I 116th CONGRESS 1st Session H. R. 5416 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.

1. Short title This Act may be cited as the National Climate Bank Act . 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. 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: C National Climate Bank 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. .