To use tradable greenhouse gas emission allowances under the American Clean Energy and Security Act of 2009 to provide assistance to residential and commercial consumers of home heating oil and propane in reducing the effective costs of such fuels through State programs to deliver cost-effective efficiency programs and other consumer assistance.

SECTION 1. HOME HEATING OIL AND PROPANE CONSUMERS.

    (a) Definitions.--For purposes of this section:
            (1) Carbon content.--The term ``carbon content'' 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-effective'', 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 avoided 
        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 Administrator 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).
    (c) Distribution Among States.--The Administrator 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 allowances 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 commercial purposes. Such proceeds 
        shall be used exclusively for--
                    (A) cost-effective energy efficiency programs for 
                consumers that use home heating oil or propane for 
                residential or commercial purposes; or
                    (B) rebates or other direct financial assistance 
                programs for consumers of home heating oil or propane 
                used for residential or commercial purposes.
            (2) Administration and delivery mechanisms.--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 efficiency 
                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 funding 
                under this section through existing energy efficiency 
                and consumer energy assistance programs or delivery 
                mechanisms, including, where appropriate, programs or 
                mechanisms administered 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 programs 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 assistance programs.
    (f) Reporting.--Each State receiving emission allowances under this 
section shall submit to the Administrator, within 12 months of each 
receipt of such allowances, 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 efficiency and consumer assistance 
        programs funded through such proceeds;
            (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 independent third 
        party, in accordance with such regulations as the Administrator 
        may promulgate, evaluating the performance of the energy 
        efficiency and consumer assistance programs funded under this 
        section.
    (g) Enforcement.--If the Administrator determines that a State is 
not in compliance with this section, the Administrator may withhold a 
portion of the allowances, 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 subsection shall be distributed among the 
remaining States ratably in accordance with the formula in subsection 
(c).

Summary: Directs the Administrator of the Environmental Protection Agency (EPA), by September 30 of each calendar year 2012-2030, to distribute among the states 1.5% of the emission allowances that the Administrator has established for the year.

Requires the Administrator to distribute emission allowances among the states ratably each year, 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 purposes; to (2) the carbon content of home heating oil and propane sold that year for such purposes throughout the United States.

Directs each state receiving emission allowances to sell them within one year of receipt, either directly or through consignment to the Administrator for auction. Requires any emission allowances that are not sold within one year of receipt to be returned to the Administrator, who shall distribute them to the remaining states ratably in accordance with the formula.

Requires states to use the proceeds from such sales exclusively for the benefit of consumers of home heating oil or propane for residential or commercial purposes, particularly: (1) cost-effective energy efficiency programs; or (2) rebates or other direct financial assistance programs for them.