘(II) the number of allowances 
offered at auction for that vintage 
year. 
‘‘(ix) OTHER
REQUIREMENTS.—The 
Administrator may include in the regula-
tions such other requirements or provisions 
as the Administrator considers necessary 
to promote effective, efficient, transparent, 
and fair administration of auctions under 
this section. 
‘‘(B) REVISION
OF
REGULATIONS.—The 
Administrator may, at any time, revise the ini-
tial regulations promulgated under subpara-
graph (A) based on the Administrator’s experi-
ence in administering allowance auctions by 
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promulgating new regulations. Such revised reg-
ulations need not meet the requirements identi-
fied in subparagraph (A) if the Administrator 
determines that an alternative auction design 
would be more effective, taking into account 
factors including costs of administration, trans-
parency, fairness, and risks of collusion or ma-
nipulation. In determining whether and how to 
revise the initial regulations under this para-
graph, the Administrator shall not consider 
maximization of revenues to the Federal Gov-
ernment. 
‘‘(C) DELEGATION OR CONTRACT.—Pursu-
ant to regulations under this section, the Ad-
ministrator may, by delegation or contract, pro-
vide for the conduct of auctions under the Ad-
ministrator’s supervision by other departments 
or agencies of the Federal Government or by 
nongovernmental agencies, groups, or organiza-
tions. 
‘‘(7) PAYMENTS FOR ALLOWANCES.— 
‘‘(A) INITIAL
REGULATIONS.—Not later 
than 18 months after the date of enactment of 
this section, the Administrator shall promulgate 
regulations governing the payment for allow-
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ances purchased in auction and non-auction 
sales under this section. Such regulations shall 
include the requirement that, in the event that 
full payment for purchased allowances is not 
made on the date of purchase, equal payments 
shall be made one time per calendar quarter 
with all payments for allowances of a vintage 
year made by the end of that vintage year. 
‘‘(B) REVISION OF REGULATIONS.— The 
Administrator may, at any time, revise the ini-
tial regulations promulgated under subpara-
graph (A) based on the Administrator’s experi-
ence in administering collection of payments by 
promulgating new regulations. Such revised reg-
ulations need not meet the requirements identi-
fied in subparagraph (A) if the Administrator 
determines that an alternative payment struc-
ture or frequency would be more effective, tak-
ing into account factors including cost of ad-
ministration, transparency, and fairness. In de-
termining whether and how to revise the initial 
regulations under this paragraph, the Adminis-
trator shall not consider maximization of reve-
nues to the Federal Government. 
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‘‘(C) PENALTIES
FOR
NON-PAYMENT.— 
Failure to pay for purchased allowances in ac-
cordance with the regulations promulgated pur-
suant to this paragraph shall be a violation of 
the requirements of subsection (b). Section 
113(c)(3) shall apply in the case of any person 
who knowingly fails to pay for purchased allow-
ances in accordance with the regulations pro-
mulgated pursuant to this paragraph. 
‘‘(8) IMPORTED
PRODUCTS.—If the United 
States becomes a party or otherwise adheres to a 
multilateral agreement, including any amendment to 
the Montreal Protocol on Substances That Deplete 
the Ozone Layer, which restricts the production or 
consumption of class II, group II substances— 
‘‘(A) as of the date on which such agree-
ment or amendment enters into force, it shall 
no longer be unlawful for any person to import 
from a party to such agreement or amendment 
any product containing any class II, group II 
substance whose production or consumption is 
regulated by such agreement or amendment 
without holding one consumption allowance or 
one destruction offset credit for each carbon di-
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oxide equivalent ton of the class II, group II 
substance; 
‘‘(B) the Administrator shall promulgate 
regulations within 12 months of the date the 
United States becomes a party or otherwise ad-
heres to such agreement or amendment, or the 
date on which such agreement or amendment 
enters into force, whichever is later, to establish 
a new baseline for purposes of paragraph (2), 
which new baseline shall be the original baseline 
less the carbon dioxide equivalent of the annual 
average quantity of any class II substances reg-
ulated by such agreement or amendment con-
tained in products imported from parties to 
such agreement or amendment in calendar 
years 2004, 2005, and 2006; 
‘‘(C) as of the date on which such agree-
ment or amendment enters into force, no per-
son importing any product containing any class 
II, group II substance may, directly or in con-
cert with another person, purchase any con-
sumption allowances for sale by the Adminis-
trator for the importation of products from a 
party to such agreement or amendment that 
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contain any class II, group II substance re-
stricted by such agreement or amendment; and 
‘‘(D) the Administrator may adjust the 
two allowance pools established in paragraph 
(4) such that up to 90 percent of the consump-
tion allowances available for a calendar year are 
placed in the producer-importer pool with the 
remaining consumption allowances placed in the 
secondary pool. 
‘‘(9) OFFSETS.— 
‘‘(A) CHLOROFLUOROCARBON
DESTRUC-
TION.—Within 18 months after the date of en-
actment of this section, the Administrator shall 
promulgate regulations to provide for the 
issuance of offset credits for the destruction, in 
the 
calendar 
year 
2012 
or 
later, 
of 
chlorofluorocarbons in the United States. The 
Administrator shall establish and distribute to 
the destroying entity a quantity of destruction 
offset credits equal to 0.8 times the number of 
metric tons of carbon dioxide equivalents of re-
duction achieved through the destruction. No 
destruction offset credits shall be established 
for the destruction of a class II, group II sub-
stance. 
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‘‘(B) DEFINITION.—For purposes of this 
paragraph, the term ‘destruction’ means the 
conversion of a substance by thermal, chemical, 
or other means to another substance with little 
or no carbon dioxide equivalent value and no 
ozone depletion potential. 
‘‘(C) REGULATIONS.—The regulations pro-
mulgated under this paragraph shall include 
standards and protocols for project eligibility, 
certification of destroyers, monitoring, tracking, 
destruction efficiency, quantification of project 
and baseline emissions and carbon dioxide 
equivalent value, and verification. The Adminis-
trator shall ensure that destruction offset cred-
its represent real and verifiable destruction of 
chlorofluorocarbons or other class I or class II, 
group I, substances authorized under subpara-
graph (D). 
‘‘(D) OTHER SUBSTANCES.—The Adminis-
trator may promulgate regulations to add to the 
list of class I and class II, group I, substances 
that may be destroyed for destruction offset 
credits, taking into account a candidate sub-
stance’s carbon dioxide equivalent value, ozone 
depletion potential, prevalence in banks in the 
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822 
United States, and emission rates, as well as 
the need for additional cost containment under 
the class II, group II cap and the integrity of 
the class II, group II cap. The Administrator 
shall not add a class I or class II, group I sub-
stance to the list if the consumption of the sub-
stance has not been completely phased-out 
internationally (except for essential use exemp-
tions or other similar exemptions) pursuant to 
the Montreal Protocol. 
‘‘(E) EXTENSION OF OFFSETS.—(i) At any 
time after the Administrator promulgates regu-
lations pursuant to subparagraph (A), the Ad-
ministrator may, pursuant to the requirements 
of part D of title VII and based on the carbon 
dioxide equivalent value of the substance de-
stroyed, add the types of destruction projects 
authorized to receive destruction offset credits 
under this paragraph to the list of types of 
projects eligible for offset credits under section 
733. If such projects are added to the list under 
section 733, the issuance of offset credits for 
such projects under part D of title VII shall be 
governed by the requirements of such part D, 
while the issuance of offset credits for such 
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projects under this paragraph shall be governed 
by the requirements of this paragraph. Nothing 
in this paragraph shall affect the issuance of 
offset credits under section 740. 
‘‘(ii) The Administrator shall not make the 
addition under clause (i) unless the Adminis-
trator finds that insufficient destruction is oc-
curring or is projected to occur under this para-
graph and that the addition would increase de-
struction. 
‘‘(iii) In no event shall more than one de-
struction offset credit be issued under title VII 
and this section for the destruction of the same 
quantity of a substance. 
‘‘(10) LEGAL
STATUS
OF
ALLOWANCES
AND 
CREDITS.—None of the following constitutes a prop-
erty right: 
‘‘(A) A production or consumption allow-
ance. 
‘‘(B) A destruction offset credit. 
‘‘(c) 
DEADLINES
FOR
COMPLIANCE.—Notwith-
standing the deadlines specified for class II substances in 
sections 608, 609, 610, 612, and 613 that occur prior to 
January 1, 2009, the deadline for promulgating regula-
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tions under those sections for class II, group II substances 
shall be January 1, 2012. 
‘‘(d) EXCEPTIONS FOR ESSENTIAL USES.—Notwith-
standing any phase down of production and consumption 
required by this section, to the extent consistent with any 
applicable multilateral agreement to which the United 
States is a party or otherwise adheres, the Administrator 
may provide the following exceptions for essential uses: 
‘‘(1) MEDICAL
DEVICES.—The Administrator, 
after notice and opportunity for public comment, 
and in consultation with the Commissioner of the 
Food and Drug Administration, may provide an ex-
ception for the production and consumption of class 
II, group II substances solely for use in medical de-
vices. 
‘‘(2) AVIATION AND SPACE VEHICLE SAFETY.— 
The Administrator, after notice and opportunity for 
public comment, may authorize the production and 
consumption of limited quantities of class II, group 
II substances solely for the purposes of aviation or 
space vehicle safety if either the Administrator of 
the Federal Aviation Administration or the Adminis-
trator of the National Aeronautics and Space Ad-
ministration, in consultation with the Administrator, 
determines that no safe and effective substitute has 
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been developed and that such authorization is nec-
essary for aviation or space flight safety purposes. 
‘‘(e) DEVELOPING
COUNTRIES.—Notwithstanding 
any phase down of production required by this section, the 
Administrator, after notice and opportunity for public 
comment, may authorize the production of limited quan-
tities of class II, group II substances in excess of the 
amounts otherwise allowable under this section solely for 
export to, and use in, developing countries. Any produc-
tion authorized under this subsection shall be solely for 
purposes of satisfying the basic domestic needs of such 
countries as provided in applicable international agree-
ments, if any, to which the United States is a party or 
otherwise adheres. 
‘‘(f) NATIONAL
SECURITY; FIRE
SUPPRESSION, 
ETC.—The provisions of subsection (f) and paragraphs (1) 
and (2) of subsection (g) of section 604 shall apply to any 
consumption and production phase down of class II, group 
II substances in the same manner and to the same extent, 
consistent with any applicable international agreement to 
which the United States is a party or otherwise adheres, 
as such provisions apply to the substances specified in 
such subsection. 
‘‘(g) ACCELERATED SCHEDULE.—In lieu of section 
606, the provisions of paragraphs (1), (2), and (3) of this 
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subsection shall apply in the case of class II, group II sub-
stances. 
‘‘(1) IN
GENERAL.—The Administrator shall 
promulgate initial regulations not later than 18 
months after the date of enactment of this section, 
and revised regulations any time thereafter, which 
establish a schedule for phasing down the consump-
tion (and, if the condition in subsection (b)(1)(B) is 
met, the production) of class II, group II substances 
that is more stringent than the schedule set forth in 
this section if, based on the availability of sub-
stitutes, the Administrator determines that such 
more stringent schedule is practicable, taking into 
account technological achievability, safety, and other 
factors the Administrator deems relevant, or if the 
Montreal Protocol, or any applicable international 
agreement to which the United States is a party or 
otherwise adheres, is modified or established to in-
clude a schedule or other requirements to control or 
reduce production, consumption, or use of any class 
II, group II substance more rapidly than the appli-
cable schedule under this section. 
‘‘(2) PETITION.—Any person may submit a pe-
tition to promulgate regulations under this sub-
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section in the same manner and subject to the same 
procedures as are provided in section 606(b). 
‘‘(3) INCONSISTENCY.—If the Administrator de-
termines that the provisions of this section regarding 
banking, allowance rollover, or destruction offset 
credits create a significant potential for inconsist-
ency with the requirements of any applicable inter-
national agreement to which the United States is a 
party or otherwise adheres, the Administrator may 
promulgate regulations restricting the availability of 
banking, allowance rollover, or destruction offset 
credits to the extent necessary to avoid such incon-
sistency. 
‘‘(h) EXCHANGE.—Section 607 shall not apply in the 
case of class II, group II substances. Production and con-
sumption allowances for class II, group II substances may 
be freely exchanged or sold but may not be converted into 
allowances for class II, group I substances. 
‘‘(i) LABELING.—(1) In applying section 611 to prod-
ucts containing or manufactured with class II, group II 
substances, in lieu of the words ‘destroying ozone in the 
upper atmosphere’ on labels required under section 611 
there shall be substituted the words ‘contributing to global 
warming’. 
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‘‘(2) The Administrator may, through rulemaking, 
exempt from the requirements of section 611 products 
containing or manufactured with class II, group II sub-
stances determined to have little or no carbon dioxide 
equivalent value compared to other substances used in 
similar products. 
‘‘(j) NONESSENTIAL PRODUCTS.—For the purposes 
of section 610, class II, group II substances shall be regu-
lated under section 610(b), except that in applying section 
610(b) the word ‘hydrofluorocarbon’ shall be substituted 
for the word ‘chlorofluorocarbon’ and the term ‘class II, 
group II’ shall be substituted for the term ‘class I’. Class 
II, group II substances shall not be subject to the provi-
sions of section 610(d). 
‘‘(k) INTERNATIONAL TRANSFERS.—In the case of 
class II, group II substances, in lieu of section 616, this 
subsection shall apply. To the extent consistent with any 
applicable international agreement to which the United 
States is a party or otherwise adheres, including any 
amendment to the Montreal Protocol, the United States 
may engage in transfers with other parties to such agree-
ment or amendment under the following conditions: 
‘‘(1) The United States may transfer produc-
tion allowances to another party to such agreement 
or amendment if, at the time of the transfer, the 
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Administrator establishes revised production limits 
for the United States accounting for the transfer in 
accordance with regulations promulgated pursuant 
to this subsection. 
‘‘(2) The United States may acquire production 
allowances from another party to such agreement or 
amendment if, at the time of the transfer, the Ad-
ministrator finds that the other party has revised its 
domestic production limits in the same manner as 
provided with respect to transfers by the United 
States in the regulations promulgated pursuant to 
this subsection. 
‘‘(l) RELATIONSHIP TO OTHER LAWS.— 
‘‘(1) STATE
LAWS.—For purposes of section 
116, the requirements of this section for class II, 
group II substances shall be treated as requirements 
for the control and abatement of air pollution. 
‘‘(2) MULTILATERAL
AGREEMENTS.—Section 
614 shall apply to the provisions of this section con-
cerning class II, group II substances, except that for 
the words ‘Montreal Protocol’ there shall be sub-
stituted the words ‘Montreal Protocol, or any appli-
cable multilateral agreement to which the United 
States is a party or otherwise adheres that restricts 
the production or consumption of class II, group II 
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substances,’ and for the words ‘Article 4 of the Mon-
treal Protocol’ there shall be substituted ‘any provi-
sion of such multilateral agreement regarding trade 
with non-parties’. 
‘‘(3) FEDERAL
FACILITIES.—For purposes of 
section 118, the requirements of this section for 
class II, group II substances and corresponding 
State, interstate, and local requirements, administra-
tive authority, and process and sanctions shall be 
treated as requirements for the control and abate-
ment of air pollution within the meaning of section 
118. 
‘‘(m) CARBON DIOXIDE EQUIVALENT VALUE.—(1) 
In lieu of section 602(e), the provisions of this subsection 
shall apply in the case of class II, group II substances. 
Simultaneously with establishing the list of class II, group 
II substances, and simultaneously with any addition to 
that list, the Administrator shall publish the carbon diox-
ide equivalent value of each listed class II, group II sub-
stance, based on a determination of the number of metric 
tons of carbon dioxide that makes the same contribution 
to global warming over 100 years as 1 metric ton of each 
class II, group II substance. 
‘‘(2) Not later than February 1, 2017, and not less 
than every 5 years thereafter, the Administrator shall— 
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‘‘(A) review, and if appropriate, revise the car-
bon dioxide equivalent values established for class II, 
group II substances based on a determination of the 
number of metric tons of carbon dioxide that makes 
the same contributions to global warming over 100 
years as 1 metric ton of each class II, group II sub-
stance; and 
‘‘(B) publish in the Federal Register the results 
of that review and any revisions. 
‘‘(3) A revised determination published in the Federal 
Register under paragraph (2)(B) shall take effect for pro-
duction of class II, group II substances, consumption of 
class II, group II substances, and importation of products 
containing class II, group II substances starting on Janu-
ary 1 of the first calendar year starting at least 9 months 
after the date on which the revised determination was pub-
lished. 
‘‘(4) The Administrator may decrease the frequency 
of review and revision under paragraph (2) if the Adminis-
trator determines that such decrease is appropriate in 
order to synchronize such review and revisions with any 
similar review process carried out pursuant to the United 
Nations Framework Convention on Climate Change, an 
agreement negotiated under that convention, The Vienna 
Convention for the Protection of the Ozone Layer, or an 
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agreement negotiated under that convention, except that 
in no event shall the Administrator carry out such review 
and revision any less frequently than every 10 years. 
‘‘(n) REPORTING REQUIREMENTS.—In lieu of sub-
sections (b) and (c) of section 603, paragraphs (1) and 
(2) of this subsection shall apply in the case of class II, 
group II substances: 
‘‘(1) IN GENERAL.—On a quarterly basis, or 
such other basis (not less than annually) as deter-
mined by the Administrator, each person who pro-
duced, imported, or exported a class II, group II 
substance, or who imported a product containing a 
class II, group II substance, shall file a report with 
the Administrator setting forth the carbon dioxide 
equivalent amount of the substance that such person 
produced, imported, or exported, as well as the 
amount that was contained in products imported by 
that person, during the preceding reporting period. 
Each such report shall be signed and attested by a 
responsible officer. If all other reporting is complete, 
no such report shall be required from a person after 
April 1 of the calendar year after such person per-
manently ceases production, importation, and expor-
tation of the substance, as well as importation of 
products containing the substance, and so notifies 
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the Administrator in writing. If the United States 
becomes a party or otherwise adheres to a multilat-
eral agreement, including any amendment to the 
Montreal Protocol on Substances That Deplete the 
Ozone Layer, that restricts the production or con-
sumption of class II, group II substances, then, if all 
other reporting is complete, no such report shall be 
required from a person with respect to importation 
from parties to such agreement or amendment of 
products containing any class II, group II substance 
restricted by such agreement or amendment, after 
April 1 of the calendar year following the year dur-
ing which such agreement or amendment enters into 
force. 
‘‘(2) BASELINE REPORTS FOR CLASS II, GROUP 
II SUBSTANCES.— 
‘‘(A) IN GENERAL.—Unless such informa-
tion has been previously reported to the Admin-
istrator, on the date on which the first report 
under paragraph (1) of this subsection is re-
quired to be filed, each person who produced, 
imported, or exported a class II, group II sub-
stance, or who imported a product containing a 
class II substance, (other than a substance 
added to the list of class II, group II substances 
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after the publication of the initial list of such 
substances under this section), shall file a re-
port with the Administrator setting forth the 
amount of such substance that such person pro-
duced, imported, exported, or that was con-
tained in products imported by that person, 
during each of calendar years 2004, 2005, and 
2006. 
‘‘(B) PRODUCERS.—In reporting under 
subparagraph (A), each person who produced in 
the United States a class II substance during 
calendar years 2004, 2005, or 2006 shall— 
‘‘(i) report all acquisitions or pur-
chases of class II substances during each 
of calendar years 2004, 2005, and 2006 
from all other persons who produced in the 
United States a class II substance during 
calendar years 2004, 2005, or 2006, and 
supply evidence of such acquisitions and 
purchases as deemed necessary by the Ad-
ministrator; and 
‘‘(ii) report all transfers or sales of 
class II substances during each of calendar 
years 2004, 2005, and 2006 to all other 
persons who produced in the United States 
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a class II substance during calendar years 
2004, 2005, or 2006, and supply evidence 
of such transfers and sales as deemed nec-
essary by the Administrator. 
‘‘(C) ADDED SUBSTANCES.—In the case of 
a substance added to the list of class II, group 
II substances after publication of the initial list 
of such substances under this section, each per-
son who produced, imported, exported, or im-
ported products containing such substance in 
calendar year 2004, 2005, or 2006 shall file a 
report with the Administrator within 180 days 
after the date on which such substance is added 
to the list, setting forth the amount of the sub-
stance that such person produced, imported, 
and exported, as well as the amount that was 
contained in products imported by that person, 
in calendar years 2004, 2005, and 2006. 
‘‘(o) STRATOSPHERIC OZONE AND CLIMATE PROTEC-
TION FUND.— 
‘‘(1) IN GENERAL.—There is established in the 
Treasury of the United States a Stratospheric Ozone 
and Climate Protection Fund. 
‘‘(2) DEPOSITS.—The Administrator shall de-
posit all proceeds from the auction and non-auction 
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sale of allowances under this section into the Strato-
spheric Ozone and Climate Protection Fund. 
‘‘(3) USE.—Amounts deposited into the Strato-
spheric Ozone and Climate Protection Fund shall be 
available, subject to appropriations, exclusively for 
the following purposes: 
‘‘(A) RECOVERY, RECYCLING, AND
REC-
LAMATION.—The Administrator may utilize 
funds to establish a program to incentivize the 
recovery, recycling, and reclamation of any 
Class II substances in order to reduce emissions 
of such substances. 
‘‘(B) 
MULTILATERAL
FUND.—If 
the 
United States becomes a party or otherwise ad-
heres to a multilateral agreement, including any 
amendment to the Montreal Protocol on Sub-
stances That Deplete the Ozone Layer, which 
restricts the production or consumption of class 
II, group II substances, the Administrator may 
utilize funds to meet any related contribution 
obligation of the United States to the Multilat-
eral Fund for the Implementation of the Mon-
treal Protocol or similar multilateral fund es-
tablished under such multilateral agreement. 
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‘‘(C) BEST-IN-CLASS APPLIANCES DEPLOY-
MENT PROGRAM.—The Secretary of Energy is 
authorized to utilize funds to carry out the pur-
poses of section 214 of the American Clean En-
ergy and Security Act of 2009. 
‘‘(D) LOW
GLOBAL
WARMING
PRODUCT 
TRANSITION ASSISTANCE PROGRAM.— 
‘‘(i) IN
GENERAL.—The Adminis-
trator, in consultation with the Secretary 
of Energy, may utilize funds in fiscal years 
2012 through 2022 to establish a program 
to provide financial assistance to manufac-
turers of products containing class II, 
group II substances to facilitate the transi-
tion to products that contain or utilize al-
ternative substances with no or low carbon 
dioxide equivalent value and no ozone de-
pletion potential. 
‘‘(ii) DEFINITION.—In this subpara-
graph, the term ‘products’ means refrig-
erators, freezers, dehumidifiers, air condi-
tioners, foam insulation, technical aerosols, 
fire protection systems, and semiconduc-
tors. 
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‘‘(iii) FINANCIAL
ASSISTANCE.—The 
Administrator may provide financial assist-
ance to manufacturers pursuant to clause 
(i) for— 
‘‘(I) the design and configuration 
of new products that use alternative 
substances with no or low carbon di-
oxide equivalent value and no ozone 
depletion potential; and 
‘‘(II) the redesign and retooling 
of facilities for the manufacture of 
products in the United States that use 
alternative substances with no or low 
carbon dioxide equivalent value and 
no ozone depletion potential. 
‘‘(iv) REPORTS.—For any fiscal year 
during which the Administrator provides 
financial assistance pursuant to this sub-
paragraph, the Administrator shall submit 
a report to the Congress within 3 months 
of the end of such fiscal year detailing the 
amounts, recipients, specific purposes, and 
results of the financial assistance pro-
vided.’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
title VI of the Clean Air Act (42 U.S.C. 7671 et seq.) 
is amended by adding the following new item at the end 
thereof: 
‘‘Sec. 619. Hydrofluorocarbons (HFCs).’’. 
(c) FIRE SUPPRESSION AGENTS.—Section 605(a) of 
the Clean Air Act (42 U.S.C. 7671(a)) is amended— 
(1) by striking ‘‘or’’ at the end of paragraph 
(2); 
(2) by striking the period at the end of para-
graph (3) and inserting ‘‘; or’’; and 
(3) by adding the following new paragraph after 
paragraph (3): 
‘‘(4) is listed as acceptable for use as a fire sup-
pression agent for nonresidential applications in ac-
cordance with section 612(c).’’. 
(d) MOTOR VEHICLE AIR CONDITIONERS.— 
(1) Section 609(e) of the Clean Air Act (42 
U.S.C. 7671h(e)) is amended by inserting ‘‘, group 
I’’ after each reference to ‘‘class II’’ in the text and 
heading. 
(2) Section 609 of the Clean Air Act (42 U.S.C. 
7671h) is amended by adding the following new sub-
section after subsection (e): 
‘‘(f) CLASS II, GROUP II SUBSTANCES.— 
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‘‘(1) REPAIR.—The Administrator may promul-
gate regulations establishing requirements for repair 
of motor vehicle air conditioners prior to adding a 
class II, group II substance. 
‘‘(2) SMALL CONTAINERS.—(A) The Adminis-
trator may promulgate regulations establishing serv-
icing practices and procedures for recovery of class 
II, group II substances from containers which con-
tain less than 20 pounds of such class II, group II 
substances. 
‘‘(B) Not later than 18 months after enactment 
of this subsection, the Administrator shall either 
promulgate regulations requiring that containers 
which contain less than 20 pounds of a class II, 
group II substance be equipped with a device or 
technology that limits refrigerant emissions and 
leaks from the container and limits refrigerant emis-
sions and leaks during the transfer of refrigerant 
from the container to the motor vehicle air condi-
tioner or issue a determination that such require-
ments are not necessary or appropriate. 
‘‘(C) Not later than 18 months after enactment 
of this subsection, the Administrator shall promul-
gate regulations establishing requirements for con-
sumer education materials on best practices associ-
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ated with the use of containers which contain less 
than 20 pounds of a class II, group II substance and 
prohibiting the sale or distribution, or offer for sale 
or distribution, of any class II, group II substance 
in any container which contains less than 20 pounds 
of such class II, group II substance, unless con-
sumer education materials consistent with such re-
quirements are displayed and available at point-of- 
sale locations, provided to the consumer, or included 
in or on the packaging of the container which con-
tain less than 20 pounds of a class II, group II sub-
stance. 
‘‘(D) The Administrator may, through rule-
making, extend the requirements established under 
this paragraph to containers which contain 30 
pounds or less of a class II, group II substance if 
the Administrator determines that such action would 
produce significant environmental benefits. 
‘‘(3) RESTRICTION OF SALES.—Effective Janu-
ary 1, 2014, no person may sell or distribute or offer 
to sell or distribute or otherwise introduce into inter-
state commerce any motor vehicle air conditioner re-
frigerant in any size container unless the substance 
has been found acceptable for use in a motor vehicle 
air conditioner under section 612.’’. 
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(e) SAFE ALTERNATIVES POLICY.—Section 612(e) of 
the Clean Air Act (42 U.S.C. 7671k(e)) is amended by 
inserting ‘‘or class II’’ after each reference to ‘‘class I’’. 
SEC. 333. BLACK CARBON. 
(a) DEFINITION.—As used in this section, the term 
‘‘black carbon’’ means primary light absorbing aerosols, 
as defined by the Administrator, based on the best avail-
able science. 
(b) BLACK CARBON ABATEMENT REPORT.—Not 
later than one year after the date of enactment of this 
section, the Administrator shall, in consultation with other 
appropriate Federal agencies, submit to Congress a report 
regarding black carbon emissions. The report shall include 
the following: 
(1) A summary of the current information and 
research that identifies— 
(A) an inventory of the major sources of 
black carbon emissions in the United States 
and throughout the world, including— 
(i) an estimate of the quantity of cur-
rent and projected future emissions; and 
(ii) the net climate forcing of the 
emissions from such sources, including 
consideration of co-emissions of other pol-
lutants; 
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(B) effective and cost-effective control 
technologies, operations, and strategies for ad-
ditional domestic and international black carbon 
emissions reductions, such as diesel retrofit 
technologies on existing on-road, non-road, and 
stationary engines and programs to address res-
idential cookstoves, and forest and agriculture- 
based burning; 
(C) potential metrics and approaches for 
quantifying the climatic effects of black carbon 
emissions, including its radiative forcing and 
warming effects, that may be used to compare 
the climate benefits of different mitigation 
strategies, including an assessment of the un-
certainty in such metrics and approaches; and 
(D) the public health and environmental 
benefits associated with additional controls for 
black carbon emissions. 
(2) Recommendations regarding— 
(A) development of additional emissions 
monitoring techniques and capabilities, mod-
eling, and other black carbon-related areas of 
study; 
(B) areas of focus for additional study of 
technologies, operations, and strategies with the 
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greatest potential to reduce emissions of black 
carbon and associated public health, economic, 
and environmental impacts associated with 
these emissions; and 
(C) actions, in addition to those identified 
by the Administrator under section 851 of the 
Clean Air Act (as added by subsection (c)), the 
Federal Government may take to encourage or 
require reductions in black carbon emissions. 
(c) BLACK CARBON MITIGATION.—Title VIII of the 
Clean Air Act, as added by section 331 of this Act, and 
amended by section 222 of this Act, is further amended 
by adding after part D the following new part: 
‘‘PART E—BLACK CARBON 
‘‘SEC. 851. BLACK CARBON. 
‘‘(a) DOMESTIC BLACK CARBON MITIGATION.—Not 
later than 18 months after the date of enactment of this 
section, the Administrator, taking into consideration the 
public health and environmental impacts of black carbon 
emissions, including the effects on global and regional 
warming, the Arctic, and other snow and ice-covered sur-
faces, shall propose regulations under the existing authori-
ties of this Act to reduce emissions of black carbon or pro-
pose a finding that existing regulations promulgated pur-
suant to this Act adequately regulate black carbon emis-
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sions. Not later than two years after the date of enactment 
of this section, the Administrator shall promulgate final 
regulations under the existing authorities of this Act or 
finalize the proposed finding. Such regulations shall not 
apply to specific types, classes, categories, or other suit-
able groupings of emissions sources that the Adminis-
trator finds are subject to adequate regulation. 
‘‘(b) INTERNATIONAL
BLACK
CARBON
MITIGA-
TION.— 
‘‘(1) REPORT.—Not later than one year after 
the date of enactment of this section, the Adminis-
trator, in coordination with the Secretary of State 
and other appropriate Federal agencies, shall trans-
mit a report to Congress on the amount, type, and 
direction of all present United States financial, tech-
nical, and related assistance to foreign countries to 
reduce, mitigate, and otherwise abate black carbon 
emissions. 
‘‘(2) OTHER OPPORTUNITIES.—The report re-
quired under paragraph (1) shall also identify oppor-
tunities and recommendations, including action 
under existing authorities, to achieve significant 
black carbon emission reductions in foreign countries 
through technical assistance or other approaches 
to— 
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‘‘(A) promote sustainable solutions to 
bring clean, efficient, safe, and affordable 
stoves, fuels, or both stoves and fuels to resi-
dents of developing countries that are reliant on 
solid fuels such as wood, dung, charcoal, coal, 
or crop residues for home cooking and heating, 
so as to help reduce the public health, environ-
mental, and economic impacts of black carbon 
emissions from these sources by— 
‘‘(i) identifying key regions for large- 
scale demonstration efforts, and key part-
ners in each such region; and 
‘‘(ii) developing for each such region a 
large-scale implementation strategy with a 
goal of collectively reaching 20,000,000 
homes over 5 years with interventions that 
will— 
‘‘(I) increase stove efficiency by 
over 50 percent (or such other goal as 
determined by the Administrator); 
‘‘(II) reduce emissions of black 
carbon by over 60 percent (or such 
other goal as determined by the Ad-
ministrator); and 
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‘‘(III) reduce the incidence of se-
vere pneumonia in children under 5 
years old by over 30 percent (or such 
other goal as determined by the Ad-
ministrator); 
‘‘(B) make technological improvements to 
diesel engines and provide greater access to 
fuels that emit less or no black carbon; 
‘‘(C) reduce unnecessary agricultural or 
other biomass burning where feasible alter-
natives exist; 
‘‘(D) reduce unnecessary fossil fuel burn-
ing that produces black carbon where feasible 
alternatives exist; 
‘‘(E) reduce other sources of black carbon 
emissions; and 
‘‘(F) improve capacity to achieve greater 
compliance with existing laws to address black 
carbon emissions.’’. 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
SEC. 334. STATES. 
Section 116 of the Clean Air Act (42 U.S.C. 7416) 
is amended by adding the following at the end thereof: 
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‘‘For the purposes of this section, the phrases ‘standard 
or limitation respecting emissions of air pollutants’ and 
‘requirements respecting control or abatement of air pollu-
tion’ shall include any provision to: cap greenhouse gas 
emissions, require surrender to the State or a political 
subdivision thereof of emission allowances or offset credits 
established or issued under this Act, and require the use 
of such allowances or credits as a means of demonstrating 
compliance with requirements established by a State or 
political subdivision thereof.’’. 
SEC. 335. STATE PROGRAMS. 
Title VIII of the Clean Air Act, as added by section 
331 of this Act and amended by several sections of this 
Act, is further amended by adding after part E (as added 
by section 333(c) of this Act) the following new part: 
‘‘PART F—MISCELLANEOUS 
‘‘SEC. 861. STATE PROGRAMS. 
‘‘Notwithstanding section 116, no State or political 
subdivision thereof shall implement or enforce a cap and 
trade program that covers any capped emissions emitted 
during the years 2012 through 2017. For purposes of this 
section, the term ‘cap and trade program’ means a system 
of greenhouse gas regulation under which a State or polit-
ical subdivision issues a limited number of tradable instru-
ments in the nature of emission allowances and requires 
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that sources within its jurisdiction surrender such 
tradeable instruments for each unit of greenhouse gases 
emitted during a compliance period. For purposes of this 
section, a ‘cap-and-trade program’ does not include a tar-
get or limit on greenhouse gas emissions adopted by a 
State or political subdivision that is implemented other 
than through the issuance and surrender of a limited num-
ber of tradable instruments in the nature of emission al-
lowances, nor does it include any other standard, limit, 
regulation, or program to reduce greenhouse gas emissions 
that is not implemented through the issuance and sur-
render of a limited number of tradeable instruments in 
the nature of emission allowances. For purposes of this 
section, the term ‘cap and trade program’ does not in-
clude, among other things, fleet-wide motor vehicle emis-
sion requirements that allow greater emissions with in-
creased vehicle production, or requirements that fuels, or 
other products, meet an average pollution emission rate 
or lifecycle greenhouse gas standard. 
‘‘SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CON-
TROL PROGRAMS. 
‘‘The Administrator is authorized to make grants to 
air pollution control agencies pursuant to section 105 for 
purposes of assisting in the implementation of programs 
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to address global warming established under the Safe Cli-
mate Act.’’. 
SEC. 336. ENFORCEMENT. 
(a) REMAND.—Section 307(b) of the Clean Air Act 
(42 U.S.C. 7607(b)) is amended by adding the following 
new paragraphs at the end thereof: 
‘‘(3) If the court determines that any action of 
the Administrator is arbitrary, capricious, or other-
wise unlawful, the court may remand such action, 
without vacatur, if vacatur would impair or delay 
protection of the environment or public health or 
otherwise undermine the timely achievement of the 
purposes of this Act. 
‘‘(4) If the court determines that any action of 
the Administrator is arbitrary, capricious, or other-
wise unlawful, and remands the matter to the Ad-
ministrator, the Administrator shall complete final 
action on remand within an expeditious time period 
no longer than the time originally allowed for the ac-
tion or one year, whichever is less, unless the court 
on motion determines that a shorter or longer period 
is necessary, appropriate, and consistent with the 
purposes of this Act. The court of appeals shall have 
jurisdiction to enforce a deadline for action on re-
mand under this subparagraph.’’. 
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(b) PETITION
FOR
RECONSIDERATION.—Section 
307(d)(7)(B) of the Clean Air Act (42 U.S.C. 
7607(d)(7)(B)) is amended as follows: 
(1) By inserting after the second sentence ‘‘If 
a petition for reconsideration is filed, the Adminis-
trator shall take final action on such petition, in-
cluding promulgation of final action either revising 
or determining not to revise the action for which re-
consideration is sought, within 150 days after the 
petition is received by the Administrator or the peti-
tion shall be deemed denied for the purpose of judi-
cial review.’’. 
(2) By amending the third sentence to read as 
follows: ‘‘Such person may seek judicial review of 
such denial, or of any other final action, by the Ad-
ministrator, in response to a petition for reconsider-
ation, in the United States court of appeals for the 
appropriate circuit (as provided in subsection (b)).’’. 
SEC. 337. CONFORMING AMENDMENTS. 
(a) FEDERAL ENFORCEMENT.—Section 113 of the 
Clean Air Act (42 U.S.C. 7413) is amended as follows: 
(1) In subsection (a)(3), by striking ‘‘or title 
VI,’’ and inserting ‘‘title VI, title VII, or title VIII’’. 
(2) In subsection (b), by striking ‘‘or a major 
stationary source’’ and inserting ‘‘a major stationary 
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source, or a covered EGU under title VIII’’ in the 
material preceding paragraph (1). 
(3) In paragraph (2) of subsection (b), by strik-
ing ‘‘or title VI’’ and inserting ‘‘title VI, title VII, 
or title VIII’’. 
(4) In subsection (c)— 
(A) in the first sentence of paragraph (1), 
by striking ‘‘or title VI (relating to strato-
spheric ozone control),’’ and inserting ‘‘title VI, 
title VII, or title VIII,’’; and 
(B) in the first sentence of paragraph (3), 
by striking ‘‘or VI’’ and inserting ‘‘VI, VII, or 
VIII’’. 
(5) In subsection (d)(1)(B), by striking ‘‘or VI’’ 
and inserting ‘‘VI, VII, or VIII’’. 
(6) In subsection (f), in the first sentence, by 
striking ‘‘or VI’’ and inserting ‘‘VI, VII, or VIII’’. 
(b) RETENTION
OF STATE AUTHORITY.—Section 
116 of the Clean Air Act (42 U.S.C. 7416) is amended 
as follows: 
(1) By striking ‘‘and 233’’ and inserting ‘‘233’’. 
(2) By striking ‘‘of moving sources)’’ and in-
serting ‘‘of moving sources), and 861 (preempting 
certain State greenhouse gas programs for a limited 
time)’’. 
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(c) INSPECTIONS, MONITORING, AND ENTRY.—Sec-
tion 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is 
amended by striking ‘‘section 112,’’ and all that follows 
through ‘‘(ii)’’ and inserting the following: ‘‘section 112, 
or any regulation of greenhouse gas emissions under title 
VII or VIII, (ii)’’. 
(d) ENFORCEMENT.—Subsection (f) of section 304 of 
the Clean Air Act (42 U.S.C. 7604(f)) is amended as fol-
lows: 
(1) By striking ‘‘; or’’ at the end of paragraph 
(3) thereof and inserting a comma. 
(2) By striking the period at the end of para-
graph (4) thereof and inserting ‘‘, or’’. 
(3) By adding the following after paragraph (4) 
thereof: 
‘‘(5) any requirement of title VII or VIII.’’. 
(e) ADMINISTRATIVE PROCEEDINGS AND JUDICIAL 
REVIEW.—Section 307 of the Clean Air Act (42 U.S.C. 
7607) is amended as follows: 
(1) In subsection (a), by striking ‘‘, or section 
306’’ and inserting ‘‘section 306, or title VII or 
VIII’’. 
(2) In subsection (b)(1)— 
(A) by striking ‘‘,,’’ and inserting ‘‘,’’ in 
each place such punctuation appears; and 
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(B) by striking ‘‘section 120,’’ in the first 
sentence and inserting ‘‘section 120, any final 
action under title VII or VIII,’’. 
(3) In subsection (d)(1) by amending subpara-
graph (S) to read as follows: 
‘‘(S) the promulgation or revision of any 
regulation under title VII or VIII,’’. 
SEC. 338. DAVIS-BACON COMPLIANCE. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law and in a manner consistent with other provi-
sions in this Act, to receive emission allowances or funding 
under this Act, or the amendments made by this Act, the 
recipient shall provide reasonable assurances that all la-
borers and mechanics employed by contractors and sub-
contractors on projects funded directly by or assisted in 
whole or in part by and through the Federal Government 
pursuant to this Act, or the amendments made by this 
Act, or by any entity established in accordance with this 
Act, or the amendments made by this Act, including the 
Carbon Storage Research Corporation, will be paid wages 
at rates not less than those prevailing on projects of a 
character similar in the locality as determined by the Sec-
retary of Labor in accordance with subchapter IV of chap-
ter 31 of title 40, United States Code (commonly known 
as the ‘‘Davis-Bacon Act’’). With respect to the labor 
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standards specified in this section, the Secretary of Labor 
shall have the authority and functions set forth in Reorga-
nization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 
U.S.C. App.) and section 3145 of title 40, United States 
Code. 
(b) EXEMPTION.—Neither subsection (a) nor the re-
quirements of subchapter IV of chapter 31 of title 40, 
United States Code, shall apply to retrofitting of the fol-
lowing: 
(1) Single family homes (both attached and de-
tached) under section 202. 
(2) Owner-occupied residential units in larger 
buildings that have their own dedicated space-condi-
tioning systems under section 202. 
(3) Residential buildings (as defined in section 
202(a)(5)) if designed for residential use by less 
than 4 families. 
(4) Nonresidential buildings (as defined in sec-
tion 202(a)(1)) if the net interior space of such non-
residential building is less than 6,500 square feet. 
SEC. 339. NATIONAL STRATEGY FOR DOMESTIC BIOLOGI-
CAL CARBON SEQUESTRATION. 
Not later than 1 year after the date of enactment 
of this Act, the Administrator of the Environmental Pro-
tection Agency, in consultation with the Secretary of En-
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ergy, the Secretary of Agriculture, the Secretary of the 
Interior, and the heads of such other relevant Federal 
agencies as the President may designate, shall submit to 
Congress a report setting forth a unified and comprehen-
sive strategy to address the key legal, regulatory, techno-
logical, and other barriers to maximizing the potential for 
sustainable biological sequestration of carbon within the 
United States. 
Subtitle D—Carbon Market 
Assurance 
SEC. 341. CARBON MARKET ASSURANCE. 
(a) AMENDMENT.—The Federal Power Act (16 
U.S.C. 791a and following) is amended by adding at the 
end the following: 
‘‘PART IV—CARBON MARKET ASSURANCE 
‘‘SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MAR-
KETS. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) CONTRACT OF SALE.—The term ‘contract 
of sale’ includes sales, agreements of sale, and 
agreements to sell. 
‘‘(2) COVERED ENTITY.—The term ‘covered en-
tity’ shall have the meaning given in section 700 of 
the Clean Air Act. 
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‘‘(3) FUTURE DELIVERY.—The term ‘future de-
livery’ does not include any sale of any cash com-
modity for deferred shipment or delivery. 
‘‘(4) OFFSET CREATION CONTRACT.—The term 
‘offset creation contract’ mean a written agreement 
for the origination and development of an offset 
project, and the related issuance of offset credits, 
pursuant to title VII of the Clean Air Act. 
‘‘(5) REGULATED ALLOWANCE.—The term ‘reg-
ulated allowance’ means any emission allowance, 
compensatory allowance, offset credit, or Federal re-
newable electricity credit established or issued under 
the American Clean Energy and Security Act of 
2009. 
‘‘(6) REGULATED ALLOWANCE DERIVATIVE.— 
The term ‘regulated allowance derivative’ means an 
instrument that is, or includes, an instrument— 
‘‘(A) which— 
‘‘(i) is of the character of, or is com-
monly known to the trade as, a ‘put op-
tion’, ‘call option’, ‘privilege’, ‘indemnity’, 
‘advance guaranty’, ‘decline guaranty’, or 
‘swap agreement’; or 
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‘‘(ii) is a contract of sale for future 
delivery other than an offset creation con-
tract; and 
‘‘(B) the value of which, in whole or in 
part, is expressly linked to the price of a regu-
lated allowance or another regulated allowance 
derivative. 
‘‘(7) REGULATED
INSTRUMENT.—The term 
‘regulated instrument’ means a regulated allowance 
or a regulated allowance derivative. 
‘‘(b) REGULATED ALLOWANCE MARKET.— 
‘‘(1) AUTHORITY.—The Commission shall pro-
mulgate regulations for the establishment, operation, 
and oversight of markets for regulated allowances 
not later than 18 months after the date of the enact-
ment of this section, and from time to time there-
after as may be appropriate. 
‘‘(2) REGULATIONS.—The regulations promul-
gated pursuant to paragraph (1) shall— 
‘‘(A) provide for effective and comprehen-
sive market oversight; 
‘‘(B) prohibit fraud, market manipulation 
(including an entity’s fraudulent or manipula-
tive conduct with respect to regulated allowance 
derivatives that benefits the entity in regulated 
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