Title: National Climate Bank Act
Policy area: Environmental Protection

Summary:
National Climate Bank Act
This bill establishes the nonprofit National Climate Bank to finance renewable energy projects, industrial decarbonization, climate resilient infrastructure, zero-emission fleets, and similar projects.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5416 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 5416

                 To establish a National Climate Bank.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 12, 2019

  Mrs. Dingell (for herself, Mr. Tonko, Ms. Blunt Rochester, and Mrs. 
    Axne) introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
Financial Services, Ways and Means, Agriculture, and Transportation and 
   Infrastructure, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
                 To establish a National Climate Bank.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Climate Bank Act''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. National Climate Bank.
                  ``Subtitle C--National Climate Bank

        ``Sec. 1621. Definitions.
        ``Sec. 1622. Establishment.
        ``Sec. 1623. Mandate.
        ``Sec. 1624. Finance and investment division.
        ``Sec. 1625. Start-up Division.
        ``Sec. 1626. Zero-emissions fleet and related infrastructure 
                            financing program.
        ``Sec. 1627. Project prioritization and requirements.
        ``Sec. 1628. Board of Directors.
        ``Sec. 1629. Administration.
        ``Sec. 1630. Establishment of risk management committee and 
                            audit committee.
        ``Sec. 1631. Oversight.
        ``Sec. 1632. Maximum contingent liability.

SEC. 3. NATIONAL CLIMATE BANK.

    Title XVI of the Energy Policy Act of 2005 (Public Law 109-58, as 
amended) is amended by adding at the end the following new subtitle:

                  ``Subtitle C--National Climate Bank

``SEC. 1621. DEFINITIONS.

    ``In this subtitle:
            ``(1) Bank.--The term `Bank' means the National Climate 
        Bank established under section 1622.
            ``(2) Board.--The term `Board' means the Board of Directors 
        of the Bank.
            ``(3) Chief executive officer.--The term `chief executive 
        officer' means the chief executive officer of the Bank.
            ``(4) Climate-impacted communities.--The term `climate-
        impacted communities' includes--
                    ``(A) communities of color, which include any 
                geographically distinct area the population of color of 
                which is higher than the average population of color of 
                the State in which the community is located;
                    ``(B) communities that are already or are likely to 
                be the first communities to feel the direct negative 
                effects of climate change;
                    ``(C) distressed neighborhoods, demonstrated by 
                indicators of need, including poverty, childhood 
                obesity rates, academic failure, and rates of juvenile 
                delinquency, adjudication, or incarceration;
                    ``(D) low-income communities, defined as any census 
                block group in which 30 percent or more of the 
                population are individuals with low income;
                    ``(E) low-income households, defined as a household 
                with annual income equal to, or less than, the greater 
                of--
                            ``(i) an amount equal to 80 percent of the 
                        median income of the area in which the 
                        household is located, as reported by the 
                        Department of Housing and Urban Development; 
                        and
                            ``(ii) 200 percent of the Federal poverty 
                        line; and
                    ``(F) rural areas, which include any area other 
                than--
                            ``(i) a city or town that has a population 
                        of greater than 50,000 inhabitants; and
                            ``(ii) any urbanized area contiguous and 
                        adjacent to a city or town described in clause 
                        (i).
            ``(5) Climate resilient infrastructure.--The term `climate 
        resilient infrastructure' means any project that builds or 
        enhances infrastructure so that such infrastructure--
                    ``(A) is planned, designed, and operated in a way 
                that anticipates, prepares for, and adapts to changing 
                climate conditions; and
                    ``(B) can withstand, respond to, and recover 
                rapidly from disruptions caused by these climate 
                conditions.
            ``(6) Electrification.--The term `electrification' means 
        the installation, construction, or use of end-use electric 
        technology that replaces existing fossil-fuel-based technology.
            ``(7) Energy efficiency.--The term `energy efficiency' 
        means any project, technology, function, or measure that 
        results in the reduction of energy use required to achieve the 
        same level of service or output prior to the application of 
        such project, technology, function, or measure, or 
        substantially reduces greenhouse gas emissions relative to 
        emissions that would have occurred prior to the application of 
        such project, technology, function, or measure.
            ``(8) Fuel switching.--The term `fuel switching' means any 
        project that replaces a fossil-fuel-based heating system with 
        an electric-powered system or one powered by biomass-generated 
        heat.
            ``(9) Green bank.--The term `green bank' means a dedicated 
        public or nonprofit specialized finance entity that--
                    ``(A) is designed to drive private capital into 
                market gaps for low- and zero-emission goods and 
                services;
                    ``(B) uses finance tools to mitigate climate 
                change;
                    ``(C) does not take deposits;
                    ``(D) is funded by government, public, private, or 
                charitable contributions; and
                    ``(E) invests or finances projects--
                            ``(i) alone; or
                            ``(ii) in conjunction with other investors.
            ``(10) Qualified projects.--The terms `qualified projects' 
        means the following kinds of technologies and activities that 
        are eligible for financing and investment from the National 
        Climate Bank, either directly or through State and local green 
        banks funded by the National Climate Bank:
                    ``(A) Renewable energy generation, including the 
                following:
                            ``(i) Solar.
                            ``(ii) Wind.
                            ``(iii) Geothermal.
                            ``(iv) Hydropower.
                            ``(v) Ocean and hydrokinetic.
                            ``(vi) Fuel cell.
                    ``(B) Building energy efficiency, fuel switching, 
                and electrification.
                    ``(C) Industrial decarbonization.
                    ``(D) Grid technology such as transmission, 
                distribution, and storage to support clean energy 
                distribution, including smart-grid applications.
                    ``(E) Agriculture projects that reduce net 
                greenhouse gas emissions including reforestation, 
                afforestation, forestry management, and regenerative 
                agriculture.
                    ``(F) Clean transportation, including the 
                following:
                            ``(i) Battery electric vehicles.
                            ``(ii) Plug-in hybrid electric vehicles.
                            ``(iii) Hydrogen vehicles.
                            ``(iv) Other zero-emissions fueled 
                        vehicles.
                            ``(v) Related vehicle charging and fueling 
                        infrastructure.
                    ``(G) Climate resilient infrastructure.
                    ``(H) Any other key areas identified by the Board 
                as consistent with the mandate of the Bank as described 
                in section 1623.
            ``(11) Renewable energy generation.--The term `renewable 
        energy generation' means electricity created by sources that 
        are continually replenished by nature, such as the sun, wind, 
        and water.

``SEC. 1622. ESTABLISHMENT.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of this subtitle, there shall be established a nonprofit 
corporation to be known as the `National Climate Bank'.
    ``(b) Limitation.--The Bank shall not be an agency or 
instrumentality of the Federal Government.
    ``(c) Full Faith and Credit.--The full faith and credit of the 
United States shall not extend to the Bank.
    ``(d) Nonprofit Status.--The Bank shall--
            ``(1) be an organization described in section 501(c) of the 
        Internal Revenue Code of 1986 and exempt from taxation under 
        section 501(a) of that Code;
            ``(2) ensure that no part of the income or assets of the 
        Bank shall inure to the benefit of any director, officer, or 
        employee, except as reasonable compensation for services or 
        reimbursement for expenses; and
            ``(3) not contribute to or otherwise support any political 
        party or candidate for elective office.

``SEC. 1623. MANDATE.

    ``The Bank shall make the United States a world leader in combating 
the causes and effects of climate change through the rapid deployment 
of mature technologies and the commercialization and scaling of new 
technologies by maximizing the reduction of emissions in the United 
States for every dollar deployed by the Bank, including by--
            ``(1) providing financing support for investments in the 
        United States in low- and zero-emissions technologies and 
        processes in order to rapidly accelerate market penetration;
            ``(2) catalyzing and mobilizing private capital through 
        Federal investment and supporting a more robust marketplace for 
        clean technologies, while minimizing competition with private 
        investment;
            ``(3) enabling climate-impacted communities to benefit from 
        and afford projects and investments that reduce emissions;
            ``(4) providing support for workers and communities 
        impacted by the transition to a low-carbon economy;
            ``(5) supporting the creation of green banks within the 
        United States where green banks do not exist; and
            ``(6) causing the rapid transition to a clean energy 
        economy without raising energy costs to end users and seeking 
        to lower costs where possible.

``SEC. 1624. FINANCE AND INVESTMENT DIVISION.

    ``(a) In General.--There shall be within the Bank a finance and 
investment division, which shall be responsible for--
            ``(1) the Bank's greenhouse gas emissions mitigation 
        efforts by directly financing qualifying projects or doing so 
        indirectly by providing capital to State and local green banks;
            ``(2) originating, evaluating, underwriting, and closing 
        the Bank's financing and investment transactions in qualified 
        projects;
            ``(3) partnering with private capital providers and capital 
        markets to attract coinvestment from private banks, investors, 
        and others in order to drive new investment into 
        underpenetrated markets, to increase the efficiency of private 
        capital markets with respect to investing in greenhouse gas 
        reduction projects, and to increase total investment caused by 
        the Bank;
            ``(4) managing the Bank's portfolio of assets to ensure 
        performance and monitor risk;
            ``(5) ensuring appropriate debt and risk mitigation 
        products are offered; and
            ``(6) overseeing prudent, noncontrolling equity 
        investments.
    ``(b) Products and Investment Types.--The finance and investment 
division of the Bank may provide capital to qualified projects in the 
form of--
            ``(1) senior, mezzanine, and subordinated debt;
            ``(2) credit enhancements including loan loss reserves and 
        loan guarantees;
            ``(3) aggregation and warehousing;
            ``(4) equity capital; and
            ``(5) any other financial product approved by the Board.
    ``(c) State and Local Green Bank Capitalization.--The finance and 
investment division of the Bank shall make capital available to State 
and local green banks to enable such banks to finance qualifying 
projects in their markets that are better served by a locally based 
entity, rather than through direct investment by the Bank.
    ``(d) Investment Committee.--The debt, risk mitigation, and equity 
investments made by the Bank shall be--
            ``(1) approved by the investment committee of the Board; 
        and
            ``(2) consistent with an investment policy that has been 
        established by the investment committee of the Board in 
        consultation with the risk management committee of the Board.

``SEC. 1625. START-UP DIVISION.

    ``There shall be within the Bank a Start-up Division, which shall 
be responsible for providing technical assistance and start-up funding 
to States and other political subdivisions that do not have green banks 
to establish green banks in those States and political subdivisions, 
including by working with relevant stakeholders in those States and 
political subdivisions.

``SEC. 1626. ZERO-EMISSIONS FLEET AND RELATED INFRASTRUCTURE FINANCING 
              PROGRAM.

    ``Not later than 1 year after the date of establishment of the 
Bank, the Bank shall explore the establishment of a program to provide 
low- and zero-interest loans, up to 30 years in length, to any school, 
metropolitan planning organization, or nonprofit organization seeking 
financing for the acquisition of zero-emissions vehicle fleets or 
associated infrastructure to support zero-emissions vehicle fleets.

``SEC. 1627. PROJECT PRIORITIZATION AND REQUIREMENTS.

    ``(a) Emissions Reduction Mandate.--In investing in projects that 
mitigate greenhouse gas emissions, the Bank shall maximize the 
reduction of emissions in the United States for every dollar deployed 
by the Bank.
    ``(b) Environmental Justice Prioritization.--
            ``(1) In general.--In order to address environmental 
        justice needs, the Bank shall, as applicable, prioritize the 
        provision of program benefits and investment activity that are 
        expected to directly or indirectly result in the deployment of 
        projects to serve, as a matter of official policy, climate-
        impacted communities.
            ``(2) Minimum percentage.--The Bank shall ensure that over 
        the 30-year period of its charter 20 percent of its investment 
        activity is directed to serve climate-impacted communities.
    ``(c) Consumer Protection.--
            ``(1) Prioritization.--Consistent with mandate under 
        section 1623 to maximize the reduction of emissions in the 
        United States for every dollar deployed by the Bank, the Bank 
        shall prioritize qualified projects according to benefits 
        conferred on consumers and affected communities.
            ``(2) Consumer credit protection.--The Bank shall ensure 
        that any residential energy efficiency or distributed clean 
        energy project in which the Bank invests directly or indirectly 
        complies with the requirements of the Consumer Credit 
        Protection Act (15 U.S.C. 1601 et seq.), including, in the case 
        of a financial product that is a residential mortgage loan, any 
        requirements of title I of that Act relating to residential 
        mortgage loans (including any regulations promulgated by the 
        Bureau of Consumer Financial Protection under section 
        129C(b)(3)(C) of that Act (15 U.S.C. 1639c(b)(3)(C))).
    ``(d) Labor.--
            ``(1) In general.--The Bank shall ensure that laborers and 
        mechanics employed by contractors and subcontractors in 
        construction work financed directly by the Bank will be paid 
        wages not less than those prevailing on similar construction in 
        the locality, as determined by the Secretary of Labor under 
        sections 3141 through 3144, 3146, and 3147 of title 40, United 
        States Code.
            ``(2) Project labor agreement.--The Bank shall ensure that 
        projects financed directly by the Bank with total capital costs 
        of $100,000,000 or greater utilize a project labor agreement.

``SEC. 1628. BOARD OF DIRECTORS.

    ``(a) In General.--The Bank shall operate under the direction of a 
Board of Directors, which shall be composed of 7 members.
    ``(b) Initial Composition and Terms.--
            ``(1) Selection.--The initial members of the Board shall be 
        selected as follows:
                    ``(A) Appointed members.--Three members shall be 
                appointed by the President, with the advice and consent 
                of the Senate, of whom no more than two shall belong to 
                the same political party.
                    ``(B) Elected members.--Four members shall be 
                elected unanimously by the 3 members appointed and 
                confirmed pursuant to subparagraph (A).
            ``(2) Terms.--The terms of the initial members of the Board 
        shall be as follows:
                    ``(A) The 3 members appointed and confirmed under 
                paragraph (1)(A) shall have initial 5-year terms.
                    ``(B) Of the 4 members elected under paragraph 
                (1)(B), 2 shall have initial 3-year terms, and 2 shall 
                have initial 4-year terms.
    ``(c) Subsequent Composition and Terms.--
            ``(1) Selection.--Except for the selection of the initial 
        members of the Board for their initial terms under subsection 
        (b), the members of the Board shall be elected by the members 
        of the Board.
            ``(2) Disqualification.--A member of the Board shall be 
        disqualified from voting for any position on the Board for 
        which such member is a candidate.
            ``(3) Terms.--All members elected pursuant to paragraph (1) 
        shall have a term of 5 years.
    ``(d) Qualifications.--The members of the Board shall collectively 
have expertise in--
            ``(1) the fields of clean energy, electric utilities, 
        industrial decarbonization, clean transportation, resiliency, 
        and sustainable agriculture and forestry practices;
            ``(2) climate change science;
            ``(3) finance and investments; and
            ``(4) environmental justice and matters related to the 
        energy and environmental needs of climate-impacted communities.
    ``(e) Restriction on Membership.--No officer or employee of the 
Federal or any other level of government may be appointed or elected as 
a member of the Board.
    ``(f) Quorum.--Five members of the Board shall constitute a quorum.
    ``(g) Bylaws.--
            ``(1) In general.--The Board shall adopt, and may amend, 
        such bylaws as are necessary for the proper management and 
        functioning of the Bank.
            ``(2) Officers.--In the bylaws described in paragraph (1), 
        the Board shall--
                    ``(A) designate the officers of the Bank; and
                    ``(B) prescribe the duties of those officers.
    ``(h) Vacancies.--Any vacancy on the Board shall be filled through 
election by the Board.
    ``(i) Interim Appointments.--A member elected to fill a vacancy 
occurring before the expiration of the term for which the predecessor 
of that member was appointed or elected shall serve for the remainder 
of the term for which the predecessor of that member was appointed or 
elected.
    ``(j) Reappointment.--A member of the Board may be elected for not 
more than 1 additional term of service as a member of the Board.
    ``(k) Continuation of Service.--A member of the Board whose term 
has expired may continue to serve on the Board until the date on which 
a successor member is elected.
    ``(l) Chief Executive Officer.--The Board shall appoint a chief 
executive officer who shall be responsible for--
            ``(1) hiring employees of the Bank;
            ``(2) establishing the 2 divisions of the Bank described in 
        sections 1624 and 1625; and
            ``(3) performing any other tasks necessary for the day-to-
        day operations of the Bank.
    ``(m) Advisory Committee.--
            ``(1) Establishment.--The Bank shall establish an advisory 
        committee (in this subsection referred to as the `advisory 
        committee'), which shall be composed of not more than 13 
        members appointed by the Board on the recommendation of the 
        president of the Bank.
            ``(2) Members.--Members of the advisory committee shall be 
        broadly representative of interests concerned with the 
        environment, production, commerce, finance, agriculture, labor, 
        services, and State Government. Of such members--
                    ``(A) not fewer than 3 shall be representatives of 
                the small business community;
                    ``(B) not fewer than 2 shall be representatives of 
                the labor community, except that no 2 members may be 
                from the same labor union;
                    ``(C) not fewer than 2 shall be representatives of 
                the environmental nongovernmental organization 
                community, except that no 2 members may be from the 
                same environmental organization;
                    ``(D) not fewer than 2 shall be representatives of 
                the environmental justice nongovernmental organization 
                community, except that no 2 members may be from the 
                same environmental organization; and
                    ``(E) not fewer than 2 shall be representatives of 
                the consumer protection and fair lending community, 
                except that no 2 members may be from the same consumer 
                protection or fair lending organization.
            ``(3) Meetings.--The advisory committee shall meet not less 
        frequently than once each quarter.
            ``(4) Duties.--The advisory committee shall--
                    ``(A) advise the Bank on the programs undertaken by 
                the Bank; and
                    ``(B) submit to the Congress an annual report with 
                comments from the advisory committee on the extent to 
                which the Bank is meeting the mandate described in 
                section 1623, including any suggestions for 
                improvement.
    ``(n) Chief Risk Officer.--
            ``(1) Appointment.--Subject to the approval of the Board, 
        the chief executive officer shall appoint a chief risk officer 
        from among individuals with experience at a senior level in 
        financial risk management, who--
                    ``(A) shall report directly to the Board; and
                    ``(B) shall be removable only by a majority vote of 
                the Board.
            ``(2) Duties.--The chief risk officer, in coordination with 
        the risk management and audit committees established under 
        section 1631, shall develop, implement, and manage a 
        comprehensive process for identifying, assessing, monitoring, 
        and limiting risks to the Bank, including the overall portfolio 
        diversification of the Bank.

``SEC. 1629. ADMINISTRATION.

    ``(a) Capitalization.--
            ``(1) In general.--To the extent and in the amounts 
        provided in advance in appropriations Acts, the Secretary of 
        Energy shall transfer to the Bank--
                    ``(A) $10,000,000,000 on the date on which the Bank 
                is established under section 1622; and
                    ``(B) $5,000,000,000 on October 1 of each of the 5 
                fiscal years following that date.
            ``(2) Authorization of appropriations.--For purposes of the 
        transfers under paragraph (1), there are authorized to be 
        appropriated--
                    ``(A) $10,000,000,000 for the fiscal year in which 
                the Bank is established under section 1622; and
                    ``(B) $5,000,000,000 for each of the 5 succeeding 
                fiscal years.
    ``(b) Charter.--The Bank shall establish a charter, the term of 
which shall be 30 years.
    ``(c) Operational Funds.--To sustain operations, the Bank shall 
manage revenue from financing fees, interest, repaid loans, and other 
types of funding.
    ``(d) Report.--The Bank shall submit on a quarterly basis to the 
relevant committees of Congress a report that describes the financial 
activities, emissions reductions, and private capital mobilization 
metrics of the Bank for the previous quarter.
    ``(e) Restriction.--The Bank shall not accept deposits.
    ``(f) Committees.--The Board shall establish committees and 
subcommittees, including--
            ``(1) an investment committee; and
            ``(2) in accordance with section 1630--
                    ``(A) a risk management committee; and
                    ``(B) an audit committee.
    ``(g) Private Contributions.--The Bank may accept and use 
philanthropic funds.

``SEC. 1630. ESTABLISHMENT OF RISK MANAGEMENT COMMITTEE AND AUDIT 
              COMMITTEE.

    ``(a) In General.--To assist the Board in fulfilling the duties and 
responsibilities of the Board under this subtitle, the Board shall 
establish a risk management committee and an audit committee.
    ``(b) Duties and Responsibilities of Risk Management Committee.--
Subject to the direction of the Board, the risk management committee 
established under subsection (a) shall establish policies for and have 
oversight responsibility for--
            ``(1) formulating the risk management policies of the 
        operations of the Bank;
            ``(2) reviewing and providing guidance on operation of the 
        global risk management framework of the Bank;
            ``(3) developing policies for--
                    ``(A) investment;
                    ``(B) enterprise risk management;
                    ``(C) monitoring; and
                    ``(D) management of strategic, reputational, 
                regulatory, operational, developmental, environmental, 
                social, and financial risks; and
            ``(4) developing the risk profile of the Bank, including--
                    ``(A) a risk management and compliance framework; 
                and
                    ``(B) a governance structure to support that 
                framework.
    ``(c) Duties and Responsibilities of Audit Committee.--Subject to 
the direction of the Board, the audit committee established under 
subsection (a) shall have oversight responsibility for--
            ``(1) the integrity of--
                    ``(A) the financial reporting of the Bank; and
                    ``(B) the systems of internal controls regarding 
                finance and accounting;
            ``(2) the integrity of the financial statements of the 
        Bank;
            ``(3) the performance of the internal audit function of the 
        Bank; and
            ``(4) compliance with the legal and regulatory requirements 
        related to the finances of the Bank.

``SEC. 1631. OVERSIGHT.

    ``(a) External Oversight.--The inspector general of the Department 
of Energy shall have oversight responsibilities over the Bank.
    ``(b) Reports and Audit.--
            ``(1) Annual report.--The Bank shall publish an annual 
        report which shall be transmitted by the Bank to the President 
        and the Congress.
            ``(2) Annual audit of accounts.--The accounts of the Bank 
        shall be audited annually. Such audits shall be conducted in 
        accordance with generally accepted auditing standards by 
        independent certified public accountants who are certified by a 
        regulatory authority of the jurisdiction in which the audit is 
        undertaken.
            ``(3) Additional audits.--In addition to the annual audits 
        under paragraph (2), the financial transactions of the Bank for 
        any fiscal year during which Federal funds are available to 
        finance any portion of its operations may be audited by the 
        Government Accountability Office in accordance with such rules 
        and regulations as may be prescribed by the Comptroller General 
        of the United States.

``SEC. 1632. MAXIMUM CONTINGENT LIABILITY.

    ``The maximum contingent liability of the Bank that may be 
outstanding at any time shall be not more than $70,000,000,000 in the 
aggregate.''.
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