SECTION 1. HOME HEATING OIL AND PROPANE CON-
SUMERS. 
(a) DEFINITIONS.—For purposes of this section: 
(1) CARBON CONTENT.—The term ‘‘carbon con-
tent’’ means the amount of carbon dioxide that will 
be emitted as a result of the combustion of a fuel. 
(2) COST-EFFECTIVE.—The term ‘‘cost-effec-
tive’’, with respect to an energy efficiency program 
or measure, means that the program or measure 
meets the Total Resource Cost Test, which requires 
that the net present value of economic benefits over 
the life of the program or measure, including avoid-
ed supply and delivery costs and deferred or avoided 
investments, is greater than the net present value of 
the economic costs over the life of the program or 
measure, including program costs and incremental 
costs borne by the energy consumer. 
(b) ALLOCATION.—Not later than September 30 of 
each of calendar years 2012 through 2030, the Adminis-
trator shall distribute among the States, in accordance 
with this section, 1.5 percent of the emission allowances 
that the Administrator has established for the year in 
which such distribution is made (adjusted as necessary to 
preserve budget neutrality). 
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(c) DISTRIBUTION AMONG STATES.—The Adminis-
trator shall distribute allowances among the States under 
this section each year ratably based on the ratio of— 
(1) the carbon content of home heating oil and 
propane sold to consumers within each State in the 
preceding year for residential or commercial uses; to 
(2) the carbon content of home heating oil and 
propane sold to consumers within the United States 
in the preceding year for residential or commercial 
uses. 
(d) SALE OF ALLOWANCES.—Each State receiving 
emission allowances under this section shall sell such al-
lowances within 1 year of receipt, either directly or 
through consignment to the Administrator for auction. 
Emission allowances distributed under this section that 
are not sold within 1 year of receipt by a State shall be 
returned to the Administrator, who shall distribute such 
allowances to the remaining States ratably in accordance 
with the formula in subsection (c). 
(e) USE OF PROCEEDS.— 
(1) IN GENERAL.—States shall use the proceeds 
from sales of emission allowances distributed under 
this section exclusively for the benefit of consumers 
of home heating oil or propane for residential or 
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commercial purposes. Such proceeds shall be used 
exclusively for— 
(A) cost-effective energy efficiency pro-
grams for consumers that use home heating oil 
or propane for residential or commercial pur-
poses; or 
(B) rebates or other direct financial assist-
ance programs for consumers of home heating 
oil or propane used for residential or commer-
cial purposes. 
(2) ADMINISTRATION
AND
DELIVERY
MECHA-
NISMS.—In administering programs funded under 
this section, States shall— 
(A) use no less than 50 percent of funds 
provided under this section for cost-effective ef-
ficiency programs to reduce consumers’ overall 
fuel costs; 
(B) use no more than 5 percent of funds 
provided under this section for administrative 
expenses; 
(C) to the extent practicable, deliver fund-
ing under this section through existing energy 
efficiency and consumer energy assistance pro-
grams or delivery mechanisms, including, where 
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appropriate, programs or mechanisms adminis-
tered by parties other than the State; 
(D) seek to coordinate the administration 
and delivery of energy efficiency and consumer 
energy assistance programs funded under this 
section, with one another and with existing pro-
grams for various fuel types, so as to deliver 
comprehensive, fuel-blind, coordinated programs 
to consumers; and 
(E) ensure that funding provided under 
this section does not displace or substitute for 
existing or alternative sources of funding for 
energy efficiency and consumer energy assist-
ance programs. 
(f) REPORTING.—Each State receiving emission al-
lowances under this section shall submit to the Adminis-
trator, within 12 months of each receipt of such allow-
ances, a report, in accordance with such requirements as 
the Administrator may prescribe, that— 
(1) describes the State’s use of proceeds of 
sales of emission allowances distributed under this 
section, including a description of the energy effi-
ciency and consumer assistance programs funded 
through such proceeds; 
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(2) demonstrates the cost-effectiveness of, and 
the energy savings achieved by, energy efficiency 
programs funded through this section; and 
(3) includes a report prepared by an inde-
pendent third party, in accordance with such regula-
tions as the Administrator may promulgate, evalu-
ating the performance of the energy efficiency and 
consumer assistance programs funded under this 
section. 
(g) ENFORCEMENT.—If the Administrator deter-
mines that a State is not in compliance with this section, 
the Administrator may withhold a portion of the allow-
ances, the value of which is equal to up to twice the value 
of the allowances that the State failed to use in accordance 
with the requirements of this section, that such State 
would otherwise be eligible to receive under this section 
in later years. Allowances withheld pursuant to this sub-
section shall be distributed among the remaining States 
ratably in accordance with the formula in subsection (c). 
Æ 
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