1.
This Act may be cited as the
Climate Change Technology Deployment
and Infrastructure Credit Act of 2005
.
2.
Greenhouse gas intensity reducing technology
strategies
Title XVI of the Energy Policy
Act of 1992 (42 U.S.C. 13381 et seq.) is amended by adding at the end the
following:
1610.
Greenhouse gas intensity reducing strategies
(a)
In this section:
(1)
The term carbon
sequestration means the capture of carbon dioxide through terrestrial,
geological, biological, or other means, which prevents the release of carbon
dioxide into the atmosphere.
(2)
The term
Committee
means the Interagency Coordinating Committee on
Climate Change Technology established under subsection (c)(1).
(3)
The term greenhouse
gas
means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride.
(4)
The term greenhouse
gas intensity
means the ratio of greenhouse gas emissions to economic
output.
(5)
The term National
Laboratory
means a laboratory owned by the Department of Energy,
including the following:
(A)
Argonne National
Laboratory.
(B)
Idaho National
Laboratory.
(C)
Brookhaven National
Laboratory.
(D)
Oak Ridge National
Laboratory.
(E)
Los Alamos National
Laboratory.
(F)
Sandia National
Laboratory.
(G)
Lawrence Livermore National
Laboratory.
(H)
National Energy Technology
Laboratory.
(I)
National Renewable Energy
Laboratory.
(J)
Pacific Northwest National
Laboratory.
(6)
The term Working
Group
means the Climate Change Technology Working Group established
under subsection (g)(1).
(b)
Office of science and technology policy strategy
(1)
Based on the
recommendations of the report submitted under subsection (f)(2), the Director
of the Office of Science and Technology Policy shall develop a national
strategy to promote greenhouse gas intensity reducing technologies and
practices developed through research and development programs conducted by
National Laboratories, other Federal research facilities, universities, and the
private sector.
(2)
The Director of the Office
of Science and Technology Policy shall annually submit to the President and
make available to the public a report on the activities carried out in
furtherance of the strategy developed under paragraph (1).
(c)
Interagency coordinating committee on climate change
technology
(1)
Not later than 180 days
after the date on which the first report is submitted under subsection (b)(2),
the Secretary shall establish an Interagency Coordinating Committee on Climate
Change Technology to coordinate Federal climate change activities and programs
carried out in furtherance of the strategy developed under subsection
(b)(1).
(2)
The Committee shall be
composed of at least 6 members, including—
(A)
the Secretary;
(B)
the Secretary of
Commerce;
(C)
the Chairman of the Council
on Environmental Quality;
(D)
the Secretary of
Agriculture;
(E)
the Administrator of the
Environmental Protection Agency; and
(F)
the Secretary of
Transportation.
(d)
Climate Change Science Program and Climate Change Technology
Program
(1)
Climate Change Science Program
Not later than 180 days
after the date on which the first report is submitted under subsection (b)(2),
the Secretary of Commerce, in cooperation with the Committee, shall establish
as a permanent program within the Department of Commerce the Climate Change
Science Program to assist the Committee in the interagency coordination of
climate change science research and related activities, including—
(A)
the assessments of the
state of knowledge on climate change; and
(B)
carrying out supporting
studies, planning, and analyses of the science of climate change.
(2)
Climate Change Technology Program
Not later than 180 days
after the date on which the first report is submitted under subsection (b)(2),
the Secretary, in cooperation with the Committee, shall establish as a
permanent program within the Department of Energy, the Climate Change
Technology Program to assist the Committee in the interagency coordination of
climate change technology research, development, demonstration, and deployment
to reduce greenhouse gas intensity.
(e)
(1)
The Secretary shall conduct
an inventory and evaluation of greenhouse gas intensity reducing technologies
that have been developed, or are under development, by the National
Laboratories to determine which technologies are suitable for commercialization
and deployment.
(2)
Not later than 180 days
after the completion of the inventory under paragraph (1), the Secretary shall
submit to the Secretary of Commerce and Congress a report that includes the
results of the completed inventory and any recommendations of the
Secretary.
(3)
The Secretary, in
consultation with the Secretary of Commerce, shall use the results of the
inventory as guidance in the commercialization of greenhouse gas intensity
reducing technologies.
(f)
Greenhouse gas intensity reducing technology study
(1)
As soon as practicable
after the date of enactment of this section, the Committee shall conduct and
submit to the Secretary a study on—
(A)
the commercialization and
diffusion of new and existing technologies to reduce greenhouse gas intensity;
and
(B)
ways to increase the
development and deployment of cost-effective technologies and practices.
(2)
Not later than 180 days
after the completion of the study under paragraph (1), the Secretary shall
submit to Congress and the Director of the Office of Science and Technology
Policy a report that describes—
(A)
the results of the study;
and
(B)
any recommendations of the
Committee to—
(i)
increase commercialization
of the technologies and practices described in paragraph (1); and
(ii)
promote the long-term
commercialization and deployment of those technologies and practices.
(g)
Climate change technology working group
(1)
The Secretary, in
consultation with the Committee, shall establish a Climate Change Technology
Working Group to identify major statutory, regulatory, and economic barriers to
the commercialization of greenhouse gas intensity reducing technologies and
practices.
(2)
The Working Group shall be
composed of the following members, to be appointed by the Secretary, in
consultation with the Committee:
(A)
1 representative from each
National Laboratory.
(B)
3 members shall be
representatives of energy-producing industries.
(C)
3 members shall represent
major energy-consuming industries.
(D)
3 members shall represent
groups that represent end-use energy and other consumers.
(E)
3 members shall be
employees of the Federal Government who are experts in energy technology,
intellectual property, tax, and regulation.
(F)
3 members shall be
representatives of universities with expertise in energy technology development
that are recommended by the National Academy of Engineering.
(3)
Not later than 1 year after
the date of enactment of this section and annually thereafter, the Working
Group shall submit to the Committee a report that describes—
(A)
the findings of the Working
Group; and
(B)
any recommendations of the
Working Group for the removal of barriers to commercialization and increasing
the use of greenhouse gas intensity reducing technologies.
(h)
Greenhouse gas intensity reducing technology
deployment
(1)
Based on the strategy
developed under subsection (b)(1), the technology inventory conducted under
subsection (e)(1), and the greenhouse gas intensity reducing technology study
report submitted under subsection (e)(2), the Committee shall develop a program
for implementation by the Climate Credit Board established under section
1611(b)(2)(A) that would provide for the removal of domestic barriers to the
deployment of greenhouse gas intensity reducing technologies.
(2)
In developing the program
under paragraph (1), the Committee shall consider—
(A)
the cost-effectiveness of
the technology;
(B)
fiscal and regulatory
barriers;
(C)
statutory barriers;
and
(D)
intellectual property
issues.
(3)
Not later than 1 year after
the date of enactment of this section, the Committee shall submit to the
President and Congress a report that—
(A)
identifies the barriers to,
and the commercial risks associated with, the deployment of greenhouse gas
intensity reducing technologies;
(B)
includes a comprehensive
plan for carrying out eligible projects with Federal financial assistance under
section 1611; and
(C)
describes the program
developed under paragraph (1).
(i)
Procedures for calculating, monitoring, and analyzing
greenhouse gas intensity
(1)
Using the guidelines issued
under section 1605(b), the Committee, in collaboration with the Administrator
of the Energy Information Administration and the National Institute of
Standards and Technology, shall develop and propose standards and best
practices for calculating, monitoring, and analyzing greenhouse gas
intensity.
(2)
The standards and best
practices shall address measurement of greenhouse gas intensity by industry
sector.
(3)
To ensure that high quality
information is produced, the standards and best practices developed under
paragraph (1) shall conform to the guidelines established under section 515 of
the Treasury and General Government Appropriations Act, 2001 (commonly known as
the Data Quality Act
) (44 U.S.C. 3516 note; 114 Stat.
2763A–1543), as enacted into law by section 1(a)(3) of Public Law
106–554.
(j)
(1)
The Secretary shall conduct
and participate in demonstration projects approved by the Committee, including
demonstration projects relating to—
(A)
coal gasification and coal
liquefaction;
(B)
carbon
sequestration;
(C)
cogeneration technology
initiatives;
(D)
advanced nuclear power
projects;
(E)
lower emission
transportation;
(F)
renewable energy;
and
(G)
transmission
upgrades.
(2)
The Committee shall approve
a demonstration project under paragraph (1) if the proposed demonstration
project would—
(A)
increase the reduction of
the greenhouse gas intensity to levels below that which would be achieved by
technologies being used in the United States as of the date of enactment of
this section;
(B)
maximize the potential
return on Federal investment;
(C)
demonstrate distinct roles
in public-private partnerships;
(D)
produce a large-scale
reduction of greenhouse gas intensity if commercialization occurred; and
(E)
support a diversified
portfolio to mitigate the uncertainty associated with a single
technology.
(k)
Cooperative research and development agreements
In carrying out greenhouse
gas intensity reduction research and technology deployment, the Secretary may
enter into cooperative research and development agreements under section 12 of
the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710a).
(l)
Authorization of appropriations
There are authorized to be
appropriated such sums as are necessary to carry out this section.
(m)
The authority provided by
this section terminates effective December 31, 2010.
.
3.
Climate infrastructure credit
Title XVI of the Energy
Policy Act of 1992 (42 (U.S.C. 13381 et seq.) (as amended by section 2) is
amended by adding at the end the following:
1611.
Climate infrastructure credit
(a)
In this section:
(1)
Advanced climate technology or system
The term advanced
climate technology or system means a climate technology or system that
is not in general usage as of the date of enactment of this section.
(2)
The term
Board
means the Climate Credit Board established under
subsection (b)(2)(A).
(3)
The term direct
loan
has the meaning given the term in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a).
(4)
The term eligible
project means a demonstration project that is approved under section
1610(j)(1).
(5)
The term eligible
project cost means any amount incurred for an eligible project that is
paid by, or on behalf of, an obligor, including the costs of—
(A)
pre-construction
activities, including—
(i)
detailed project
engineering and design work;
(ii)
environmental reviews and
permitting; and
(iii)
other pre-construction
activities, as determined by the Secretary;
(B)
construction activities,
including—
(i)
the acquisition of capital
equipment;
(ii)
construction management;
and
(iii)
construction contingencies;
and
(C)
acquiring land (including
any improvements to the land) relating to the eligible project; and
(D)
financing the eligible
project, including—
(i)
providing capitalized
interest necessary to meet market requirements;
(ii)
maintaining reasonably
required reserve funds;
(iii)
capital issuance expenses;
and
(iv)
other carrying costs during
construction.
(6)
Federal financial assistance
The term Federal
financial assistance means any credit-based financial assistance,
including a direct loan, loan guarantee, a line of credit (which serves as
standby default coverage or standby interest coverage), production incentive
payment under subsection (g)(1)(B), or other credit-based financial assistance
mechanism for an eligible project that is—
(A)
authorized to be made
available by the Secretary for an eligible project under this section;
and
(B)
provided in accordance with
the Federal Credit Reform Act of
1990 (2
U.S.C. 661 et seq.).
(7)
The term
investment-grade rating means a rating category of BBB minus,
Baa3, or higher assigned by a rating agency for eligible project obligations
offered into the capital markets.
(8)
The term
lender means any non-Federal qualified institutional buyer (as
defined in section 230.144A(a) of title 17, Code of Federal Regulations (or any
successor regulation), known as Rule 144A(a) of the Securities and Exchange
Commission and issued under the Securities Act
of 1933 (15 U.S.C. 77a et seq.)),
including—
(A)
a qualified retirement plan
(as defined in section 4974(c) of the Internal Revenue Code of 1986) that is a
qualified institutional buyer; and
(B)
a governmental plan (as
defined in section 414(d) of the Internal Revenue Code of 1986) that is a
qualified institutional buyer.
(9)
The term loan
guarantee means any guarantee or other pledge by the Secretary to pay
all or part of the principal of and interest on a loan or other debt obligation
that is issued by an obligor and funded by a lender.
(10)
The term
obligor means a person or entity (including a corporation,
partnership, joint venture, trust, or governmental entity, agency, or
instrumentality) that is primarily liable for payment of the principal of, or
interest on, a Federal credit instrument.
(11)
The term project
obligation means any note, bond, debenture, or other debt obligation
issued by an obligor in connection with the financing of an eligible project,
other than a Federal credit instrument.
(12)
The term rating
agency means a bond rating agency identified by the Securities and
Exchange Commission as a Nationally Recognized Statistical Rating
Organization.
(13)
The term regulatory
failure means a situation in which, because of a breakdown in a
regulatory process or an indefinite delay caused by a judicial challenge to the
regulatory consideration of a specific eligible project, the Federal or State
regulatory or licensing process governing the siting, construction, or
commissioning of an eligible project does not produce a definitive
determination that the eligible project may go forward or stop within a
predetermined and prescribed time period, as determined by the
Secretary.
(14)
The term secured
loan means a loan or other secured debt obligation issued by an obligor
and funded by the Secretary in connection with the financing of an eligible
project.
(15)
The term standby
default coverage means a pledge by the Secretary to pay all or part of
the debt obligation issued by an obligor and funded by a lender, plus all or
part of obligor equity, if an eligible project fails to receive an operating
license in a period of time established by the Secretary because of a
regulatory failure or other specific issue identified by the Secretary.
(16)
Standby interest coverage
The term standby
interest coverage means a pledge by the Secretary to provide to an
obligor, at a future date and on the occurrence of 1 or more events, a direct
loan, the proceeds of which shall be used by the obligor to maintain the
current status of the obligor on interest payments due on 1 or more loans or
other project obligations issued by an obligor and funded by a lender for an
eligible project.
(17)
The term subsidy
amount means the amount of budget authority sufficient to cover the
estimated long-term cost to the Federal Government of a Federal credit
instrument issued by the Secretary to an eligible project, calculated on a net
present value basis, excluding administrative costs and any incidental effects
on governmental receipts or outlays in accordance with the
Federal Credit Reform Act of 1990
(2 U.S.C.
661 et seq.).
(18)
The term substantial
completion means that an eligible project has been determined by the
Board to be in, or capable of, commercial operation.
(b)
(1)
The Secretary shall make
available to eligible project developers and eligible project owners, in
accordance with this section, such financial assistance as is necessary to
supplement private sector financing for eligible projects.
(2)
(A)
Not later than 120 days
after the date of enactment of this section, the Secretary shall establish
within the Department of Energy a Climate Credit Board composed of—
(i)
the Under Secretary of
Energy, who shall serve as Chairperson;
(ii)
the Chief Financial Officer
of the Department of Energy;
(iii)
the Assistant Secretary of
Energy for Policy and International Affairs;
(iv)
the Assistant Secretary of
Energy for Energy Efficiency and Renewable Energy; and
(v)
such other individuals as
the Secretary determines to have the experience and expertise (including
expertise in corporate and project finance and the energy sector) necessary to
carry out the duties of the Board.
(B)
The Board shall—
(i)
implement the program
developed under section 1610(h)(1) in accordance with paragraph (3);
(ii)
issue regulations and
criteria in accordance with paragraph (4);
(iii)
conduct negotiations with
individuals and entities interested in obtaining assistance under this
section;
(iv)
recommend to the Secretary
potential recipients and amounts of grants of assistance under this section;
and
(v)
carry out such other
projects and activities as the Interagency Coordinating Committee on Climate
Change Technology may recommend.
(3)
Greenhouse gas intensity reducing technology deployment
program
Not later than 1 year after
the date of enactment of this section, the Board shall implement the greenhouse
gas intensity reducing technology deployment program developed under section
1610(h)(1).
(4)
(A)
Not later than 1 year after
the date of enactment of this section, the Board shall issue and publish in the
Federal Register such regulations and criteria as are necessary to implement
this section.
(B)
The regulations and
criteria shall provide for, at a minimum—
(i)
a competitive process and
the general terms and conditions for the provision of assistance under this
section;
(ii)
the procedures by which
eligible project owners and eligible project developers may request financial
assistance under this section; and
(iii)
the collection of any other
information necessary for the Secretary to carry out this section, including a
process for negotiating the terms and conditions of assistance provided under
this section.
(C)
The determination of
eligibility of, and criteria for selecting, eligible projects to receive
assistance under this section shall be carried out in accordance with
subsection (c).
(D)
Conditions for provision of assistance
The Board shall not provide
assistance under this section unless the Board determines that the terms,
conditions, maturity, security, schedule, and amounts of repayments of the
assistance are reasonable and meet such standards as the Board determines are
appropriate to protect the financial interests of the United States.
(5)
Reports to the President and Congress
Not later than 4 years
after the date of enactment of this section, and every 2 years thereafter, the
Board shall submit to the Secretary, for transmittal to the President and
Congress, a report that describes—
(A)
the progress in carrying
out this section;
(B)
the financial performance
of the eligible projects that are receiving, or have received, assistance under
this section as of the date of the report; and
(C)
the progress and value to
the United States of the program under this section, including a recommendation
as to whether the objectives of this section are best served by—
(i)
continuing the program
under the authority of the Secretary;
(ii)
establishing a Federal
Government corporation or Federal Government-sponsored enterprise to administer
the program; or
(iii)
phasing out the program and
relying on the capital markets to fund the kinds of energy infrastructure
investments assisted by this section without Federal participation.
(6)
The Board shall protect the
confidentiality of any information provided by an applicant for assistance
under this section that the applicant certifies to be commercially sensitive or
that is protected intellectual property.
(c)
General requirements regarding assistance, determination of
eligibility, and project selection
(1)
The Board shall not provide
assistance to an eligible project under this section unless the Board first
determines that the amount of assistance to be provided for the eligible
project is not greater than the amount of assistance required to achieve the
purposes of this section with respect to the eligible project.
(2)
To be eligible to receive
assistance under this section, an eligible project shall, as determined by the
Board—
(A)
be supported by an
application that contains all information required to be included by, and is
submitted to and approved by the Board in accordance with, the regulations and
criteria issued by the Board under subsection (b)(4);
(B)
be nationally or regionally
significant by—
(i)
reducing greenhouse gas
intensity;
(ii)
generating economic
benefits;
(iii)
contributing to energy
security;
(iv)
contributing to energy and
technology diversity in the energy economy of the United States;
(v)
contributing to energy and
electricity price stability; or
(vi)
otherwise enhancing
national or regional energy efficiency, reliability, and robustness of
performance;
(C)
contain an advanced climate
technology or system that could—
(i)
significantly improve the
efficiency, security, reliability, and environmental performance of the energy
economy of the United States; and
(ii)
reduce greenhouse gas
emissions;
(D)
have revenue sources
dedicated to repayment of credit support-based project financing, such as
revenue—
(i)
from the sale of
sequestered carbon;
(ii)
from the sale of energy,
electricity, or other products from eligible projects that employ advanced
climate technologies and systems;
(iii)
from the sale of
transportation of commerce;
(iv)
from the sale of
electricity or generating capacity, in the case of electricity
infrastructure;
(v)
from the sale or
transmission of energy;
(vi)
associated with energy
efficiency gains, in the case of other energy projects; or
(vii)
from other dedicated
revenue sources;
(E)
include a project proposal
and agreement for project financing repayment that demonstrates to the
satisfaction of the Board that the dedicated revenue sources described in
subparagraph (D) will be adequate to repay project financing provided under
this section;
(F)
reduce greenhouse gas
intensity on a national or regional basis; and
(G)
if the eligible project
involves new transmission capacity, link to low-emission projects.
(3)
Except as otherwise
provided in this section—
(A)
the total cost of an
eligible project provided Federal financial assistance under this section shall
be at least $40,000,0000;
(B)
the Federal share of an
eligible project provided Federal financial assistance under this Act shall be
not more than 20 percent of the total cost of carrying out the eligible
project; and
(C)
not more than $200,000,000
in Federal financial assistance shall be provided to any individual eligible
project.
(4)
Selection among eligible projects
(A)
Establishment of selection criteria
The Board shall establish
criteria for selecting which eligible projects will receive assistance under
this section.
(B)
The selection criteria
shall include a determination by the Board of the extent to which—
(i)
the eligible project
reduces greenhouse gas intensity beyond reductions achieved by technology
available as of October 15, 1992;
(ii)
financing for the eligible
project has appropriate security features, such as a rate covenant, to ensure
repayment;
(iii)
assistance under this
section for the eligible project would foster innovative public-private
partnerships and attract private debt or equity investment;
(iv)
assistance under this
section for an eligible project would enable the eligible project to proceed at
an earlier date than would otherwise be practicable;
(v)
the eligible project uses
new technologies that enhance the efficiency, reduce the environmental impact,
improve the reliability, or improve the safety, of the eligible project;
(vi)
the eligible project helps
to maintain or protect the environment, especially with respect to having a low
level of emissions to the atmosphere;
(vii)
assistance for the eligible
project provided under this section could reduce the contribution of other
Federal grant or funding assistance to the eligible project; and
(viii)
the eligible project is
nationally or regionally significant in terms of generating economic benefits,
supporting international commerce, or otherwise enhancing national energy
efficiency, security, reliability, robustness, and environmental
performance.
(C)
An application for
assistance for an eligible project under this section shall include such
information as the Secretary determines to be necessary concerning—
(i)
the amount of budget
authority required to fund the Federal credit instrument requested for the
eligible project;
(ii)
the estimated construction
costs of the proposed eligible project;
(iii)
estimates of construction
and operating costs of the eligible project;
(iv)
projected revenues from the
eligible project; and
(v)
any other financial aspects
of the eligible project, including assurances, that the Board determines to be
appropriate.
(D)
Preliminary rating opinion letter
The Board shall require
each applicant seeking assistance for an eligible project under this section to
provide a preliminary rating opinion letter from at least 1 credit rating
agency indicating that the senior obligations of the eligible project have the
potential to achieve an investment-grade rating.
(E)
Before entering into any
agreement to provide assistance for an eligible project under this section, the
Board, in consultation with the Secretary, the Director of the Office of
Management and Budget, and each credit rating agency providing a preliminary
rating opinion letter under subparagraph (D), shall determine and maintain an
appropriate capital reserve subsidy amount for each line of credit established
for the eligible project, taking into account the information contained in the
preliminary rating opinion letter.
(F)
Investment-grade rating requirement
(i)
The funding of any
assistance under this section shall be contingent on the senior obligations of
the eligible project receiving an investment-grade rating from at least 1
credit rating agency.
(ii)
In determining whether an
investment-grade rating is appropriate under clause (i), the credit rating
agency shall take into account the availability of Federal financial assistance
under this section.
(5)
Maximum available climate credit support
Notwithstanding any
assistance limitation under any other provision of this section, the Secretary
shall not provide energy credit support to any eligible project in the form of
a secured loan or loan guarantee under subsection (f), production incentive
payments under subsection (g), or other credit-based financial assistance under
subsection (h), the combined total of which exceeds 60 percent of eligible
project costs, excluding the value of standby default coverage under subsection
(d) and standby interest coverage under subsection (e), as determined by the
Secretary.
(d)
(1)
Agreements; use of proceeds
(A)
(i)
Subject to subparagraph
(B), the Board, in consultation with the Secretary, may enter into agreements
to provide standby default coverage for advanced climate technologies or
systems of an eligible project.
(ii)
Coverage under clause (i)
may be provided to 1 or more obligors and debt holders to be triggered at
future dates on the occurrence of certain events for any eligible project
selected under subsection (c).
(B)
The proceeds of standby
default coverage made available under this subsection shall be available to
reimburse all or part of the debt obligation for an eligible project issued by
an obligor and funded by a lender, plus all or part of obligor equity, in the
event that, because of a regulatory failure or other event specified by the
Secretary pursuant to this section, an eligible advanced climate technology or
system for an eligible project fails to receive an operating license in a
period of time specified by the Board in accordance with this
subsection.
(2)
(A)
Standby default coverage
under this subsection with respect to an eligible project shall be on such
terms and conditions and contain such covenants, representations, warranties,
and requirements (including requirements for audits) as the Board determines to
be appropriate.
(B)
The total amount of standby
default coverage provided for an eligible project shall not exceed 100 percent
of the reasonably anticipated eligible project costs, including debt and
equity.
(C)
Any exercise on the standby
default coverage shall be made only if a facility involved with the eligible
project fails, because of regulatory failure or other specific issues specified
by the Secretary, to receive an operating license by such deadline as the
Secretary shall establish.
(D)
The cost of standby default
coverage shall be assumed by the Secretary subject to the risk assessment
calculation required under subsection (c)(4)(E) and the availability of funds
for that purpose.
(E)
In carrying out this
section, the Secretary may—
(i)
establish fees at a level
sufficient to cover all or a portion of the administrative costs incurred by
the Federal Government in providing standby default coverage under this
subsection; and
(ii)
require that the fees be
paid upon application for a standby default coverage agreement under this
subsection.
(F)
In the event that
regulatory approval to operate a facility is suspended as a result of
regulatory failure or other circumstances specified by the Secretary, standby
default coverage shall be available beginning on the date of substantial
completion and ending not later than 5 years after the date on which operation
of the facility is scheduled to commence.
(G)
Rights of third-party creditors
(i)
Against Federal Government
A third-party creditor of
an obligor shall not have any right against the Federal Government with respect
to any amounts other than those specified in subparagraph (B).
(ii)
An obligor may assign all
or part of the standby default coverage for an eligible project to 1 or more
lenders or to a trustee on behalf of the lenders.
(H)
Result of exercise of standby default coverage
If standby default coverage
is exercised by the obligor of an eligible project—
(i)
the Federal Government
shall become the sole owner of the eligible project, with all rights and
appurtenances to the eligible project; and
(ii)
the Board shall dispose of
the assets of the eligible project on terms that are most favorable to the
Federal Government, which may include continuing to licensing and commercial
operation or resale of the eligible project, in whole or in part, if that is
the best course of action in the judgment of the Board.
(I)
Estimate of assets at time of termination
If standby default coverage
is exercised and an eligible project is terminated, the Board, in making a
determination of whether to dispose of the assets of the eligible project or
continue the eligible project to licensing and commercial operation, shall
obtain a fair and impartial estimate of the eligible project assets at the time
of termination.
(J)
Relationship to other credit instruments
An eligible project that
receives standby default coverage under this subsection may receive a secured
loan or loan guarantee under subsection (f), production incentive payments
under subsection (g), or assistance through a credit-based financial assistance
mechanism under subsection (h).
(K)
Other conditions and requirements
The Secretary may impose
such other conditions and requirements in connection with any insurance
provided under this subsection (including requirements for audits) as the
Secretary determines to be appropriate.
(e)
Standby interest coverage
(1)
(A)
Subject to subparagraph
(B), the Board may enter into agreements to make standby interest coverage
available to 1 or more obligors in the form of loans for advanced climate or
energy technologies or systems to be made by the Board at future dates on the
occurrence of certain events for any eligible project selected under subsection
(c)(4).
(B)
Subject to subsection
(c)(3), the proceeds of standby interest coverage made available under this
subsection shall be available to pay the debt service on project obligations
issued to finance eligible project costs of an eligible project if a delay in
commercial operations occurs due to a regulatory failure or other condition
determined by the Secretary.
(2)
(A)
Standby interest coverage
under this subsection with respect to an eligible project shall be made on such
terms and conditions (including a requirement for an audit) as the Secretary
determines appropriate.
(B)
(i)
The total amount of standby
interest coverage for an eligible project under this subsection shall not
exceed 25 percent of the reasonably anticipated eligible project costs of the
eligible project.
(ii)
The amount drawn in any 1
year for an eligible project under this subsection shall not exceed 20 percent
of the total amount of the standby interest coverage for the eligible
project.
(C)
The standby interest
coverage for an eligible project shall be available during the period—
(i)
beginning on a date
following substantial completion of the eligible project that regulatory
approval to operate a facility under the eligible project is suspended as a
result of regulatory failure or other condition determined by the Secretary;
and
(ii)
ending on a date that is
not later than 5 years after the eligible project is scheduled to commence
commercial operations.
(D)
Subject to subsection
(c)(4)(E), the cost of standby interest coverage for an eligible project under
this subsection shall be borne by the Secretary.
(E)
Any draw on the standby
interest coverage for an eligible project shall—
(i)
represent a loan;
(ii)
be made only if there is a
delay in commercial operations after the substantial completion of the eligible
project; and
(iii)
be subject to the overall
credit support limitations established under subsection (c)(5).
(F)
(i)
Subject to clause (ii), the
interest rate on a loan resulting from a draw on standby interest coverage
under this subsection shall be established by the Secretary.
(ii)
The interest rate on a loan
resulting from a draw on standby interest coverage under this subsection shall
not be less than the current average market yield on outstanding marketable
obligations of the United States with a maturity of 10 years, as of the date on
which the standby interest coverage is obligated.
(G)
The standby interest
coverage for an eligible project—
(i)
shall be payable, in whole
or in part, from dedicated revenue sources generated by the eligible
project;
(ii)
shall require security for
the project obligations; and
(iii)
may have a lien on revenues
described in clause (i), subject to any lien securing project
obligations.
(H)
Rights of third-party creditors
(i)
Against Federal Government
A third-party creditor of
the obligor shall not have any right against the Federal Government with
respect to any draw on standby interest coverage under this subsection.
(ii)
An obligor may assign the
standby interest coverage to 1 or more lenders or to a trustee on behalf of the
lenders.
(I)
A secured loan for an
eligible project made under this subsection shall be subordinate to senior
private debt issued by a lender for the eligible project.
(J)
A secured loan for an
eligible project under this subsection shall be nonrecourse to the obligor in
the event of bankruptcy, insolvency, or liquidation of the eligible
project.
(K)
The Board may impose fees
at a level sufficient to cover all or part of the costs to the Federal
Government of providing standby interest coverage for an eligible project under
this subsection.
(3)
(A)
The Secretary shall
establish a repayment schedule and terms and conditions for each loan for an
eligible project under this subsection based on the projected cash flow from
revenues for the eligible project.
(B)
Scheduled repayments of
principal or interest on a loan under this subsection shall—
(i)
commence not later than 5
years after the end of the period of availability specified in paragraph
(2)(C); and
(ii)
be completed, with
interest, not later than 10 years after the end of the period of
availability.
(C)
Sources of repayment funds
The sources of funds for
scheduled loan repayments under this subsection shall include—
(i)
the sale of electricity or
generating capacity;
(ii)
the sale or transmission of
energy;
(iii)
revenues associated with
energy efficiency gains; or
(iv)
other dedicated revenue
sources, such as carbon use.
(D)
(i)
At the discretion of the
obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the project obligations and secured loan, and all
deposit requirements under the terms of any trust agreement, bond resolution,
or similar agreement securing project obligations, may be applied annually to
prepay the secured loan without penalty.
(ii)
Use of proceeds of refinancing
The secured loan may be
prepaid at any time without penalty from the proceeds of refinancing from
non-Federal funding sources.
(f)
Secured loans and loan guarantees
(1)
(A)
Subject to subparagraph
(B), the Board may enter into agreements with 1 or more obligors to make
secured loans for eligible projects involving advanced climate technologies or
systems.
(B)
Subject to paragraph (2),
the proceeds of a secured loan for an eligible project made available under
this subsection shall be available, in conjunction with the equity of the
obligor and senior debt financing for the eligible project, to pay for eligible
project costs.
(2)
(A)
A secured loan under this
subsection with respect to an eligible project shall be made on such terms and
conditions (including requirements for an audit) as the Board, in consultation
with the Secretary, determines appropriate.
(B)
Subject to subsection
(c)(5), the total amount of the secured loan for an eligible project under this
subsection shall not exceed 50 percent of the reasonably anticipated eligible
project costs of the eligible project.
(C)
The Board may enter into a
contract with the owner or operator of an eligible project to provide a secured
loan during the period—
(i)
beginning on the date that
the financial structure of the eligible project is established; and
(ii)
ending on the date of the
start of construction of the eligible project.
(D)
Subject to subsection
(c)(4)(E), the cost of a secured loan for an eligible project under this
subsection shall be borne by the Secretary.
(E)
(i)
Subject to clause (ii), the
interest rate on a secured loan under this subsection shall be established by
the Secretary.
(ii)
The interest rate on a loan
resulting from a secured loan under this subsection shall not be less than the
current average market yield on outstanding marketable obligations of the
United States of comparable maturity, as of the date of the execution of the
loan agreement.
(F)
The secured loan—
(i)
shall be payable, in whole
or in part, from dedicated revenue sources generated by the eligible
project;
(ii)
shall include a rate
covenant, coverage requirement, or similar security feature supporting the
project obligations; and
(iii)
may have a lien on revenues
described in clause (i), subject to any lien securing project
obligations.
(G)
Rights of third-party creditors
(i)
Against Federal Government
A third-party creditor of
the obligor shall not have any right against the Federal Government with
respect to any payments due to the Federal Government under this
subsection.
(ii)
An obligor may assign the
secured loan to 1 or more lenders or to a trustee on behalf of the
lenders.
(H)
A secured loan for an
eligible project made under this subsection shall be subordinate to senior
private debt issued by a lender for the eligible project.
(I)
A secured loan for an
eligible project under this subsection shall be non-recourse to the obligor in
the event of bankruptcy, insolvency, or liquidation of the eligible
project.
(J)
The Board may establish
fees at a level sufficient to cover all or a portion of the costs to the
Federal Government of making secured loans for an eligible project under this
subsection.
(3)
(A)
The Board shall establish a
repayment schedule and terms and conditions for each secured loan for an
eligible project under this subsection based on the projected cash flow from
revenues for the eligible project.
(B)
Scheduled repayments on a
secured loan for an eligible project under this subsection shall—
(i)
commence not later than 5
years after the scheduled start of commercial operations of the eligible
project; and
(ii)
be completed, with
interest, not later than 35 years after the scheduled date of the start of
commercial operations of the eligible project.
(C)
Sources of repayment funds
The sources of funds for
scheduled loan repayments under this subsection shall include—
(i)
the sale of carbon or
carbon compounds;
(ii)
the sale of electricity or
generating capacity;
(iii)
the sale of sequestration
services;
(iv)
the sale or transmission of
energy;
(v)
revenues associated with
energy efficiency gains; or
(vi)
other dedicated revenue
sources.
(D)
(i)
If, at any time during the
10-year period beginning on the date of the scheduled start of commercial
operation of an eligible project, the eligible project is unable to generate
sufficient revenues to pay the scheduled loan repayments of principal or
interest on the secured loan, the Secretary may, subject to clause (iii), allow
the obligor to add unpaid principal or interest to the outstanding balance of
the secured loan.
(ii)
Any payment deferred under
clause (i) shall—
(I)
continue to accrue interest
in accordance with paragraph (2)(E) until fully repaid; and
(II)
be scheduled to be
amortized over the number of years remaining in the term of the loan in
accordance with subparagraph (B).
(iii)
(I)
Any payment deferral under
clause (i) shall be contingent on the eligible project meeting criteria
established by the Secretary.
(II)
The criteria established
under subclause (I) shall include standards for reasonable assurance of
repayment.
(E)
(i)
At the discretion of the
obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the project obligations and secured loan, and all
deposit requirements under the terms of any trust agreement, bond resolution,
or similar agreement securing project obligations, may be applied annually to
prepay the secured loan without penalty.
(ii)
Use of proceeds of refinancing
The secured loan may be
prepaid at any time without penalty from the proceeds of refinancing from
non-Federal funding sources.
(4)
(A)
Subject to subparagraph
(B), as soon as practicable after substantial completion of an eligible project
and after notifying the obligor, the Board may sell to another entity or
reoffer into the capital markets a secured loan for the eligible project if the
Board determines that the sale or reoffering can be made on favorable
terms.
(B)
In making a sale or
reoffering under subparagraph (A), the Board may not change the original terms
and conditions of the secured loan without the written consent of the
obligor.
(5)
(A)
The Board may provide a
loan guarantee to a lender, in lieu of making a secured loan, under this
subsection if the Board determines that the budgetary cost of the loan
guarantee is substantially the same as that of a secured loan.
(B)
(i)
Except as provided in
clause (ii), the terms of a guaranteed loan shall be consistent with the terms
for a secured loan under this subsection.
(ii)
Interest rate; prepayment
The interest rate on the
guaranteed loan and any prepayment features shall be established by
negotiations between the obligor and the lender, with the consent of the
Board.
(g)
Production incentive payments
(1)
(A)
The Secretary may enter
into an agreement with 1 or more obligors to make a secured loan for an
eligible project selected under subsection (c)(4) that employs 1 or more
advanced climate technologies or systems.
(B)
Production incentive payments
(i)
Amounts loaned to an
obligor under subparagraph (A) shall be made available in the form of a series
of production incentive payments provided by the Board to the obligor during a
period of not more than 10 years, as determined by the Board, beginning after
the date on which commercial project operations start at the eligible
project.
(ii)
Production incentive
payments under clause (i) shall be for an amount equal to 50 percent of the
value of—
(I)
the energy produced or
transmitted by the eligible project during the applicable year; or
(II)
any gains in energy
efficiency achieved by the eligible project during the applicable year.
(2)
(A)
A secured loan under this
subsection shall be subject to such terms and conditions, including any
covenant, representation, warranty, and requirement (including a requirement
for an audit) that the Secretary determines to be appropriate.
(B)
Subject to subsection
(c)(4), the cost of carrying out an agreement entered into under paragraph
(1)(A) shall be paid by the Secretary.
(C)
(i)
Subject to clause (ii), the
interest rate on a secured loan under this subsection shall be established by
the Secretary.
(ii)
The interest rate on a
secured loan under this subsection shall not be less than the current average
market yield on outstanding marketable obligations of the United States of
comparable maturity, as of the date on which the agreement under paragraph
(1)(A) is executed.
(D)
The secured loan—
(i)
shall be payable, in whole
or in part, from dedicated revenue sources generated by the eligible
project;
(ii)
shall include a rate
covenant, coverage requirement, or similar security feature supporting the
eligible project obligations; and
(iii)
may have a lien on revenues
described in clause (i), subject to any lien securing eligible project
obligations.
(E)
Rights of third-party creditors
(i)
Against Federal Government
A third-party creditor of
the obligor shall not have any right against the Federal Government with
respect to any payments due to the Federal Government under the agreement
entered into under paragraph (1)(A).
(ii)
An obligor may assign
production incentive payments to 1 or more lenders or to a trustee on behalf of
the lenders.
(F)
A secured loan under this
subsection shall be subordinate to senior private debt issued by a lender for
the eligible project.
(G)
A secured loan under this
subsection shall be nonrecourse to the obligor in the event of bankruptcy,
insolvency, or liquidation of the eligible project.
(H)
The Secretary may impose
fees at a level sufficient to cover all or part of the costs to the Federal
Government of providing production incentive payments under this
subsection.
(3)
(A)
Schedule, terms, and conditions
The Secretary shall
establish a repayment schedule and terms and conditions for each secured loan
under this subsection based on the projected cash flow from revenues of the
eligible project.
(B)
Scheduled repayments of
principal or interest on a secured loan under this subsection shall—
(i)
commence not later than 5
years after the date on which the last production incentive payment is made by
the Board under paragraph (1)(B); and
(ii)
be completed, with
interest, not later than 10 years after the date on which the last production
incentive payment is made.
(C)
Sources of repayment funds
The sources of funds for
scheduled loan repayments under this subsection include—
(i)
the sale of electricity or
generating capacity;
(ii)
the sale or transmission of
energy;
(iii)
revenues associated with
energy efficiency gains; or
(iv)
other dedicated revenue
sources.
(D)
(i)
If, at any time during the
10–year period beginning on the date on which commercial operations of the
eligible project start, the eligible project is unable to generate sufficient
revenues to pay the scheduled loan repayments of principal or interest on a
secured loan under this subsection, the Secretary may, subject to criteria
established by the Secretary (including standards for reasonable assurances of
repayment), allow the obligor to add unpaid principal and interest to the
outstanding balance of the secured loan.
(ii)
Any payment deferred under
clause (i) shall—
(I)
continue to accrue interest
in accordance with paragraph (2)(C) until fully repaid; and
(II)
be scheduled to be
amortized over the number of years remaining in the term of the loan in
accordance with subparagraph (B).
(E)
(i)
At the discretion of the
obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the eligible project obligations and the secured loan,
and all deposit requirements under the terms of any trust agreement, bond
resolution, or similar agreement securing eligible project obligations, may be
applied annually to prepay loans pursuant to an agreement entered into under
paragraph (1)(A) without penalty.
(ii)
Use of proceeds of refinancing
The secured loan may be
prepaid at any time without penalty from the proceeds of refinancing from
non-Federal funding sources.
(4)
(A)
Subject to subparagraph
(B), as soon as practicable after the date on which the last production
incentive payment is made to the obligor under paragraph (1)(B) and after
notifying the obligor, the Secretary may sell to another entity or reoffer into
the capital markets a secured loan for the eligible project if the Secretary
determines that the sale or reoffering can be made on favorable terms.
(B)
In making a sale or
reoffering under subparagraph (A), the Board may not change the original terms
and conditions of the secured loan without the written consent of the
obligor.
(h)
Other Credit-Based financial assistance mechanisms for
eligible projects
(1)
(A)
The Board may enter into an
agreement with 1 or more obligors to make a secured loan to the obligors for
eligible projects selected under subsection (c) that employ advanced
technologies or systems, the proceeds of which shall be used to—
(i)
finance eligible project
costs; or
(ii)
enhance eligible project
revenues.
(B)
Credit-based financial assistance
Amounts made available as a
secured loan under subparagraph (A) shall be provided by the Board to the
obligor in the form of credit-based financial assistance mechanisms that are
not otherwise specifically provided for in subsections (d) through (g), as
determined to be appropriate by the Secretary.
(2)
(A)
A secured loan under this
subsection shall be subject to such terms and conditions (including any
covenants, representations, warranties, and requirements (including a
requirement for an audit)) as the Secretary determines to be
appropriate.
(B)
Subject to subsection
(c)(5), the total amount of the secured loan under this subsection shall not
exceed 50 percent of the reasonably anticipated eligible project costs.
(C)
The Board may enter into a
contract with the obligor to provide credit-based financial assistance to an
eligible project during the period—
(i)
beginning on the date that
the financial structure of the eligible project is established; and
(ii)
ending on the date of the
start of construction of the eligible project.
(D)
Subject to subsection
(c)(4)(E), the cost of carrying out an agreement entered into under paragraph
(1)(A) shall be paid by the Board.
(E)
(i)
Subject to clause (ii), the
interest rate on a secured loan under this subsection shall be established by
the Board.
(ii)
The interest rate on a
secured loan under this subsection shall not be less than the current average
market yield on outstanding marketable obligations of the United States of
comparable maturity, as of the date of the execution of the secured loan
agreement.
(F)
The secured loan—
(i)
shall be payable, in whole
or in part, from dedicated revenue sources generated by the eligible
project;
(ii)
shall include a rate
covenant, coverage requirement, or similar security feature supporting the
eligible project obligations; and
(iii)
may have a lien on revenues
described in clause (i), subject to any lien securing eligible project
obligations.
(G)
Rights of third-party creditors
(i)
Against Federal Government
A third-party creditor of
the obligor shall not have any right against the Federal Government with
respect to any payments due to the Federal Government under this
subsection.
(ii)
An obligor may assign
payments made pursuant to an agreement to provide credit-based financial
assistance under this subsection to 1 or more lenders or to a trustee on behalf
of the lenders.
(H)
A secured loan under this
subsection shall be subordinate to senior private debt issued by a lender for
the eligible project.
(I)
A secured loan under this
subsection shall be nonrecourse to the obligor in the event of bankruptcy,
insolvency, or liquidation of the eligible project.
(J)
The Board may establish
fees at a level sufficient to cover all or part of the costs to the Federal
Government of providing credit-based financial assistance under this
subsection.
(3)
(A)
Schedule and terms and conditions
The Board shall establish a
repayment schedule and terms and conditions for each secured loan under this
subsection based on the projected cash flow from eligible project
revenues.
(B)
Scheduled loan repayments
of principal or interest on a secured loan under this subsection shall—
(i)
commence not later than 5
years after the date of substantial completion of the eligible project;
and
(ii)
be completed, with
interest, not later than 35 years after the date of substantial completion of
the eligible project.
(C)
Sources of repayment funds
The sources of funds for
scheduled loan repayments under this subsection shall include—
(i)
the sale of electricity or
generating capacity;
(ii)
the sale or transmission of
energy;
(iii)
revenues associated with
energy efficiency gains; or
(iv)
other dedicated revenue
sources, such as carbon sequestration.
(D)
(i)
If, at any time during the
10–year period beginning on the date of the start of commercial operations of
the eligible project, the eligible project is unable to generate sufficient
revenues to pay the scheduled loan repayments of principal or interest on a
secured loan under this subsection, the Secretary may, subject to criteria
established by the Secretary (including standards for reasonable assurances of
repayment), allow the obligor to add unpaid principal and interest to the
outstanding balance of the secured loan.
(ii)
Any payment deferred under
clause (i) shall—
(I)
continue to accrue interest
in accordance with paragraph (2)(E) until fully repaid; and
(II)
be scheduled to be
amortized over the number of years remaining in the term of the loan in
accordance with subparagraph (B).
(E)
(i)
At the discretion of the
obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the eligible project obligations and secured loan, and
all deposit requirements under the terms of any trust agreement, bond
resolution, or similar agreement securing eligible project obligations, may be
applied annually to prepay a secured loan under this subsection without
penalty.
(ii)
Use of proceeds of refinancing
A secured loan under this
subsection may be prepaid at any time without penalty from the proceeds of
refinancing from non-Federal funding sources.
(4)
(A)
Subject to subparagraph
(B), as soon as practicable after the start of commercial operations of an
eligible project and after notifying the obligor, the Board may sell to another
entity or reoffer into the capital markets a secured loan for the eligible
project under this subsection if the Secretary determines that the sale or
reoffering can be made on favorable terms.
(B)
In making a sale or
reoffering under subparagraph (A), the Board may not change the original terms
and conditions of the secured loan without the written consent of the
obligor.
(i)
Federal, state, and local regulatory requirements
The provision of Federal
financial assistance to an eligible project under this section shall
not—
(1)
relieve any recipient of
the assistance of any obligation to obtain any required Federal, State, or
local regulatory requirement, permit, or approval with respect to the eligible
project;
(2)
limit the right of any unit
of Federal, State, or local government to approve or regulate any rate of
return on private equity invested in the eligible project; or
(3)
otherwise supersede any
Federal, State, or local law (including any regulation) applicable to the
construction or operation of the eligible project.
(j)
Authorization of appropriations
There is authorized to be
appropriated to carry out this section $400,000,000 for each of fiscal years
2006 through 2010, to remain available until expended.
(k)
The authority provided by
this section terminates effective December 31, 2010.
.
4.
National Climate Registry Initiative
Title XVI of the Energy
Policy Act of 1992 (42 U.S.C. 13381 et seq.) (as amended by section 3) is
amended by adding at the end the following:
1612.
National Climate Registry Initiative
(a)
The purpose of this section
is to establish a new national greenhouse gas registry—
(1)
to further encourage
voluntary efforts, by persons and entities conducting business and other
operations in the United States, to implement actions, projects, and measures
that reduce greenhouse gas emissions;
(2)
to encourage those persons
and entities to monitor and voluntarily report direct or indirect greenhouse
gas emissions from—
(A)
the facilities of the
persons and entities; and
(B)
to the maximum extent
practicable, other types of sources;
(3)
to adopt a procedure and
uniform format for use by the persons and entities in establishing and
voluntarily reporting greenhouse gas emission baselines in connection with, and
furtherance of, reductions of greenhouse gas emissions;
(4)
to provide verification
mechanisms to ensure, for participants and the public, a high level of
confidence in accuracy and verifiability of reports made to a national
greenhouse gas registry;
(5)
to encourage persons and
entities, through voluntary agreements entered into with the Secretary, to
annually report greenhouse gas emissions from the facilities of the persons and
entities;
(6)
to provide to persons and
entities that enter into those voluntary agreements and reduce greenhouse gas
emissions transferable credits that may be used for any incentive,
market-based, or regulatory program determined by Congress to be necessary and
feasible to reduce the risk of climate change and effects of climate change;
and
(7)
to provide for the
registration, transfer, and tracking of the ownership or holding of those
credits for purposes of facilitating voluntary trading among persons and
entities.
(b)
In this section:
(1)
The term
Committee
means the Interagency Coordinating Committee on
Climate Change Technology established under section 1610(c)(1).
(2)
The term
entity means—
(A)
a public person;
(B)
a Federal, State,
interstate, or local governmental agency, department, or corporation;
and
(C)
any other publicly-owned
organization.
(3)
The term
facility means 2 or more buildings, structures, or installations,
or 2 or more units of a building, structure, or installation, that—
(A)
are located on contiguous
or adjacent parcels of land;
(B)
are under common control of
the same person or entity; and
(C)
are a source of greenhouse
gas emissions in excess of a limitation established under this section.
(4)
The term greenhouse
gas means—
(A)
an anthropogenic gaseous
constituent of the atmosphere (including carbon dioxide, methane, nitrous
oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride)
that—
(i)
absorbs and reemits
infrared radiation; and
(ii)
influences climate;
and
(B)
an anthropogenic aerosol
(such as black soot) that—
(i)
absorbs solar radiation;
and
(ii)
influences climate.
(5)
The term
person means an individual, corporation, association, joint
venture, cooperative, or partnership.
(6)
The term
reduction means an action, project, or measure carried out, within
or outside the United States, by a person or entity to directly or indirectly
reduce, avoid, or sequester emissions of 1 or more greenhouse gases.
(7)
The term
registry means the national greenhouse gas registry established
under subsection (c)(1)(A).
(8)
The term
Secretary means the Secretary of Energy, acting through the
Administrator of the Energy Information Administration.
(c)
National greenhouse gas registry
(1)
(A)
Not later than 1 year after
the enactment of this section, the President, in consultation with the
Committee, shall establish a national greenhouse gas registry.
(B)
The registry shall be
administered by the Secretary in accordance with applicable provisions
of—
(i)
this section; and
(ii)
the Department of Energy
Organization Act (42
U.S.C. 7101 et seq.).
(2)
On establishment of the
registry under paragraph (1) and issuance of the guidelines in accordance with
subsection (d)(1), the registry shall serve as the depository for the United
States for data on greenhouse gas emissions and emission reductions that are
collected from and reported by persons or entities that own, or conduct
business and other operations at, 1 or more facilities in the United
States.
(3)
(A)
Any person or entity
conducting business or other activities in the United States may, in accordance
with the guidelines issued under subsection (d)(1) and the conditions described
in subparagraph (B), voluntarily report to the registry—
(i)
total levels of greenhouse
gas emissions of the person or entity; and
(ii)
certified emission
reductions of the person or entity.
(B)
The conditions described in
this subparagraph are that—
(i)
with respect to a report
described in subparagraph (A)(i), the report represents a complete and accurate
inventory of—
(I)
greenhouse gas emissions
from facilities of, and operations conducted by, the person or entity within
the United States; and
(II)
any domestic or
international greenhouse gas emission reduction activities of the person or
entity; and
(ii)
with respect to a report
described in subparagraph (A)(ii), the reductions have been verified by an
independent third-party or other process—
(I)
in accordance with the
guidelines issued under subsection (d)(1)(B)(ii); or
(II)
by other means determined
to be appropriate by the Secretary.
(4)
Confidentiality of information
Trade secret information,
and commercial and financial information that is privileged and confidential,
that is submitted to the registry under paragraph (3) or otherwise made
available under any other provision of this section may be disclosed by the
registry only in accordance with section 552(b)(4) of title 5, United States
Code.
(d)
(1)
(A)
Not later than 1 year after
the date of establishment of the registry under subsection (c)(1)(A), the
Secretary, in consultation with the Committee, shall issue guidelines
establishing procedures for the administration of the registry.
(B)
The guidelines issued under
subparagraph (A) shall include—
(i)
means and methods by which
a person or entity may determine, quantify, and report, by appropriate and
credible means, annual baseline emission levels of the person or entity, taking
into consideration any reports made by the person or entity under other Federal
programs;
(ii)
procedures for the use of
an independent third-party or other effective verification process for emission
levels and reductions reported under subsection (c)(3)(A) that are
developed—
(I)
in accordance with
authority available to the Secretary under this section and other applicable
provisions of law; and
(II)
by taking into
consideration, to the maximum extent practicable—
-
(aa)
the costs, risks, and
voluntary nature of the registry; and
-
(bb)
other relevant
factors;
(iii)
(I)
a range of reference cases
for reporting of project-based emission reductions in various sectors;
and
(II)
any benchmark and default
methodologies and practices that may be used as reference cases for eligible
projects;
(iv)
safeguards—
(I)
to prevent and address
duplicative reporting (including inadvertent reporting) of the same greenhouse
gas emissions or emission reductions by more than 1 reporting person or entity;
and
(II)
to provide for corrections
and adjustments in data, as necessary, in cases of duplicative
reporting;
(v)
procedures and criteria for
the review and registration of ownership or holding of all or any portion of a
reported, independently-verified emission reduction project, action, or
measure;
(vi)
measures, or a process, for
providing to a person or entity participating in the registry such appropriate
number of transferable credits with unique serial numbers as reflects the
verified greenhouse gas emission reductions accomplished by the person or
entity; and
(vii)
such accounting provisions
as are necessary to permit any change in registration or transfer of ownership
of a credit described in clause (vi) that results from a voluntary, private
transaction between 1 or more persons or entities, including the requirement
that the Secretary shall be notified of any such change or transfer not later
than 30 days after the date on which the change or transfer is
effectuated.
(2)
In developing the
guidelines under paragraph (1), the Secretary shall take into
consideration—
(A)
(i)
the guidelines for
voluntary emission reporting issued under section 1605(b), as in effect as of
the date of enactment of this section;
(ii)
the experience of the
Secretary in applying those guidelines; and
(iii)
any revision to those
guidelines initiated by the Secretary in response to any directive of the
President issued before the date of enactment of this section;
(B)
protocols and guidelines
developed under any Federal, State, local, or private voluntary greenhouse gas
emission reporting or reduction program;
(C)
the differences between,
and potential uniqueness of the facilities, operations, and business and other
relevant practices of, persons and entities in the private and public sectors
that the Secretary expects to participate in the registry;
(D)
issues, such as
comparability, that are associated with the reporting of emission baselines and
reductions for various projects and activities;
(E)
the appropriate level or
threshold of emissions applicable to a facility, project, or activity of a
person or entity that may be reasonably and cost-effectively identified,
measured, and voluntarily reported, taking into consideration—
(i)
different types of
facilities, projects, and activities; and
(ii)
the de minimis nature, and
sources, of certain emissions; and
(F)
any other factor that the
Secretary determines to be appropriate.
(3)
(A)
In accordance with section
3109 of title 5, United Sates Code, the Secretary and any member of the
Committee may secure the services of 1 or more experts or consultants in the
private and nonprofit sectors in the areas of greenhouse gas measurement,
certification, and emission trading.
(B)
Grants, contracts, and agreements
In securing a service under
subparagraph (A), the Secretary or the member of the Committee securing the
service may use any grant, contract, cooperative agreement, or other
arrangement authorized by applicable law and available to the Secretary or the
member of the Committee.
(4)
Transferability of prior reports
An emission report or
reduction made by a person or entity under section 1605(b), or under any other
Federal or State voluntary greenhouse gas emission reduction program, may be
independently verified and reported to the registry in accordance with the
guidelines issued under paragraph (1).
(5)
The Secretary shall—
(A)
make the guidelines issued
under paragraph (1) available in draft form for public notice and opportunity
for comment for a period of at least 90 days; and
(B)
after that 90-day period,
adopt the guidelines for use in implementing this section.
(6)
The Secretary, through the
Committee, shall periodically review and, as necessary, revise, in accordance
with paragraph (5), the guidelines issued under paragraph (1).
(e)
(1)
Any person or entity may
voluntarily enter into an agreement with the Secretary to provide that—
(A)
the person or entity (or
any successor of the person or entity) shall annually report to the registry
the greenhouse gas emissions of the person or entity (including the sources of
those emissions) that—
(i)
are from applicable
facilities and operations of the person or entity; and
(ii)
generate net emissions at a
level above any de minimis threshold specified in the guidelines issued by the
Secretary under subsection (d)(1);
(B)
the person or entity (or
any successor of the person or entity)—
(i)
commits to report to, and
participate in, the registry for a period of at least 5 calendar years;
and
(ii)
any agreement for such a
commitment may be renewed by consent of the person or entity and the
Secretary;
(C)
for purposes of measuring
performance under the agreement, the person or entity (or any successor of the
person or entity) and the Secretary shall determine—
(i)
in accordance with the
guidelines issued under subsection (d)(1), a baseline emission level of the
person or entity for a representative period preceding the effective date of
the agreement; and
(ii)
emission reduction goals of
the person or entity, taking into consideration—
(I)
the baseline emission level
determined under clause (i); and
(II)
any relevant economic and
operational factors that may affect the baseline emission level throughout the
term of the agreement; and
(D)
for certified emission
reductions made relative to the baseline emission level, the Secretary shall
provide, to the person or entity, at the request of the person or entity,
transferable credits with unique assigned serial numbers that—
(i)
may be used by the person
or entity toward meeting emission reduction goals established under the
agreement;
(ii)
may be transferred, through
a voluntary, private transaction, to any other person or entity; or
(iii)
shall be applicable toward
any incentive, market-based, or regulatory program determined by Congress to be
necessary and feasible to reduce the risk of climate change and effects of
climate change.
(2)
Public notice and comment
(A)
Not later than 30 days
before the date on which an agreement described in paragraph (1) is finalized,
the Secretary shall—
(i)
publish in the Federal
Register a notice of finalization for the agreement; and
(ii)
provide an opportunity for
written public comment.
(B)
The Secretary—
(i)
shall review each comment
received under subparagraph (A)(ii); and
(ii)
after reviewing the
comments, may—
(I)
withdraw the agreement
described in paragraph (1); or
(II)
agree with each person or
entity that is a party to the agreement to—
-
(aa)
revise and finalize the
agreement; or
-
(bb)
finalize the agreement
without substantive change.
(C)
An agreement described in
paragraph (1) shall be—
(i)
maintained in the registry;
and
(ii)
made available to the
public.
(3)
If a person or entity fails
to certify that emissions from applicable facilities of the person or entity
are less than the emission reduction goals of the person or entity contained in
an agreement described in paragraph (1), the person or entity shall take such
actions as are necessary to reduce the emissions of the person or entity,
including—
(A)
the redemption of any
transferable credits of the person or entity that were acquired in previous
years;
(B)
the acquisition, through
private, voluntary agreements, of transferable credits from other persons or
entities participating in the registry; or
(C)
the undertaking of
additional emission reduction activities in subsequent years, as determined in
accordance with an agreement between the person or entity and the
Secretary.
(4)
Nothing in this subsection
provides any regulatory or other authority regarding the reporting of
greenhouse gas emissions or reductions in those emissions.
(f)
Measurement and verification
(1)
(A)
The Secretary of Commerce,
acting through the Director of the National Institute of Standards and
Technology and in consultation with the Secretary, shall develop standards and
best practices for accurate measurement and verification of greenhouse gas
emissions and emission reductions.
(B)
The standards and best
practices developed under subparagraph (A) shall address the need for—
(i)
standardized measurement
and verification practices for reports made by all persons and entities
participating in the registry, taking into account—
(I)
protocols and standards
already in use by persons or entities desiring to participate in the
registry;
(II)
boundary issues, such as
leakage and shifted use;
(III)
avoidance of duplicative
counting and reporting of greenhouse gas emissions and emission reductions;
and
(IV)
such other factors as the
Secretary of Commerce and the Secretary determine to be appropriate;
(ii)
measurement and
verification of actions taken to reduce, avoid, or sequester greenhouse gas
emissions;
(iii)
measurement, in
coordination with the Secretary of Agriculture, of the results of the use of
carbon sequestration and carbon recapture technologies, including—
(I)
organic soil carbon
sequestration practices; and
(II)
forest preservation and
reforestation activities that adequately address the issues of permanence,
leakage, and verification; and
(iv)
such other measurement and
verification standards as the Secretary of Commerce, the Secretary of
Agriculture, and the Secretary determine to be appropriate.
(2)
The Secretary of Commerce
shall—
(A)
make the standards and best
practices developed under paragraph (1)(A) available in draft form for public
notice and opportunity for comment for a period of at least 90 days; and
(B)
as soon as practicable
after the end of the 90-day period, in coordination with the Secretary, adopt
the standards and best practices for use in implementing this section.
(g)
Certified independent third parties
(1)
The Secretary and the
Secretary of Commerce, acting through the Director of the National Institute of
Standards, shall develop standards for certification of parties to verify the
accuracy and reliability of reports submitted under this section, including
standards that—
(A)
prohibit a certified party
from participating in the registry through the ownership or transaction of
transferable credits recorded in the registry;
(B)
prohibit the receipt by a
certified party of compensation in the form of a commission received by the
certified party based on the quantity of emission reductions verified by the
certified party; and
(C)
authorize certified parties
to enter into agreements with persons engaged in trading of transferable
credits recorded in the registry.
(2)
List of certified parties
The Secretary shall
maintain and, on request of the public or a person or entity making a report
under this section, make available, a list of certified parties described in
paragraph (1), and clients of the certified parties, that submit 1 or more
reports under this section.
(h)
(1)
Not later than 1 year after
the date of issuance of guidelines under subsection (d)(1), and biennially
thereafter, the President, acting through the Committee, shall submit to
Congress a report on the status of the registry.
(2)
The report shall
contain—
(A)
an assessment, expressed in
terms of geographic locations and national emissions represented, of the level
of participation in the registry;
(B)
an assessment of the
effectiveness of voluntary reporting agreements in enhancing participation in
the registry;
(C)
an assessment of the extent
of use of the registry for emission trading and other purposes;
(D)
an assessment of progress
toward individual and national emission reduction goals; and
(E)
(i)
an inventory of
administrative actions implemented, or planned to be implemented, to improve
the registry or the guidelines issued under subsection (d)(1); and
(ii)
such recommendations for
legislation to modify this section or section 1605 as the President determines
to be necessary to carry out this section.
(i)
Review by National Academy of Sciences
The Secretary, in
consultation with the Committee, shall—
(1)
not later than 1 year after
the date of issuance of the guidelines under subsection (d)(1), enter into an
agreement with the National Academy of Sciences under which the National
Academy of Sciences shall conduct, not later than 180 days after the date of
execution of the agreement, a review of the scientific and technological
methods, assumptions, and standards used by the Secretary and the Secretary of
Commerce in developing the guidelines; and
(2)
on completion of the review
under subparagraph (A), submit to the President and Congress a report that
describes the results of the review (including any recommendations of the
Secretary).
(j)
The authority provided by
this section terminates effective December 31, 2010.
.