[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6316 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6316

  To reduce global greenhouse gas emissions through the creation of a 
domestic carbon market and international trade measures, and to direct 
               the revenue therefrom to public interests.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 19, 2008

Mr. Doggett (for himself, Mr. Blumenauer, Mr. Van Hollen, Mr. Emanuel, 
     Mr. Larson of Connecticut, Ms. DeLauro, Mr. George Miller of 
  California, Ms. Slaughter, Mr. Brady of Pennsylvania, Ms. Wasserman 
Schultz, Mr. Lewis of Georgia, Mr. McDermott, Mr. Olver, Mr. Holt, Mr. 
Stark, Ms. Berkley, Ms. Schwartz, Mr. Crowley, Mr. McNulty, Mr. Meek of 
     Florida, Mr. Moran of Virginia, Mr. Pascrell, Mr. Thompson of 
 California, Mr. Conyers, Mrs. Jones of Ohio, Mr. Ackerman, Mr. Bishop 
  of New York, Mr. Capuano, Ms. Castor, Mr. Chandler, Ms. Clarke, Mr. 
 Cleaver, Mr. Cohen, Mr. Courtney, Mr. Davis of Illinois, Mr. Ellison, 
 Mr. Farr, Mr. Filner, Mr. Gutierrez, Mr. Hall of New York, Mr. Hare, 
    Mr. Hinchey, Ms. Hirono, Mr. Honda, Mr. Israel, Mr. Jackson of 
Illinois, Ms. Jackson-Lee of Texas, Ms. Eddie Bernice Johnson of Texas, 
    Mr. Johnson of Georgia, Mr. Kennedy, Mr. Klein of Florida, Mr. 
 Kucinich, Ms. Lee, Ms. Zoe Lofgren of California, Mrs. Maloney of New 
     York, Mr. McGovern, Ms. Moore of Wisconsin, Mr. Nadler, Mrs. 
 Napolitano, Ms. Norton, Mr. Payne, Ms. Loretta Sanchez of California, 
 Mr. Schiff, Mr. Sestak, Mr. Sherman, Mrs. Tauscher, Ms. Tsongas, Ms. 
Waters, Ms. Watson, Mr. Welch of Vermont, Mr. Wexler, Ms. Woolsey, Mr. 
Wu, Mr. Yarmuth, Mr. Thompson of Mississippi, Mr. Hastings of Florida, 
 Mr. Grijalva, Mr. Fattah, and Mr. Delahunt) introduced the following 
  bill; which was referred to the Committee on Ways and Means, and in 
  addition to the Committees on Energy and Commerce, Foreign Affairs, 
   Science and Technology, Financial Services, Education and Labor, 
Natural Resources, 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 reduce global greenhouse gas emissions through the creation of a 
domestic carbon market and international trade measures, and to direct 
               the revenue therefrom to public interests.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Climate Market, 
Auction, Trust & Trade Emissions Reduction System Act of 2008'' or the 
``Climate MATTERS Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
                      TITLE I--GLOBAL COOPERATION

                     Subtitle A--General Provisions

Sec. 101. Definitions.
              Subtitle B--International Reserve Allowances

Sec. 111. International reserve allowance program.
Sec. 112. Adjustment of international reserve allowance requirements.
Sec. 113. International Climate Change Commission.
Sec. 114. Determinations of comparable action.
Sec. 115. International agreements.
                      TITLE II--REVENUE PROVISIONS

Sec. 201. Issuing, auctioning, and administering emissions allowances.
    TITLE III--CITIZEN PROTECTION AND DEFICIT REDUCTION TRUST FUNDS

                Subtitle A--Establishment of Trust Funds

Sec. 301. Establishment of citizen protection and deficit reduction 
                            trust funds.
                Subtitle B--Citizen Protection Programs

Sec. 310. Definitions.
                      Part 1--Consumer Assistance

Sec. 311. Allocation of account funds.
Sec. 312. Climate change rebate program.
Sec. 313. Healthy families fund.
           Part 2--Investment in Natural Resource Adaptation

Sec. 321. Definitions.
Sec. 322. Adaptation fund.
                          Part 3--Early Action

Sec. 331. Early action.
                    Part 4--State and Tribal Action

Sec. 341. Allocation for energy savings.
Sec. 342. Allocation for States with programs that exceed Federal 
                            emission reduction targets.
Sec. 343. General allocation.
               Part 5--Domestic Agriculture and Forestry

Sec. 351. Allocation.
Sec. 352. Agricultural and forestry greenhouse gas management research.
Sec. 353. Distribution.
                     Part 6--International Forestry

Sec. 361. Findings.
Sec. 362. Definition of deforestation reduction activities.
Sec. 363. Allocation.
Sec. 364. Quality criteria for deforestation reduction activities.
Sec. 365. Eligibility for deforestation reduction activities.
Sec. 366. Reviews and discount.
                       Part 7--Energy Efficiency

Sec. 371. Allocation.
Sec. 372. Distribution.
Sec. 373. Use.
Sec. 374. Reporting.
                   Part 8--Alternative Transportation

Sec. 381. Grants to provide for additional and improved public 
                            transportation service.
Sec. 382. Grants for construction of new public transportation 
                            projects.
Sec. 383. Grants for transportation alternatives and travel demand 
                            reduction projects.
Sec. 384. Technical capacity and standards.
Sec. 385. Study and standards.
Sec. 386. Condition for receipt of funds.
          TITLE IV--EMISSIONS DETERMINATIONS AND MISCELLANEOUS

Sec. 401. Definitions.
Sec. 402. Federal Greenhouse Gas Registry, emissions determination, and 
                            uncovered sector emissions.
Sec. 403. Paramount interest waiver.
Sec. 404. Administrative procedure and judicial review.
Sec. 405. Retention of State authority.
Sec. 406. Tribal authority.
Sec. 407. Authorization of appropriations.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to establish the core of a Federal program that will 
        reduce United States greenhouse gas emissions substantially 
        enough between 2008 and 2050 to avert the catastrophic impacts 
        of global climate change;
            (2) to raise revenue to be used for positive environmental 
        and social purposes to offset the effects of climate change; 
        and
            (3) to accomplish that purpose while preserving robust 
        growth in the United States economy, creating new jobs, and 
        avoiding the imposition of hardship on United States citizens.

                      TITLE I--GLOBAL COOPERATION

                     Subtitle A--General Provisions

SEC. 101. DEFINITIONS.

    In this title:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Baseline emissions level.--
                    (A) Covered goods.--With respect to covered goods 
                of a WTO participant, the term ``baseline emissions 
                level'' means, as determined by the Commission, the 
                total average annual greenhouse gas emissions 
                attributed to a category of covered goods of the WTO 
                participant during the period beginning on January 1, 
                2010, and ending on December 31, 2012, based on--
                            (i) relevant data available for that 
                        period; and
                            (ii) to the extent necessary with respect 
                        to a specific category of covered goods, 
                        economic and engineering models and best 
                        available information on technology performance 
                        levels for the manufacture of that category of 
                        covered goods.
                    (B) WTO participants.--With respect to a WTO 
                participant, the term ``baseline emissions level'' 
                means, as determined by the Commission, the total 
                annual nationwide greenhouse gas emissions attributed 
                to the WTO participant during the period beginning on 
                January 1, 2010, and ending on December 31, 2012, based 
                on best available information.
            (3)  Best available information.--The term ``best available 
        information'' means--
                    (A) all relevant data that is available for the 
                particular period; and
                    (B) to the extent necessary, economic and 
                engineering models, best available information on 
                technology performance levels, and any other useful 
                measure or technique for estimating the emissions from 
                such emissions activities.
            (4) Carbon dioxide equivalent.--The term ``carbon dioxide 
        equivalent'' means, for each greenhouse gas, the quantity of 
        the greenhouse gas that the Administrator determines makes the 
        same contribution to global warming as 1 metric ton of carbon 
        dioxide.
            (5) Commission.--The term ``Commission'' means the 
        International Climate Change Commission established under 
        section 113.
            (6) Comparable action.--The term ``comparable action'' 
        means any greenhouse gas regulatory programs, requirements, and 
        other measures adopted by a WTO participant that, in 
        combination, are comparable in effect to actions carried out by 
        the United States, through Federal, State, and local measures, 
        to limit greenhouse gas emissions pursuant to this Act and the 
        amendments made by this Act, as determined by the Commission 
        under section 114.
            (7) Compliance year.--The term ``compliance year'' means 
        each calendar year for which the requirements of this title 
        apply to a category of covered goods of a covered WTO 
        participant that is imported into the United States.
            (8) Covered wto participant.--The term ``covered WTO 
        participant'' means a WTO participant that is included on the 
        covered list prepared under section 111 (b)(3).
            (9) Covered good.--The term ``covered good'' means a good 
        that (as identified by the Secretary, in consultation with the 
        Administrator, by rule)--
                    (A) is a primary product or a manufactured item for 
                consumption;
                    (B) generates, in the course of the manufacture of 
                the good, a substantial quantity of greenhouse gas 
                emissions, including indirect greenhouse gas emissions; 
                and
                    (C) is closely related to a good the cost of 
                production of which in the United States is affected by 
                a requirement of this Act or the amendments made by 
                this Act.
            (10) Emission allowance.--The term ``emission allowance'' 
        means an authorization to emit 1 carbon dioxide equivalent of 
        greenhouse gas.
            (11) Enter; entry.--The terms ``enter'' and ``entry'' into 
        the United States refer to the entry, or withdrawal from 
        warehouse for consumption, in the customs territory of the 
        United States.
            (12) Greenhouse gas.--The term ``greenhouse gas'' means any 
        of--
                    (A) carbon dioxide;
                    (B) methane;
                    (C) nitrous oxide;
                    (D) sulfur hexafluoride;
                    (E) a perfluorocarbon;
                    (F) a hydrofluorocarbon; or
                    (G) any other anthropogenically-emitted gas that is 
                determined by the Administrator, after notice and 
                comment, to contribute to global warming to a non-
                negligible degree.
            (13) Greenhouse gas emissions.--The term ``greenhouse gas 
        emissions'' means emissions of a greenhouse gas, including--
                    (A) stationary combustion source emissions emitted 
                as a result of combustion of fuels in stationary 
                equipment, such as boilers, furnaces, burners, 
                turbines, heaters, incinerators, engines, flares, and 
                other similar sources;
                    (B) process emissions consisting of emissions from 
                chemical or physical processes other than combustion;
                    (C) fugitive emissions consisting of intentional 
                and unintentional emissions from equipment leaks, such 
                as joints, seals, packing, and gaskets, or from piles, 
                pits, cooling towers, and other similar sources; and
                    (D) biogenic emissions resulting from biological 
                processes, such as anaerobic decomposition, 
                nitrification, and denitrification.
            (14) Indirect greenhouse gas emissions.--The term 
        ``indirect greenhouse gas emissions'' means any greenhouse gas 
        emissions resulting from the generation of electricity that is 
        consumed during the manufacture of a good.
            (15) International reserve allowance.--The term 
        ``international reserve allowance'' means an allowance 
        (denominated in units of metric tons of carbon dioxide 
        equivalent) that is--
                    (A) purchased from a special reserve of emission 
                allowances pursuant to section 111(a)(2); and
                    (B) used for purposes of meeting the requirements 
                of section 111.
            (16) Manufactured item for consumption.--The term 
        ``manufactured item for consumption'' means any good or 
        product--
                    (A) that is not a primary product;
                    (B) that generates, in the course of its 
                manufacture, a substantial amount of direct greenhouse 
                gas emissions or indirect greenhouse gas emissions, 
                including such emissions that are attributable to the 
                inclusion of a primary product in the manufactured item 
                for consumption; and
                    (C) for which the Commission determines that the 
                application of an international reserve allowance 
                requirement under section 111 to the particular 
                category of goods or products is administratively 
                feasible and necessary to achieve the purposes of this 
                title.
            (17) Percentage change in greenhouse gas emissions.--The 
        term ``percentage change in greenhouse gas emissions'' means, 
        as determined by the Secretary, in consultation with the 
        Administrator, the percentage by which greenhouse gas emissions 
        on a nationwide basis in a WTO participant has decreased or 
        increased (as the case may be) from the baseline emissions 
        level of the WTO participant. The percentage change for a WTO 
        participant shall equal the quotient obtained by dividing--
                    (A) the amount of the decrease or increase in the 
                total nationwide emissions for the WTO participant, as 
                measured by comparing such total emissions for the 
                relevant calendar year, to the baseline emissions level 
                for the WTO participant; by
                    (B) the baseline emissions level for the WTO 
                participant.
            (18) Primary product.--The term ``primary product'' means--
                    (A) iron, steel, aluminum, cement, bulk glass, 
                paper pulp, chemicals, or industrial ceramics; or
                    (B) any other manufactured product that--
                            (i) is sold in bulk for purposes of further 
                        manufacture; and
                            (ii) generates, in the course of the 
                        manufacture of the product, greenhouse gas 
                        emissions and indirect greenhouse gas emissions 
                        that are comparable (on an emissions-per-dollar 
                        basis) to emissions generated in the 
                        manufacture of products by covered facilities 
                        in the industrial sector.
            (19) Retire an allowance.--To ``retire'' an allowance is to 
        disqualify the allowance for any subsequent use, regardless of 
        whether the use is a sale, exchange, or submission of the 
        allowance in satisfying a compliance obligation.
            (20) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (21) Sequestration.--The term ``sequestration'' means the 
        capture, permanent separation, isolation, or removal of 
        greenhouse gases from the atmosphere, as determined by the 
        Secretary, after consultation with the Administrator.
            (22) Trade agreement.--The term ``trade agreement'' means 
        any agreement between the United States and one or more foreign 
        countries providing for the reduction of tariff or nontariff 
        barriers, including the Agreement establishing the World Trade 
        Organization, done at Marrakesh on April 15, 1994.
            (23) U.S. customs and border protection.--The term ``U.S. 
        Customs and Border Protection'' means U.S. Customs and Border 
        Protection of the Department of Homeland Security.
            (24) WTO participant.--The term ``WTO participant'' means a 
        member of, or observer government to, the World Trade 
        Organization (WTO), other than the United States.

              Subtitle B--International Reserve Allowances

SEC. 111. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary shall establish a program 
        under which the Secretary, during the 1-year period beginning 
        on January 1, 2014, and annually thereafter, shall offer for 
        sale to United States importers international reserve 
        allowances in accordance with this subsection.
            (2) Source.--International reserve allowances under 
        paragraph (1) shall be issued from a special reserve of 
        emission allowances that is separate from, and established in 
        addition to, the quantity of emission allowances established 
        under section 9911 of the Internal Revenue Code of 1986.
            (3) Price.--
                    (A) In general.--Subject to subparagraph (B), the 
                Secretary shall establish, by rule, a methodology for 
                determining the price of international reserve 
                allowances for each compliance year at a level that 
                does not exceed the market price of emission allowances 
                established under section 9911 of the Internal Revenue 
                Code of 1986 for the compliance year.
                    (B) Maximum price.--The price for an international 
                reserve allowance under subparagraph (A) shall not 
                exceed the clearing price for current compliance year 
                allowances established at the most recent auction of 
                allowances under section 9912 of the Internal Revenue 
                Code of 1986.
            (4) Serial number.--The Secretary shall assign a unique 
        serial number to each international reserve allowance issued 
        under this subsection.
            (5) Administration of system.--The Secretary may provide, 
        by rule, for the administration of the system of international 
        reserve allowances in a manner consistent with the carbon 
        market established under subtitle L of the Internal Revenue 
        Code of 1986.
            (6) Regulated entities.--International reserve allowances 
        may not be submitted by persons subject to the allowance 
        submission requirements of section 9901 or 9913 of the Internal 
        Revenue Code of 1986 to comply with such allowance submission 
        requirements.
            (7) Proceeds.--All proceeds from the sale of international 
        reserve allowances under this subsection shall be allocated to 
        a program that the Secretary, in coordination with the 
        Secretary of State, shall establish to mitigate the negative 
        impacts of global climate change on disadvantaged communities 
        in WTO participants.
    (b) WTO Participant Lists.--
            (1) In general.--Not later than January 1, 2015, and 
        annually thereafter, the Secretary shall develop and publish in 
        the Federal Register 2 lists of WTO participants, in accordance 
        with this subsection.
            (2) Excluded list.--
                    (A) In general.--The Secretary, in consultation 
                with the Commission, shall identify and publish in a 
                list, to be known as the ``excluded list''--
                            (i) each WTO participant determined by the 
                        Commission under section 114(a) to have taken 
                        action comparable to that taken by the United 
                        States to limit the greenhouse gas emissions of 
                        the WTO participant;
                            (ii) each WTO participant that has entered 
                        into an agreement with the United States under 
                        subsection (a) or (b) of section 115;
                            (iii) each WTO participant the share of 
                        total global greenhouse gas emissions of which 
                        is below the de minimis percentage described in 
                        subparagraph (B); and
                            (iv) each WTO participant that the United 
                        Nations has identified as among the least 
                        developed of developing countries.
                    (B) De minimis percentage.--The de minimis 
                percentage referred to in subparagraph (A) is a 
                percentage of total global greenhouse gas emissions of 
                not more than 0.5, as determined by the Commission, for 
                the most recent calendar year for which emissions and 
                other relevant data is available, taking into 
                consideration, as necessary, the annual average 
                deforestation rate during a representative period for a 
                WTO participant that is a developing country.
            (3) Covered list.--
                    (A) In general.--The Secretary, in consultation 
                with the Commission, shall identify and publish in a 
                list, to be known as the ``covered list'', each WTO 
                participant the covered goods of which are subject to 
                the requirements of this section.
                    (B) Requirement.--The covered list shall include 
                each WTO participant that is not included on the 
                excluded list under paragraph (2).
            (4) Presidential authority.--Notwithstanding paragraphs (2) 
        and (3), the President may require the Commission to place a 
        WTO participant on the excluded list or covered list if the 
        President determines such action is necessary to protect 
        essential security interests of the United States.
    (c) Publication of Covered Goods.--The Secretary, in consultation 
with the Commission, shall publish a list of all covered goods of each 
WTO participant on the covered list.
    (d) Written Declarations.--
            (1) In general.--Effective beginning January 1, 2015, a 
        United States importer of any covered good shall, as a 
        condition of the entry of the covered good into the United 
        States, submit to the Secretary and the appropriate office of 
        U.S. Customs and Border Protection a written declaration, with 
        respect to each such entry, that meets the requirements of this 
        subsection.
            (2) Contents.--A written declaration under paragraph (1) 
        shall contain a statement that--
                    (A) the applicable covered good is accompanied by a 
                sufficient number of international reserve allowances, 
                as determined under subsection (e); or
                    (B) the covered good is from a WTO participant on 
                the excluded list under subsection (b)(2).
            (3) Documentation and deposit.--If an importer does not 
        certify that the covered good is a product of a WTO participant 
        on the excluded list under paragraph (2)(B), the written 
        declaration for such good shall include the following 
        supporting documentation and deposit:
                    (A) The name of each WTO participant in which the 
                covered good was manufactured or processed.
                    (B) A brief description of the extent to which the 
                covered good was manufactured or processed in each WTO 
                participant identified under subparagraph (A).
                    (C) An estimation of the number of international 
                reserve allowances that are required for entry of the 
                covered good into the United States under subsection 
                (e).
                    (D) At the election of the importer, the deposit 
                of--
                            (i) international reserve allowances in an 
                        amount equal to the estimated number required 
                        for entry under subparagraph (C); or
                            (ii) a bond, other security, or cash in an 
                        amount that covers the purchase of the 
                        estimated number of international reserve 
                        allowances under subparagraph (C).
            (4) Final assessment.--
                    (A) In general.--Not later than 6 months after 
                submission of the written declaration and entry of the 
                covered good under paragraph (1), the Secretary shall 
                make a final assessment of the international reserve 
                allowance requirement for the covered good under this 
                section. The final assessment shall specify the total 
                number of international reserve allowances that are 
                required for entry of the covered good into the United 
                States and whether the amount of the deposit under 
                paragraph (3)(D) is lower or higher than the final 
                assessment..
                    (B) Reconciliation.--
                            (i) Allowance deposit.--U.S. Customs and 
                        Border Protection shall promptly reconcile the 
                        final assessment with the amount of 
                        international reserve allowances deposited 
                        under paragraph (3)(D)(i). If international 
                        reserve allowances are deposited in an amount 
                        that is more than the final assessment, U.S. 
                        Customs and Border Protection shall refund the 
                        excess amount. If such allowances are deposited 
                        in an amount that is less than final 
                        assessment, the importer shall tender within 14 
                        days sufficient allowances to satisfy fully the 
                        final assessment.
                            (ii) Bond, security, or cash deposit.--If 
                        an importer has submitted a bond, security, or 
                        cash deposit under paragraph (3)(D), U.S. 
                        Customs and Border Protection shall use the 
                        deposit to purchase a sufficient number of 
                        international reserve allowances, as determined 
                        in the final assessment under subparagraph (A). 
                        To the extent that the deposit fails to cover 
                        the purchase of sufficient international 
                        reserve allowances, the importer shall submit 
                        such additional allowances to cover the 
                        shortfall of allowances. To the extent that the 
                        amount of the deposit is more than the amount 
                        of the final assessment, U.S. Customs and 
                        Border Protection shall refund to the importer 
                        the unused portion of the deposit.
            (5) Inclusion.--A written declaration under this subsection 
        shall include the unique serial number of each international 
        reserve allowance associated with the entry of the applicable 
        covered good into the United States.
            (6) Failure to declare.--A covered good that is not 
        accompanied by a written declaration that meets the 
        requirements of this subsection shall not be permitted to be 
        entered into the United States.
            (7) Corrected declaration.--
                    (A) In general.--If, after making a declaration 
                required under this subsection, an importer has reason 
                to believe that the declaration contains information 
                that is not correct, the importer shall provide a 
                corrected declaration by not later than 30 days after 
                the date of discovery of the error, in accordance with 
                subparagraph (B).
                    (B) Method.--A corrected declaration under 
                subparagraph (A) shall be in the form of a letter or 
                other written statement to the Secretary and to the 
                office of U.S. Customs and Border Protection to which 
                the original declaration was submitted.
    (e) Quantity of Allowances Required.--
            (1) Methodology.--
                    (A) In general.--The Secretary shall establish, by 
                rule, a method for calculating the required number of 
                international reserve allowances that a United States 
                importer must submit, together with a written 
                declaration under subsection (d), for each category of 
                covered goods of each covered WTO participant.
                    (B) Formula.--The Secretary shall develop a general 
                formula for calculating the international reserve 
                allowance requirement that applies, on a per unit 
                basis, to each covered good of a covered WTO 
                participant that is imported during each compliance 
                year.
            (2) General formula.--The international allowance reserve 
        requirement, as described in paragraph (1), for a compliance 
        year is equal to the product obtained by multiplying--
                    (A) the national greenhouse gas intensity rate for 
                each category of covered goods of each covered WTO 
                participant for the compliance year, as determined by 
                the Secretary under paragraph (3), by
                    (B) the allowance adjustment factor for the 
                industry sector in the WTO participant that 
                manufactured the covered goods that entered into the 
                United States, as determined by the Secretary under 
                paragraph (4), by
                    (C) the economic adjustment ratio for the WTO 
                participant, as determined by the Commission under 
                paragraph (5).
            (3) National greenhouse gas intensity rate.--The national 
        greenhouse gas intensity rate for a particular WTO participant 
        under paragraph (2)(A), on a per unit basis, shall be equal to 
        the quotient obtained by dividing--
                    (A) the total amount of direct greenhouse gas 
                emissions and indirect greenhouse gas emissions that 
                are attributable to a category of covered goods of a 
                covered WTO participant during the most recent calendar 
                year (as adjusted to exclude those emissions that would 
                not be subject to the allowance submission requirements 
                of section 9913 of the Internal Revenue Code of 1986 or 
                the category of covered goods if manufactured in the 
                United States), by
                    (B) the total number of units of the particular 
                covered good that are produced in the covered WTO 
                participant during the same calendar year.
            (4) Allowance adjustment factor.--
                    (A) General formula.--The allowance adjustment 
                factor for a particular WTO participant under paragraph 
                (2)(B) for a compliance year shall be equal to 1 minus 
                the ratio that--
                            (i) the number of allowances, as determined 
                        by the Secretary under subparagraph (B), that 
                        the entire industry sector in the WTO 
                        participant would have received for that 
                        compliance year at no cost if such allowances 
                        were allocated in the same manner that 
                        allowances are allocated at no cost under 
                        subtitle L of the Internal Revenue Code of 1986 
                        to the same industry sector in the United 
                        States, bears to
                            (ii) the total amount of direct greenhouse 
                        gas emissions and indirect greenhouse gas 
                        emissions that are attributable to a category 
                        of covered goods of the covered WTO participant 
                        during that compliance year.
                    (B) Allowances allocated at no cost..--The number 
                of allowances allocated at no cost under subparagraph 
                (A)(i) shall be equal to the product obtained by 
                multiplying--
                            (i) the baseline emissions level that the 
                        Commission has attributed to a category of 
                        covered goods of the WTO participant, by
                            (ii) the ratio that--
                                    (I) the quantity of allowances that 
                                are allocated at no cost under subtitle 
                                L of the Internal Revenue Code of 1986 
                                to entities within the industry sector 
                                that manufactures the covered goods for 
                                the compliance year during which the 
                                covered goods were entered into the 
                                United States, bears to
                                    (II) the total amount of direct 
                                greenhouse gas emissions and indirect 
                                greenhouse gas emissions of that sector 
                                during a particular compliance year.
            (5) Economic adjustment ratio.--The economic adjustment 
        ratio for a particular WTO participant under paragraph (2)(C) 
        shall be 1 unless the Commission makes an affirmative decision 
        to lower the ratio in order to take into account the extent to 
        which the WTO participant has fully implemented, verified, and 
        enforced the following:
                    (A) The deployment and use of state-of-the-art 
                technologies in industrial processes, equipment 
                manufacturing facilities, power generation and other 
                energy facilities, and consumer goods (such as 
                automobiles and appliances), and implementation of 
                other techniques or actions that have the effect of 
                limiting greenhouse gas emissions in the WTO 
                participant during the relevant period.
                    (B) Any regulatory programs, requirements, and 
                other measures that the WTO participant has implemented 
                to limit greenhouse emissions during the relevant 
                period.
            (6) Annual calculation.--The Secretary shall calculate the 
        international reserve allowance requirements for each 
        compliance year based on the best available information and 
        annually revise the applicable international reserve allowance 
        requirements to reflect changes in the variables of the formula 
        described in this subsection.
            (7) Publication.--Not later than 90 days before the 
        beginning of each compliance year, the Secretary shall publish 
        in the Federal Register a schedule describing the required 
        number of international reserve allowances for each category of 
        imported covered goods of each covered WTO participant, as 
        calculated under this subsection.
            (8) Covered goods from multiple countries.--
                    (A) In general.--The Secretary shall establish, by 
                rule, procedures for determining the number of the 
                international reserve allowances that a United States 
                importer must submit under this subsection for a 
                category of covered goods that are primary products and 
                manufactured or processed in more than one WTO 
                participant. Subject to subparagraph (B), such 
                procedures shall require the importer--
                            (i) to determine for each covered WTO 
                        participant listed in the written declaration, 
                        as required by subsection (d), the number of 
                        international reserve allowances that apply 
                        under paragraph (2) of this subsection to the 
                        category of covered goods that are manufactured 
                        and processed entirely in that covered WTO 
                        participant for the particular compliance year; 
                        and
                            (ii) of the international reserve allowance 
                        requirements identified under clause (i) for 
                        particular covered WTO participants, to apply 
                        the requirement that imposes the highest number 
                        of international reserve allowances for the 
                        category of covered goods.
                    (B) Exception.--The procedures for setting the 
                international reserve allowance requirement under 
                subparagraph (A) shall not apply if the Secretary 
                grants a request by the importer to apply an alternate 
                method for establishing such requirement. The Secretary 
                shall grant such a request only if the importer 
                demonstrates in an administrative hearing by a 
                preponderance of evidence that the alternate method 
                will establish an international reserve allowance 
                requirement that is more representative than the 
                requirement applicable under subparagraph (A).
                    (C) Administrative hearing.--The Secretary shall 
                establish procedures for administrative hearings under 
                subparagraph (B) to ensure that--
                            (i) all evidence submitted by an importer 
                        will be subject to verification by the 
                        Secretary;
                            (ii) domestic manufacturers of the category 
                        of covered goods subject to the administrative 
                        hearing under this paragraph will have an 
                        opportunity to review and comment on evidence 
                        submitted by the importer; and
                            (iii) appropriate penalties will be 
                        assessed in cases where the importer has 
                        submitted information that is false or 
                        misleading.
    (f) Foreign Allowances.--
            (1) Foreign allowances under cap and trade program.--
                    (A) In general.--A United States importer may 
                submit, in lieu of an international reserve allowance 
                issued under this section, a foreign allowance 
                distributed by a WTO participant pursuant to a 
                commensurate cap and trade program.
                    (B) Commensurate cap and trade program.--For 
                purposes of subparagraph (A), a commensurate cap and 
                trade program shall include any greenhouse gas 
                regulatory program adopted by a covered WTO participant 
                to limit the greenhouse gas emissions of the covered 
                WTO participant, if--
                            (i) the Secretary certifies that the 
                        program--
                                    (I)(aa) places a quantitative 
                                limitation on the total quantity of 
                                greenhouse gas emissions of the covered 
                                WTO participant (expressed in terms of 
                                tons emitted per calendar year); and
                                    (bb) achieves that limitation 
                                through an allowance trading system;
                                    (II) satisfies such criteria as the 
                                Secretary may establish for 
                                requirements relating to the 
                                enforceability of the cap and trade 
                                program, including requirements for 
                                monitoring, reporting, verification 
                                procedures, allowance tracking, and 
                                offsets; and
                                    (III) is a comparable action, as 
                                determined by the Commission; or
                            (ii) the program is the result of an 
                        agreement under section 115(b).
            (2) International forest allowances.--A United States 
        importer may submit, in lieu of an international reserve 
        allowance issued under this section, an international forest 
        allowance generated under an agreement to undertake 
        international forest carbon activities under section 115(c).
            (3) Trading of foreign allowances.--Foreign allowances 
        described in paragraphs (1) and (2) may be traded on the carbon 
        market established under subtitle L of the Internal Revenue 
        Code of 1986.
    (g) Retirement of Allowances.--The Secretary shall retire each 
international reserve allowance and foreign allowance submitted to 
achieve compliance with this section.
    (h) Consistency With Trade and Other International Agreements.--The 
Secretary, in consultation with the Secretary of State, shall adjust 
the international reserve allowance requirements established under this 
section (including the quantity of international reserve allowances 
required for each category of covered goods of a covered WTO 
participant) as the Secretary determines to be necessary to ensure that 
the United States complies with all applicable trade agreements and 
other international agreements to which the United States is a party.
    (i) Final Regulations.--Not later than January 1, 2014, the 
Secretary shall promulgate such regulations as the Secretary determines 
to be necessary to carry out this section.

SEC. 112. ADJUSTMENT OF INTERNATIONAL RESERVE ALLOWANCE REQUIREMENTS.

    (a) In General.--Not later than January 1, 2018, and annually 
thereafter, the Commission shall prepare and submit to Congress a 
report that assesses the effectiveness of the applicable international 
reserve allowance requirements under section 111 with respect to--
            (1) covered goods that are entered into the United States 
        from each covered WTO participant; and
            (2) the production of covered goods in covered WTO 
        participants that are incorporated into manufactured goods that 
        subsequently are entered into the United States.
    (b) Inadequate Requirements.--If the Commission determines that an 
applicable international reserve allowance requirement is not adequate 
to achieve the purposes of this title, the Commission, simultaneously 
with the submission of the report under subsection (a), shall make 
recommendations to--
            (1) increase the stringency or otherwise improve the 
        effectiveness of the applicable requirements in a manner that 
        ensures compliance with all applicable trade agreements and 
        other international agreements;
            (2) take action to address greenhouse gas emissions that 
        are attributable to the production of manufactured items for 
        consumption that are not subject to the international reserve 
        allowance requirements under section 111; or
            (3) take such other action as the Commission determines to 
        be necessary to address greenhouse gas emissions that are 
        attributable to the production of covered goods in covered WTO 
        participants, in compliance with all applicable trade 
        agreements and other international agreements.
    (c) Revised Regulations.--The Secretary, in consultation with the 
Commission, shall promulgate revised regulations to implement the 
recommended changes under subsection (b) to improve the effectiveness 
of the international reserve allowance requirements.
    (d) Effective Date.--Any revision made under subsection (c) shall 
take effect on January 1 of the first compliance year beginning after 
the date on which the revision is made.

SEC. 113. INTERNATIONAL CLIMATE CHANGE COMMISSION.

    (a) Establishment.--There is established a commission that shall be 
known as the ``International Climate Change Commission''.
    (b) Organization.--
            (1) Membership.--The Commission shall be composed of 6 
        commissioners who shall be appointed by the President, by and 
        with the advice and consent of the Senate. A person shall not 
        be eligible for appointment as a commissioner unless that 
        person--
                    (A) is a citizen of the United States; and
                    (B) has, in the judgment of the President, the 
                requisite qualifications for developing the knowledge 
                and expertise on international climate change matters 
                that are necessary for performing the duties and 
                functions of the Commission under this title.
            (2) Appointments of commissioners.--Not later than 3 months 
        after date of the enactment of this Act, the President shall 
        appoint the commissioners in accordance with this subsection. 
        If the President fails to appoint one or more of the 
        commissioners under this paragraph by the end of that 3-month 
        period, then--
                    (A) the United States International Trade 
                Commission shall, within the succeeding 3-month period, 
                appoint the remaining commissioners; and
                    (B) the authority of the President to appoint the 
                remaining commissioners terminates.
            (3) Political affiliation.--Not more than 3 of the 
        commissioners serving at any time shall be affiliated with the 
        same political party. In making the appointments, members of 
        different parties shall be appointed alternatively as nearly as 
        may be practicable.
            (4) Term of commissioners; reappointment.--
                    (A) In general.--The term of a commissioner shall 
                be 12 years, except that commissioners first taking 
                office under paragraph (2) shall be appointed to the 
                Commission in a manner that ensures that--
                            (i) the term of not more than 1 member 
                        shall expire during any 2-year period; and
                            (ii) no commissioner serves a term of more 
                        than 12 years.
                    (B) Service until new appointment.--The term of a 
                commissioner shall continue after the expiration of 
                that commissioner's term until the date on which a 
                replacement is appointed by the President and confirmed 
                by the Senate, except that the successor's term begins 
                upon the original expiration of the predecessor's term.
                    (C) Vacancy.--Any commissioner appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the predecessor was appointed shall be appointed 
                for the remainder of the term.
                    (D) Reappointment.--A person who has served as 
                commissioner for more than 7 years shall not be 
                eligible for reappointment.
            (5) Chairperson and vice-chairperson.--
                    (A) In general.--The President shall designate a 
                Chairperson and Vice Chairperson of the Commission from 
                the commissioners that are eligible for designation 
                under subparagraph (B). The Chairperson and Vice-
                Chairperson shall each serve for a term of 4 years. If 
                the President fails to designate the Chairperson for 
                any term, the commissioner with the longest period of 
                continuous service shall serve as Chairperson for that 
                term.
                    (B) Eligibility requirements.--
                            (i) Chairperson.--The President may 
                        designate as the Chairperson of the Commission 
                        for any term any commissioner who is not 
                        affiliated with the political party with which 
                        the Chairperson of the Commission for the 
                        immediately preceding year is affiliated, and 
                        who (except in the case of the first 
                        commissioners) has at least 1 year of 
                        continuous service as a commissioner.
                            (ii) Vice-chairperson.--The President may 
                        designate as the Vice Chairperson of the 
                        Commission for any term any commissioner who is 
                        not affiliated with the political party with 
                        which the Chairperson is affiliated.
            (6) Voting.--
                    (A) In general.--The Commission shall vote on the 
                adoption of each action that is identified in 
                subparagraph (D). Such a vote on a Commission action 
                shall occur at a public meeting of the Commission for 
                which a quorum is present. A majority of commissioners 
                that are in office shall constitute a quorum for a 
                meeting of the Commission.
                    (B) Adoption.--A Commission action identified in 
                subparagraph (D) shall take effect upon adoption by the 
                Commission in accordance with the requirements of this 
                paragraph. Subject to subparagraph (C), the adoption of 
                a Commission action shall occur if a majority of the 
                commissioners in attendance at the meeting (as well as 
                any commissioners voting by proxy) vote in favor of 
                such action.
                    (C) Equally divided votes.--In cases when the 
                commissioners voting are equally divided on whether or 
                not a WTO participant has taken comparable action under 
                section 114, the Commission shall be deemed to have 
                made an affirmative determination that the WTO 
                participant has not taken comparable action.
                    (D) Commission actions.--A Commission action for 
                purposes of this paragraph shall include the 
                performance of the duties specified under subsection 
                (c) and the exercise of the enforcement powers 
                authorized under subsection (d).
    (c) Duties.--The duties of the Commission shall include--
            (1) determinations on whether a WTO participant is taking 
        comparable action under section 114;
            (2) establishment of WTO participant lists under section 
        111(b);
            (3) classification of a category of goods or products as a 
        manufactured item for consumption under section 101(16)(C);
            (4) adjustment of the international reserve allowance 
        requirements pursuant to section 112; and
            (5) performance of other actions that are necessary for the 
        implementation of the provisions of this title.
    (d) Enforcement Powers.--
            (1) Penalty for noncompliance.--The Commission may impose 
        an excess emissions penalty on a United States importer of 
        covered goods if that importer fails to submit the required 
        number of international reserve allowances under section 111. 
        Such penalty for noncompliance shall be equal to the amount of 
        an excess emissions penalty that an owner or operator of a 
        covered facility is required to submit for noncompliance under 
        section 9901 of the Internal Revenue Code of 1986.
            (2) Prohibition on importers.--The Commission may prohibit 
        a United States importer from entering covered goods into the 
        United States for a period not to exceed 5 years if that 
        importer--
                    (A) fails to pay a penalty for noncompliance 
                imposed under paragraph (1); or
                    (B) submits a written declaration under section 
                111(d) that provides false or misleading information 
                for the purpose of circumventing the international 
                reserve requirements of this title.
            (3) Delegation.--The Commission, as appropriate, may 
        delegate to U.S. Customs and Border Protection the enforcement 
        powers that are authorized under this subsection. U.S. Customs 
        and Border Protection shall exercise such enforcement powers in 
        accordance with procedures and requirements that the Commission 
        may establish.

SEC. 114. DETERMINATIONS OF COMPARABLE ACTION.

    (a) Determinations.--
            (1) Annual determinations.--Not later than January 1, 2014, 
        and annually thereafter, the Commission shall determine 
        whether, and the extent to which, each WTO participant that is 
        not exempted under subsection (b) has taken comparable action 
        during the preceding 1-year period to limit the greenhouse gas 
        emissions of the WTO participant, taking into consideration the 
        baseline emissions levels of the WTO participant.
            (2) Basis for determinations.--The Commission shall make a 
        determination on whether a WTO participant has taken comparable 
        action for a particular year under paragraph (1) based on the 
        best available information and in accordance with the following 
        requirements:
                    (A) A WTO participant shall be considered to have 
                taken comparable action if the Commission determines 
                that the percentage change in greenhouse gas emissions 
                in the WTO participant during the relevant period is 
                equal to, or better than, the percentage change in 
                greenhouse emissions in the United States during that 
                same period.
                    (B) In the case of a WTO participant that is not 
                considered to have taken comparable action under 
                subparagraph (A), the Commission shall take into 
                consideration, in making a determination on comparable 
                action for that WTO participant, the extent to which 
                the following actions have been taken, implemented, 
                verified, and enforced:
                            (i) The deployment and use of state-of-the-
                        art technologies in industrial processes, 
                        equipment manufacturing facilities, power 
                        generation and other energy facilities, and 
                        consumer goods (such as automobiles and 
                        appliances), and implementation of other 
                        techniques or actions that have the effect of 
                        limiting greenhouse gas emissions in the WTO 
                        participant during the relevant period.
                            (ii) Any regulatory programs, requirements, 
                        and other measures that the WTO participant has 
                        implemented to limit greenhouse emissions 
                        during the relevant period.
                    (C) If a WTO participant is a party to an 
                international climate change agreement that imposes 
                binding greenhouse gas emissions limitations on the WTO 
                participant, the Commission shall give appropriate 
                credit for net transfers to the WTO participant of 
                greenhouse gas emissions allowances or other units 
                issued with respect to emissions reductions or 
                sequestrations in other WTO participants pursuant to 
                such international agreement.
                    (D) The Commission shall ensure that any 
                determination on comparable action that the Commission 
                makes under this paragraph complies with applicable 
                trade agreements and other international agreements.
    (b) Exemptions.--The Commission shall exempt from a determination 
under subsection (a) in a calendar year any WTO participant that is 
placed on the excluded list pursuant to clause (ii), (iii), or (iv) of 
section 111(b)(2)(A) for that calendar year.
    (c) Reports.--The Commission shall, as expeditiously as 
practicable--
            (1) submit to the President and Congress an annual report 
        describing the determinations of the Commission under 
        subsection (a) for the most recent calendar year; and
            (2) publish the determinations in the Federal Register.
    (d) Reports.--The President shall--
            (1) submit to Congress an annual report describing the 
        determinations of the President under subsection (a) for the 
        most recent calendar year; and
            (2) publish the determinations in the Federal Register.

SEC. 115. INTERNATIONAL AGREEMENTS.

    (a) Negotiating Objective.--
            (1) Statement of policy.--Consistent with the obligations 
        of the United States under the World Trade Organization, it is 
        the policy of the United States to work proactively under the 
        United Nations Framework Convention on Climate Change and in 
        other appropriate forums to establish binding agreements 
        representing comparable action and committing all major 
        greenhouse gas-emitting WTO participants to contribute 
        equitably to the reduction of global greenhouse gas emissions. 
        Any such agreement shall be considered comparable action only 
        if it includes a maximum level on net greenhouse gas emissions 
        into the atmosphere.
            (2) Intent of congress regarding objective.--To the extent 
        that the agreements described in paragraph (1) involve measures 
        that will affect international trade in any good or service, it 
        is the intent of the Congress that the negotiating objective of 
        the United States shall be to focus multilateral and bilateral 
        international agreements on the reduction of greenhouse gas 
        emissions.
            (3) Role of the president.--The President shall be 
        responsible for negotiating agreements under this subsection.
    (b) Premium Carbon Market Access Agreements.--
            (1) Availability.--In negotiations described in subsection 
        (a), the President shall place a high priority on securing 
        agreements that ensure comparable action on the part of WTO 
        participants. In support of this goal, the President shall 
        offer, on a limited basis, WTO participants that are developing 
        countries Premium Carbon Market Access Agreements extending to 
        such a WTO participant access to the carbon market established 
        under subtitle L of the Internal Revenue Code of 1986. Such 
        agreements may also include additional incentives such as the 
        ability to choose the base year or maximum level of allowable 
        greenhouse gas emissions for its emissions trading system, 
        rather than requiring it to match the system as in effect in 
        the United States.
            (2) Conditions.--The President shall determine a global 
        greenhouse gas emissions budget that protects the climate, and 
        the President shall offer Premium Carbon Market Access 
        Agreements under this subsection on a first-come, first-served 
        basis, only to the extent that they, in total, do not allow 
        that global budget to be exceeded. An emissions cap and trading 
        system established in conformance with an agreement entered 
        into under this subsection shall be considered a comparable 
        action for purposes of this Act only if it includes a maximum 
        level on net greenhouse gas emissions into the atmosphere.
    (c) Agreements To Undertake International Forest Carbon 
Activities.--
            (1) In general.--In the case of a WTO participant that is a 
        developing country and is not yet ready to enter a 
        comprehensive agreement under subsection (a) or (b), the 
        President shall attempt to secure an agreement with such WTO 
        participant pursuant to which--
                    (A) the WTO participant agrees to undertake 
                international forest carbon activities, including 
                reducing its rate of deforestation, under the 
                conditions specified in paragraphs (2) and (3); and
                    (B) such international forest carbon activities may 
                qualify for international forest allowances that may be 
                traded on the carbon market established under subtitle 
                L of the Internal Revenue Code of 1986.
            (2) Quality requirements.--The President shall establish 
        requirements for international forest carbon activities that 
        qualify for the creation of international forest allowances 
        under paragraph (1), including--
                    (A) ensuring that qualifying international forest 
                carbon activities are designed, carried out, and 
                managed--
                            (i) in accordance with widely-accepted 
                        environmentally sustainable forestry practices;
                            (ii) to promote native species and 
                        conservation and/or restoration of native 
                        forests, where practicable and to avoid the 
                        introduction of invasive nonnative species; and
                            (iii) to promote fair compensation, public 
                        participation, and the informed consent of 
                        affected local communities and forest dependent 
                        populations; and
                    (B) ensuring that the emission reductions or 
                sequestrations are real, permanent, additional, 
                verifiable, and enforceable, with reliable measuring 
                and monitoring and appropriate accounting for leakage.
            (3) Eligibility criteria.--The President shall establish 
        eligibility criteria for any WTO participant to enter into 
        negotiations for an agreement to undertake international forest 
        carbon activities, including a requirement that such WTO 
        participant has--
                    (A) demonstrated the capacity to participate in 
                international forest carbon activities, based on 
                sufficient accurate and verifiable data on changes in 
                national forest carbon stocks;
                    (B) capped greenhouse gas emissions from 
                deforestation or other land use change or otherwise 
                established a credible national emission reference 
                scenario;
                    (C) commenced an emission reduction program for the 
                forest sector;
                    (D) achieved national-level reductions of 
                deforestation and degradation below a credible 
                reference scenario that are consistent with nationally 
                appropriate mitigation commitments or actions, taking 
                into account the average annual deforestation and 
                degradation rates of the WTO participant during a 
                period of at least 5 consecutive years; and
                    (E) demonstrated those reductions using remote 
                sensing technology, taking into account relevant 
                international standards.
            (4) Definition.--In this subsection, the term 
        ``international forest carbon activities'' means activities in 
        developing countries that are conducted at the national level 
        and are directed at--
                    (A) reducing greenhouse gas emissions produced from 
                deforestation and forest degradation; and
                    (B) increasing sequestration of carbon through 
                restoration of forests, restoration of degraded land 
                that has not been forested prior to restoration, 
                aforestation, using native species where practicable, 
                and improved forest management.

                      TITLE II--REVENUE PROVISIONS

SEC. 201. ISSUING, AUCTIONING, AND ADMINISTERING EMISSIONS ALLOWANCES.

    (a) In General.--The Internal Revenue Code of 1986 is amended by 
adding at the end the following new subtitle:

               ``Subtitle L--Auction Based Carbon Market

                   ``Chapter 101--Emission Allowances

                   ``CHAPTER 101--EMISSION ALLOWANCES

                ``Subchapter A--Excess Emissions Penalty

``Sec. 9901. Excess emissions penalty.

``SEC. 9901. EXCESS EMISSIONS PENALTY.

    ``(a) Imposition of Penalty.--The owner or operator of any covered 
facility that fails for any year to submit to the Secretary, by the 
deadline described in section 9913(a), 1 or more of the emission 
allowances due pursuant to such section shall be liable for the payment 
to the Secretary of an excess emissions penalty on the date of such 
failure.
    ``(b) Amount.--The amount of an excess emissions penalty required 
to be paid under paragraph (1) shall be an amount equal to the product 
obtained by multiplying--
            ``(1) the number of excess emission allowances that the 
        owner or operator failed to submit; and
            ``(2) the greater of--
                    ``(A) $200; or
                    ``(B) 3 times the mean market value (as determined 
                by the Secretary) of an emission allowance during the 
                calendar year for which the emission allowances were 
                due.
    ``(c) Deficiency Procedures Not To Apply.--Subchapter B of chapter 
63 (relating to deficiency procedure for income, estate, gift, and 
certain excise taxes) shall not apply in respect of the assessment or 
collection of any penalty imposed by subsection (a).
    ``(d) Coordination With Other Penalties.--The penalty imposed by 
this section shall be in addition to any other penalty imposed under 
any other provision of law.
    ``(e) Continuing Requirement To Submit Allowances.--The owner or 
operator of a covered facility that fails for any year to submit to the 
Secretary, by the deadline described in section 9913(a), 1 or more of 
the emission allowances due pursuant to that section shall be liable to 
compensate for the shortfall with a submission of excess allowances 
during the following calendar year (or such longer period as the 
Secretary may prescribe).
    ``(f) Joint and Several Liability.--All owners and operators of a 
covered facility shall be jointly and severally liable for the 
compliance obligation under section 9913 with respect to such facility 
and for any penalty imposed under subsection (a) with respect to any 
failure to comply with such obligation.

                 ``Subchapter B--Issuance of Allowances

``Sec. 9911. Emission allowance account.
``Sec. 9912. Auction.
``Sec. 9913. Compliance obligation.
``Sec. 9914. Use of foreign allowances.
``Sec. 9915. Domestic offsets.
``Sec. 9916. Overall limitation on use of offsets.
``Sec. 9917. Authority to modify limitations.

``SEC. 9911. EMISSION ALLOWANCE ACCOUNT.

    ``(a) In General.--There are hereby established a separate quantity 
of emission allowances for each of calendar years 2012 through 2050 as 
determined in accordance with the following table:


----------------------------------------------------------------------------------------------------------------
                                                                              Number of Emission Allowances (in
                              ``Calendar Year                                             Millions)
----------------------------------------------------------------------------------------------------------------
2012                                                                                                      6,351
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2013                                                                                                      6,193
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2014                                                                                                      6.035
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2015                                                                                                      5,877
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2016                                                                                                      5,719
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2017                                                                                                      5,561
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2018                                                                                                      5,403
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2019                                                                                                      5,245
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2020                                                                                                      5,087
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2021                                                                                                      4,929
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2022                                                                                                      4,771
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2023                                                                                                      4,613
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2024                                                                                                      4,455
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2025                                                                                                      4,297
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2026                                                                                                      4,139
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2027                                                                                                      3,981
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2028                                                                                                      3,823
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2029                                                                                                      3,666
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2030                                                                                                      3,508
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2031                                                                                                      3,350
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2032                                                                                                      3,192
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2033                                                                                                      3,034
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2034                                                                                                      2,876
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2035                                                                                                      2,718
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2036                                                                                                      2,560
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2037                                                                                                      2,402
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2038                                                                                                      2,244
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2039                                                                                                      2,086
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2040                                                                                                      1,928
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2041                                                                                                      1,770
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2042                                                                                                      1,612
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2043                                                                                                      1,454
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2044                                                                                                      1,296
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2045                                                                                                      1,138
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2046                                                                                                        980
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2047                                                                                                        822
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2048                                                                                                        664
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2049                                                                                                        506
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
2050                                                                                                        348
----------------------------------------------------------------------------------------------------------------

    ``(b) Borrowing.--If authorized by the Carbon Market Efficiency 
Board, the Secretary may increase the number of emission allowances 
established for any year by making a corresponding reduction in the 
number of emission allowance available in one or more subsequent years. 
Any increase in the number of allowance established for any year under 
this subsection shall not exceed the amount of the increase authorized 
by the Carbon Market Efficiency Board for such year and the 
corresponding reduction with respect to such increase shall be made in 
accordance with such authorization but shall in no event be less than 
such increase.
    ``(c) Serial Numbers.--The Secretary shall assign to each emission 
allowance established under subsection (a) a unique serial number that 
includes the calendar year for which that emission allowance was 
established (after taking into account any borrowing under subsection 
(b)).
    ``(d) Legal Status of Emission Allowances.--
            ``(1) In general.--An emission allowance shall not be a 
        property right.
            ``(2) Termination or limitation.--Nothing in this subtitle 
        or any other provision of law limits the authority of the 
        United States to terminate or limit an emission allowance.
            ``(3) Other provisions unaffected.--Nothing in this 
        subtitle relating to emission allowances shall affect the 
        application of, or compliance with, any other provision of law 
        to or by a covered facility.

``SEC. 9912. AUCTION.

    ``(a) In General.--Except as otherwise provided in this subtitle, 
the Secretary shall conduct auctions of the allowances established 
under section 9911 not later than the close of the calendar year 
preceding the calendar year for which such allowance was established.
    ``(b) Auctions Not Less Frequently Than Annually.--The Secretary 
shall conduct at least one auction under subsection (a) during every 12 
month period.
    ``(c) Allowances Auctioned Not More Than 5 Years in Advance.--The 
Secretary shall not auction an allowance established for any calendar 
year if such calendar year begins more than 5 years after the date of 
the auction.

``SEC. 9913. COMPLIANCE OBLIGATION.

    ``(a) In General.--Not later than 90 days after the end of a 
calendar year, the owner or operator of a covered facility shall submit 
to the Secretary an emission allowance, a foreign allowance, or 
domestic offset allowance for each carbon dioxide equivalent 
attributable to such facility as calculated by the Administrator of the 
Environmental Protection Agency under section 402 of the Climate 
MATTERS Act of 2008.
    ``(b) Retirement of Allowances.--Immediately upon receipt of an 
emission allowance under subsection (a), the Secretary shall retire the 
allowance.
    ``(c) Determination of Compliance.--Not later than July 1 of each 
year, the Secretary shall determine whether the owners and operators of 
all covered facilities are in full compliance with subsection (a) for 
the preceding year.
    ``(d) Reductions in Compliance Obligations.--If the Administrator 
of the Environmental Protection Agency identifies any additional 
reductions in carbon dioxide equivalents by the owner or operator of a 
covered facility under section 402 of the Climate MATTERS Act of 2008, 
the reductions shall reduce the owner or operator's compliance 
obligation under subsection (a).

``SEC. 9914. USE OF FOREIGN ALLOWANCES.

    ``(a) Foreign Allowances Under Cap and Trade Program.--The owner or 
operator of a covered facility may satisfy not more than 15 percent of 
its compliance obligation under section 9913(a) by submitting foreign 
allowances distributed by a WTO participant pursuant to a commensurate 
cap and trade program (as defined in section 111(f)(1)(B) of the 
Climate MATTERS Act of 2008).
    ``(b) International Forest Allowances.--The owner or operator of a 
covered facility may satisfy not more than 15 percent of the allowance 
submission requirement of the covered facility under section 9913(a) by 
submitting an allowance generated under an agreement to undertake 
international forest carbon activities entered into under section 
115(c) of the Climate MATTERS Act of 2008.
    ``(c) Regulations.--Not later than 2 years after the date of 
enactment of this subtitle, the Secretary shall promulgate regulations 
based upon recommendations from the Administrator of the Environmental 
Protection Agency, taking into consideration protocols adopted in 
accordance with the United Nations Framework Convention on Climate 
Change, done at New York on May 9, 1992, approving the use under this 
subtitle of foreign allowances.
    ``(d) Facility Certification.--The owner or operator of a covered 
facility who submits a foreign allowance under this subtitle shall 
certify that the allowance has not been retired from use in the 
registry of the applicable foreign country.
    ``(e) Definitions.--Any term used in this section which is also 
used in title I of the Climate MATTERS Act of 2008 shall have the same 
meaning as when used in such title.

``SEC. 9915. DOMESTIC OFFSETS.

    ``(a) In General.--In addition to any allowances established under 
section 9911, the Secretary shall establish domestic offset allowances 
which, except as otherwise provided in this section, shall be treated 
for purposes of this subtitle in the same manner as emission allowances 
established under section 9911.
    ``(b) Issuance.--The Secretary shall issue domestic offset 
allowances corresponding to the reduction in carbon dioxide equivalents 
created by offset projects described in this subsection as determined 
by the Administrator of the Environmental Protection Agency and 
reported to the Secretary.
    ``(c) Regulations.--Not later than 18 months after the date of 
enactment of this title, the Administrator of the Environmental 
Protection Agency, in consultation with the Secretary of Agriculture, 
shall promulgate regulations establishing the criteria for offset 
projects that qualify for domestic offset allowances in accordance with 
the requirements of this section.
    ``(d) Requirements.--The regulations described in subsection (a) 
shall, at minimum--
            ``(1) authorize the issuance of domestic offset allowances 
        generated through qualifying offset projects within the United 
        States that achieve greenhouse gas emission reductions below, 
        or increases in biological sequestration above, the project 
        baseline;
            ``(2) ensure that such offset credits represent real, 
        verifiable, additional, permanent, and enforceable reductions 
        in greenhouse gas emissions or increases in biological 
        sequestration;
            ``(3) establish procedures for project initiation and 
        approval;
            ``(4) establish procedures for third-party verification of 
        offset allowances; and
            ``(5) provide for the implementation of the requirements of 
        this section.
    ``(e) Periodic Review.--Not later than 5 years after the date of 
enactment of this section, and periodically thereafter, the 
Administrator of the Environmental Protection Agency shall review and 
revise, as necessary, the regulations promulgated under this section.
    ``(f) Eligible Project Types.--
            ``(1) In general.--The types of projects eligible to 
        generate domestic offset allowances under this subtitle shall 
        be limited to projects that--
                    ``(A) reduce greenhouse gas emissions, from 
                agricultural facilities in the United States, resulting 
                from enteric fermentation or manure management and 
                disposal;
                    ``(B) increase biological sequestration of carbon 
                through afforestation or reforestation of acreage in 
                the United States that was not forested as of June 17, 
                2008;
                    ``(C) reduce fugitive greenhouse gas emissions from 
                petroleum and natural gas systems in the United States;
                    ``(D) reduce greenhouse gas emissions from coal 
                mines in the United States; or
                    ``(E) reduce greenhouse gas emissions from the 
                agricultural sector other than those projects specified 
                in subparagraph (A), provided any such offset project 
                types are approved under the National Academy of 
                Sciences review described in subsection (h).
            ``(2) Exclusions.--No domestic offset allowances shall be 
        generated under this section by--
                    ``(A) any reduction of greenhouse gas emissions 
                that are covered by the compliance obligations set 
                forth in section 9913; or
                    ``(B) any activity receiving support under part 4 
                of subtitle B of title II of the Climate MATTERS Act of 
                2008.
    ``(g) Limitation on Use.--The owner or operator of a covered 
facility may satisfy not more than 10 percent if its compliance 
obligation under section 9913(a) by submitting domestic offset 
allowances. Initially, agricultural offset projects subject to National 
Academy of Sciences review under subsection (h) shall be limited to no 
more than 4 percent of this compliance obligation. This amount shall be 
increased or decreased as a result of the National Academy of Sciences 
review, but in no event, shall the owner or operator of a covered 
facility be entitled to satisfy greater than 5 percent of its 
compliance obligation through agricultural offset projects subject to 
National Academy of Sciences review.
    ``(h) National Academy Review of Agricultural Projects.--
            ``(1) In general.--The Secretary shall enter into a 
        contract with the National Academy of Sciences no later than 6 
        months after the date of the enactment of this subsection under 
        which the Academy shall submit to Congress, the Secretary, the 
        Secretary of Agriculture, and the Administrator of the 
        Environmental Protection Agency a report which includes 
        recommendations as to--
                    ``(A) whether certain agricultural projects would, 
                with a high degree of confidence, result in real, 
                verifiable, additional, permanent, and enforceable 
                reductions in greenhouse gas emissions or increases in 
                biological sequestration,
                    ``(B) the specific types of such projects and the 
                specific protocols for ensuring the long-term 
                environmental integrity of reductions in greenhouse gas 
                emissions from such projects
                    ``(C) whether the limitations on use of 
                agricultural projects subject to National Academy of 
                Sciences review should be increased or decreased based 
                on the determinations in (A) and (B), in no event to 
                exceed 5 percent of an owner or operator of a covered 
                facility's total compliance obligation.
            ``(2) Rulemaking on positive recommendations.--If the 
        report required under paragraph (1) finds with a high degree of 
        confidence that certain agricultural projects would result in 
        real, verifiable, additional, permanent, and enforceable 
        reductions in greenhouse gas emissions or increases in 
        biological sequestration, then the Secretary of Agriculture, in 
        collaboration with the Administrator of the Environmental 
        Protection Agency, shall promulgate regulations, based on the 
        specific recommendations of the report, allowing those project 
        types to be eligible to generate offset credits.

``SEC. 9916. OVERALL LIMITATION ON USE OF OFFSETS.

    ``The owner or operator of a covered facility may satisfy not more 
than a total of 25 percent of its compliance obligation under section 
9913(a) by submitting a combination of foreign allowances under section 
9914(a), international forest allowances under section 9914(b), and 
domestic offset allowances under section 9915.

``SEC. 9917. AUTHORITY TO MODIFY LIMITATIONS.

    ``The Secretary may increase or decrease the number of emission 
allowance established for each calendar year under section 9911 and the 
percentages in effect under section 9914(a) and section 9915(c) only to 
the extent authorized by the Carbon Market Efficiency Board consist 
with the requirements of subchapter D and section 9911(b), or as 
recommended by the Administrator of the Environmental Protection Agency 
pursuant to the National Academy of Sciences report consistent with the 
requirements of subchapter E.

                        ``Subchapter C--Trading

``Sec. 9921. Allowance transfer system.
``Sec. 9922. No termination of emission allowances.

``SEC. 9921. ALLOWANCE TRANSFER SYSTEM.

    ``(a) Establishment.--The Secretary shall establish a system for 
issuing, recording, and tracking emission allowances, including the use 
of foreign allowances and domestic offset allowances.
    ``(b) Recording Requirement.--The transfer of an emission allowance 
shall not be effective until such date as a written certification of 
the transfer, signed by a responsible official of each party to the 
transfer, is received and recorded by the Secretary. An emission 
allowance shall not be taken into account under this subtitle with 
respect to any owner or operator of a covered facility unless such 
owner or operator is the recorded holder of such allowance.
    ``(c) Holders Not Restricted.--The privilege of purchasing, 
holding, and transferring emission allowances shall not be restricted 
to the owners and operators of covered facilities.

``SEC. 9922. NO TERMINATION OF EMISSION ALLOWANCES.

    ``An emission allowance may be submitted under section 9913 for the 
year for which it was established or any year thereafter. The passage 
of time shall not, by itself, diminish the compliance value of the 
emission allowance.

             ``Subchapter D--Carbon Market Efficiency Board

``Sec. 9931 Establishment of Carbon Market Efficiency Board.
``Sec. 9932. Duties.
``Sec. 9933. Powers.

``SEC. 9931 ESTABLISHMENT OF CARBON MARKET EFFICIENCY BOARD.

    ``(a) Establishment.--There is established a board, to be known as 
the `Carbon Market Efficiency Board' (referred to in this subtitle as 
the `Board').
    ``(b) Purposes.--The purposes of the Board are--
            ``(1) to promote the achievement of the purposes of the 
        Climate MATTERS Act of 2008;
            ``(2) to observe the national greenhouse gas emission 
        market and evaluate periods during which the cost of emission 
        allowances provided under Federal law might pose substantial 
        harm to the economy; and
            ``(3) to submit to the President and Congress, and publish 
        on the Internet, the reports required under section 9933(c).
    ``(c) Membership.--
            ``(1) Composition.--The Board shall be composed of 7 
        members who are citizens of the United States, to be appointed 
        by the President, by and with the advice and consent of the 
        Senate.
            ``(2) Requirements.--In appointing members of the Board 
        under paragraph (1), the President shall--
                    ``(A) ensure fair representation of the financial, 
                agricultural, industrial, and commercial sectors, and 
                the geographical regions, of the United States, and 
                include a representative of consumer interests;
                    ``(B) appoint not more than 1 member from each such 
                geographical region;
                    ``(C) ensure that not more than 4 members of the 
                Board serving at any time are affiliated with the same 
                political party; and
                    ``(D) ensure that at least 1 member is a scientist 
                with expertise in climate change and the effects of 
                climate change on the environment.
            ``(3) Compensation.--
                    ``(A) In general.--A member of the Board shall be 
                compensated at a rate equal to the daily equivalent of 
                the annual rate of basic pay prescribed for level II of 
                the Executive Schedule under section 5313 of title 5, 
                United States Code, for each day (including travel 
                time) during which the member is engaged in the 
                performance of the duties of the Board.
                    ``(B) Chairperson.--The Chairperson of the Board 
                shall be compensated at a rate equal to the daily 
                equivalent of the annual rate of basic pay prescribed 
                for level I of the Executive Schedule under section 
                5312 of title 5, United States Code, for each day 
                (including travel time) during which the member is 
                engaged in the performance of the duties of the Board.
            ``(4) Prohibitions.--
                    ``(A) Conflicts of interest.--An individual 
                employed by, or holding any official relationship 
                (including any shareholder) with, any entity engaged in 
                the generation, transmission, distribution, or sale of 
                energy, an individual who has any pecuniary interest in 
                the generation, transmission, distribution, or sale of 
                energy, or an individual who has a pecuniary interest 
                in the implementation of Climate MATTERS Act of 2008, 
                shall not be appointed to the Board under this 
                subsection.
                    ``(B) No other employment.--A member of the Board 
                shall not hold any other employment during the term of 
                service of the member.
    ``(d) Term; Vacancies.--
            ``(1) Term.--
                    ``(A) In general.--The term of a member of the 
                Board shall be 14 years, except that the members first 
                appointed to the Board shall be appointed for terms in 
                a manner that ensures that--
                            ``(i) the term of not more than 1 member 
                        shall expire during any 2-year period; and
                            ``(ii) no member serves a term of more than 
                        14 years.
                    ``(B) Oath of office.--A member shall take the oath 
                of office of the Board by not later than 15 days after 
                the date on which the member is appointed under 
                subsection (c)(1).
                    ``(C) Removal.--
                            ``(i) In general.--A member may be removed 
                        from the Board on determination of the 
                        President for cause.
                            ``(ii) Notification.--Not later than 30 
                        days before removing a member from the Board 
                        for cause under clause (i), the President shall 
                        provide to Congress an advance notification of 
                        the determination by the President to remove 
                        the member.
            ``(2) Vacancies.--
                    ``(A) In general.--A vacancy on the Board--
                            ``(i) shall not affect the powers of the 
                        Board; and
                            ``(ii) shall be filled in the same manner 
                        as the original appointment was made.
                    ``(B) Service until new appointment.--A member of 
                the Board the term of whom has expired or otherwise 
                been terminated shall continue to serve until the date 
                on which a replacement is appointed under subparagraph 
                (A)(ii), if the President determines that service to be 
                appropriate.
    ``(e) Chairperson and Vice-Chairperson.--Of members of the Board, 
the President shall appoint--
            ``(1) 1 member to serve as Chairperson of the Board for a 
        term of 4 years; and
            ``(2) 1 member to serve as Vice-Chairperson of the Board 
        for a term of 4 years.
    ``(f) Meetings.--
            ``(1) Initial meeting.--The Board shall hold the initial 
        meeting of the Board as soon as practicable after the date on 
        which all members have been appointed to the Board under 
        subsection (c)(1).
            ``(2) Presiding officer.--A meeting of the Board shall be 
        presided over by--
                    ``(A) the Chairperson;
                    ``(B) in any case in which the Chairperson is 
                absent, the Vice-Chairperson; or
                    ``(C) in any case in which the Chairperson and 
                Vice-Chairperson are absent, a chairperson pro tempore, 
                to be elected by the members of the Board.
            ``(3) Quorum.--Four members of the Board shall constitute a 
        quorum for a meeting of the Board.
            ``(4) Open meetings.--The Board shall be subject to section 
        552b of title 5, United States Code (commonly known as the 
        `Government in the Sunshine Act').
    ``(g) Records.--The Board shall be subject to section 552 of title 
5, United States Code (commonly known as the `Freedom of Information 
Act').
    ``(h) Review by Government Accountability Office.--Not later than 
January 1, 2013, and annually thereafter, the Comptroller General of 
the United States shall conduct a review of the efficacy of the Board 
in fulfilling the purposes and duties of the Board under this 
subchapter.

``SEC. 9932. DUTIES.

    ``(a) Information Gathering.--
            ``(1) Authority.--The Board shall collect and analyze 
        relevant market information to promote a full understanding of 
        the dynamics of the emission allowance market established under 
        this subtitle.
            ``(2) Information.--The Board shall gather such information 
        as the Board determines to be appropriate regarding the status 
        of the market, including information relating to--
                    ``(A) emission allowance allocation and 
                availability;
                    ``(B) the price of emission allowances;
                    ``(C) macro- and micro-economic effects of 
                unexpected substantial increases and decreases in 
                emission allowance prices, or shifts in the emission 
                allowance market, should those increases, decreases, or 
                shifts occur;
                    ``(D) economic effect thresholds that could warrant 
                implementation of cost relief measures described in 
                section 9933;
                    ``(E) in the event any cost relief measures 
                described in section 9933(a) are taken, the effects of 
                those measures on the market;
                    ``(F) maximum levels of cost relief measures that 
                are necessary to achieve avoidance of economic harm and 
                preserve achievement of the purposes of the Climate 
                MATTERS Act of 2008; and
                    ``(G) the success of the market in promoting 
                achievement of the purposes of the Climate MATTERS Act 
                of 2008.
    ``(b) Study.--
            ``(1) In general.--During the 2-year period beginning on 
        the date on which the emission allowance market established 
        under this subtitle begins operation, the Board shall conduct a 
        study of other markets for tradeable permits to emit covered 
        greenhouse gases.
            ``(2) Report.--Not later than 180 days after the beginning 
        of the period described in paragraph (1), the Board shall 
        submit to Congress, and publish on the Internet, a report 
        describing the status of the market, specifically with respect 
        to volatility within the market and the average price of 
        emission allowances during that 180-day period.
    ``(c) Reports.--The Board shall submit to the Secretary and 
Congress quarterly reports--
            ``(1) describing the status of the emission allowance 
        market established under this subtitle, the economic effects of 
        the market, regional, industrial, and consumer responses to the 
        market, energy investment responses to the market, the effects 
        on the market of any fraud on, or manipulation of, the market 
        that the Board has identified, any corrective measures that 
        should be carried out to alleviate identified problems 
        including excessive costs of the market, and plans to 
        compensate for those measures;
            ``(2) including a description of--
                    ``(A) any cost relief measures authorized by the 
                Board under section 9933,
                    ``(B) the actions taken by the Secretary pursuant 
                to such authorizations, and
                    ``(C) the effect of such actions on the long-term 
                functioning of the emission allowance market taking 
                into account any reductions in allowance established 
                for future years as a result of such actions, and
            ``(3) that are prepared independently by the Board, and not 
        in partnership with Federal agencies.

``SEC. 9933. POWERS.

    ``(a) Cost Relief Measures.--
            ``(1) In general.--If the Board determines that the 
        emission allowance market established under this subtitle poses 
        a substantial harm to the economy of the United States, the 
        Board may, in order to ensure functioning, stable, and 
        efficient markets for emission allowances, authorize the 
        Secretary to carry out one or more of the following cost relief 
        measures:
                    ``(A) Increase the percentage limitation applicable 
                under either or both section 9914(a)(1) or (b) on the 
                foreign allowances that the owner or operator of any 
                covered facility may use for any calendar year to 
                satisfy the allowance submission requirement of the 
                covered facility under section 9913(a).
                    ``(B) Increase the percentage limitation applicable 
                under section 9915(c) on the domestic offset allowances 
                that the owner or operator of any covered facility may 
                use for any calendar year to satisfy the allowance 
                submission requirement of the covered facility under 
                section 9913(a).
                    ``(C) Increase the quantity of emission allowances 
                established for any calendar year and make 
                corresponding reductions in the emission allowances 
                established for any subsequent calendar years.
            ``(2) General requirements of authorization.--On 
        determination by the Board to authorize a cost relief measure 
        pursuant to paragraph (1), the Board shall--
                    ``(A) authorize the cost relief measure to be used 
                only during the applicable allocation year; and
                    ``(B) authorize the measure only as needed to avoid 
                substantial economic harm during the applicable 
                allocation year.
            ``(3) Limitation on authorization to increase percentage of 
        permissible allowances.--Any authorization under subparagraph 
        (A), (B), or (C) of paragraph (1) shall specify the maximum 
        number of percentage points that the Secretary is authorized to 
        increase the percentage in effect under section 9914(a)(1) or 
        (b) or 9915(c), respectively.
            ``(4) Limitations on authorization to increase current year 
        emission allowances.--
                    ``(A) In general.--Any authorization under 
                paragraph (1)(D) shall specify the maximum increase in 
                emission allowances that the Secretary is authorized to 
                make for the specified calendar year and the subsequent 
                calendar years in which the Secretary is authorized to 
                make corresponding reductions.
                    ``(B) Maximum increase.--The maximum authorized 
                increase in emission allowances under subparagraph (A) 
                for any calendar year shall not exceed 5 percent of the 
                quantity of emission allowances established for such 
                calendar year without regard to such increase.
                    ``(C) Maximum term for reductions.--The 
                corresponding reductions authorized under subparagraph 
                (A) shall not take into account any calendar years 
                other than the 20 calendar years immediately following 
                the calendar year of the authorized increase.
    ``(c) Limitations.--Nothing in this section gives the Board the 
authority--
            ``(1) to consider or prescribe entity-level petitions for 
        relief from the costs of an emission allowance allocation or 
        trading program established under Federal law;
            ``(2) to carry out any investigative or punitive process 
        under the jurisdiction of any Federal or State court; or
            ``(3) to increase the total quantity of emission allowances 
        issued under this subtitle for the period of calendar years 
        2012 through 2050.

          ``Subchapter E--National Academy of Sciences Review

``Sec. 9941. National Academy of Sciences review.

``SEC. 9941. NATIONAL ACADEMY OF SCIENCES REVIEW.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall offer to enter into a 
contract with the National Academy of Sciences under which the Academy 
shall, not later than January 1, 2012, and every 3 years thereafter, 
submit to Congress, the Carbon Market Efficiency Board, the Secretary, 
and the Administrator of the Environmental Protection Agency a report 
that includes an analysis of--
            ``(1) the latest scientific information and data relevant 
        to global climate change; and
            ``(2) the performance of Climate MATTERS Act of 2008 and 
        the amendments made by such Act and other policies in reducing 
        greenhouse gas emissions and mitigating the adverse impacts of 
        global climate change.
    ``(b) Latest Scientific Information.--The analysis required under 
subsection (a)(1) shall--
            ``(1) address existing reports, including the most recent 
        assessment report of the Intergovernmental Panel on Climate 
        Change; and
            ``(2) include a description of--
                    ``(A) trends in and projections for total United 
                States greenhouse gas emissions;
                    ``(B) trends in and projections for total worldwide 
                greenhouse gas emissions;
                    ``(C) current and projected future atmospheric 
                concentrations of greenhouse gases;
                    ``(D) current and projected future global average 
                temperature, including an analysis of whether an 
                increase of global average temperature in excess of 3.6 
                degrees Fahrenheit (2 degrees Celsius) above the 
                preindustrial average has occurred or is more likely 
                than not to occur in the foreseeable future as a result 
                of anthropogenic climate change;
                    ``(E) current and projected future adverse impacts 
                of global climate change on human populations, 
                wildlife, and natural resources; and
                    ``(F) trends in and projections for the health of 
                the oceans and ocean ecosystems, including predicted 
                changes in ocean acidity, temperatures, the extent of 
                coral reefs, and other indicators of ocean ecosystem 
                health, resulting from anthropogenic carbon dioxide and 
                climate change.
    ``(c) Rulemaking on Recommendations.--Based on the report under 
subsection (a), the Administrator of the Environmental Protection 
Agency shall submit a recommendation to the Secretary for regulatory 
action, and if such regulatory action is within the authority of such 
Secretary, the Secretary shall, not later than 2 years after the 
submission of such recommendation, finalize a rulemaking (after notice 
and comment)--
            ``(1) to carry out such regulatory action; or
            ``(2) to explain the reasons for declining to act.

             ``Subchapter F--Industry Transition Assistance

``Sec. 9951. General allocation and distribution.
``Sec. 9952. Distributing emission allowances to owners and operators 
                            of fossil fuel-fired electric power 
                            generating facilities.
``Sec. 9953. Distributing emission allowances to owners and operators 
                            of energy intensive manufacturing 
                            facilities.

``SEC. 9951. GENERAL ALLOCATION AND DISTRIBUTION.

    ``(a) General Allocation.--Not later than April 1, 2011, and 
annually thereafter through December 31, 2019, the Secretary shall 
allocate percentages of the emission allowance account established for 
the following calendar year as follows:


----------------------------------------------------------------------------------------------------------------
                                          Owners and operators of
           ``Calendar year               fossil fuel-fired electric    Owners and operators of energy intensive
                                        power generating facilities            manufacturing facilities
----------------------------------------------------------------------------------------------------------------
2012 thru 2015.......................  5 percent....................  10 percent
2016.................................  4 percent....................  8 percent
2017.................................  3 percent....................  6 percent
2018.................................   2 percent...................  4 percent
2019.................................  1 percent....................  2 percent
----------------------------------------------------------------------------------------------------------------

    ``(b) General Distribution.--Not later than 1 year after the date 
of enactment of this subtitle, the Secretary shall establish a system 
for distributing to entities identified under subsection (a) the 
emission allowances allocated under that subsection.

``SEC. 9952. DISTRIBUTING EMISSION ALLOWANCES TO OWNERS AND OPERATORS 
              OF FOSSIL FUEL-FIRED ELECTRIC POWER GENERATING 
              FACILITIES.

    ``(a) In General.--As part of the system established under section 
9951(b), the Secretary shall, for each calendar year, distribute to 
fossil fuel-fired electric power generating facilities (including such 
facilities owned or operated by rural electric cooperatives) that were 
operating during the calendar year preceding the year in which this 
subtitle was enacted the emission allowances represented by the 
percentages described in the table contained in section 9951(a) for 
owners and operators of fossil fuel-fired electric power generating 
facilities.
    ``(b) Calculation of Allowances.--The quantity of emission 
allowances distributed to a fossil fuel-fired electric power generating 
facility under subsection (a) shall be equal to the product obtained by 
multiplying--
            ``(1) the quantity of emission allowances available for 
        distribution under subsection (a); and
            ``(2) the quotient obtained by dividing--
                    ``(A) the annual average quantity of carbon dioxide 
                equivalents emitted by the facility during the 3 
                calendar years preceding the date of enactment of this 
                subtitle; by
                    ``(B) the annual average of the aggregate quantity 
                of carbon dioxide equivalents emitted by all fossil 
                fuel-fired electric power generating facilities during 
                those 3 calendar years.

``SEC. 9953. DISTRIBUTING EMISSION ALLOWANCES TO OWNERS AND OPERATORS 
              OF ENERGY INTENSIVE MANUFACTURING FACILITIES.

    ``(a) Definitions.--In this section:
            ``(1) Currently operating facility.--The term `currently 
        operating facility' means an eligible manufacturing facility 
        that had significant operations during the calendar year 
        preceding the calendar year for which emission allowances are 
        being distributed under this section.
            ``(2) Eligible manufacturing facility.--
                    ``(A) In general.--The term `eligible manufacturing 
                facility' means a manufacturing facility located in the 
                United States that principally manufactures iron, 
                steel, aluminum, pulp, paper, cement, chemicals, or 
                such other products as the Secretary, after 
                consultation with the Administrator of the 
                Environmental Protection Agency, may determine are 
                likely to be significantly disadvantaged in competitive 
                international markets as a result of indirect costs of 
                the program established under this subtitle.
                    ``(B) Exclusion.--The term `eligible manufacturing 
                facility' does not include a facility eligible to 
                receive emission allowances under section 9952.
            ``(3) Indirect carbon dioxide emissions.--The term 
        `indirect carbon dioxide emissions' means the product obtained 
        by multiplying (as determined by the Administrator of the 
        Environmental Protection Agency)--
                    ``(A) the quantity of electricity consumption at an 
                eligible manufacturing facility; and
                    ``(B) the rate of carbon dioxide emission per 
                kilowatt-hour output for the region in which the 
                manufacturer is located.
            ``(4) New entrant manufacturing facility.--The term `new 
        entrant manufacturing facility', with respect to a calendar 
        year, means an eligible manufacturing facility that began 
        operation during or after the calendar year for which emission 
        allowances are being distributed under this section.
    ``(b) Total Allocation for Currently Operating Facilities.--As part 
of the system established under section 9951(b), the Secretary shall, 
for each calendar year, distribute 96 percent of the total quantity of 
emission allowances available for allocation to energy-intensive 
manufacturing under section 9951(a) to currently operating facilities.
    ``(c) Total Allocation for Currently Operating Facilities in Each 
Category of Manufacturing Facilities.--The quantity of emission 
allowances distributed by the Secretary for a calendar year to 
facilities in each category of currently operating facilities shall be 
equal to the product obtained by multiplying--
            ``(1) the total quantity of emission allowances available 
        for allocation under subsection (b); and
            ``(2) the ratio that (during the calendar year preceding 
        the calendar year for which emission allowances are being 
        distributed under this section)--
                    ``(A) the sum of the direct and indirect carbon 
                dioxide emissions by currently operating facilities in 
                the category; bears to
                    ``(B) the sum of the direct and indirect carbon 
                dioxide emissions by all currently operating 
                facilities.
    ``(d) Individual Allocations to Currently Operating Facilities.--
The quantity of emission allowances distributed by the Secretary for a 
calendar year to a currently operating facility shall be a quantity 
equal to the product obtained by multiplying--
            ``(1) the total quantity of emission allowances available 
        for allocation to currently-operating facilities in the 
        appropriate category, as determined under subsection (c); and
            ``(2) the ratio that (during the 3 calendar years preceding 
        the year for which the allocation rule is promulgated for the 
        allocation period)--
                    ``(A) the average number of production employees 
                employed at the facility; bears to
                    ``(B) the average number of production employees 
                employed at all existing eligible manufacturing 
                facilities in the appropriate category.
    ``(e) New Entrant Manufacturing Facilities.--
            ``(1) In general.--As part of the system established under 
        section 9951(b), the Secretary shall, for each calendar year, 
        distribute 4 percent of the total quantity of emission 
        allowances available for allocation to carbon intensive 
        manufacturing under section 9951(a) to new entrant 
        manufacturing facilities.
            ``(2) Individual allocations.--The quantity of emission 
        allowances distributed by the Secretary for a calendar year to 
        a new entrant manufacturing facility shall be proportional to 
        the product obtained by multiplying--
                    ``(A) the average number of production employees 
                employed at the new entrant manufacturing facility 
                during the prior calendar year; and
                    ``(B) the rate (in emission allowances per 
                production employee) at which emission allowances were 
                allocated to currently operating facilities in the 
                appropriate category for the calendar year, as 
                determined under subsection (d).

                      ``Subchapter G--Definitions

``Sec. 9961. Definitions.

``SEC. 9961. DEFINITIONS.

    ``For purposes of this subtitle--
            ``(1) Carbon dioxide equivalent.--The term `carbon dioxide 
        equivalent' means, for each greenhouse gas, the quantity of the 
        greenhouse gas that the Administrator of the Environmental 
        Protection Agency, determines makes the same contribution to 
        global warming as 1 metric ton of carbon dioxide.
            ``(2) Covered facility.--The term `covered facility' 
        means--
                    ``(A) any facility that uses more than 5,000 tons 
                of coal in a calendar year;
                    ``(B) any facility that is a natural gas processing 
                plant or that produces natural gas in the State of 
                Alaska, or any entity that imports natural gas 
                (including liquefied natural gas);
                    ``(C) any facility that in any year produces, or 
                any entity that in any year imports, petroleum- or 
                coal-based liquid or gaseous fuel, the combustion of 
                which will emit a greenhouse gas, assuming no capture 
                and sequestration of that gas;
                    ``(D) any facility that in any year produces for 
                sale or distribution, or any entity that in any year 
                imports, more than 10,000 carbon dioxide equivalents of 
                chemicals that are greenhouse gas, assuming no capture 
                and destruction or sequestration of that gas; or
                    ``(E) any facility that in any year emits as a 
                byproduct of the production of hydrochlorofluorocarbons 
                more than 10,000 carbon dioxide equivalents of 
                hydrofluorocarbons.
            ``(3) Destruction.--The term `destruction' means the 
        conversion of a greenhouse gas by thermal, chemical, or other 
        means--
                    ``(A) to another gas with a low- or zero-global 
                warming potential; and
                    ``(B) for which credit given reflects the extent of 
                reduction in global warming potential actually 
                achieved.
            ``(4) Emission allowance.--The term `emission allowance' 
        means an authorization to emit 1 carbon dioxide equivalent.
            ``(5) Emission allowance account.--The term `Emission 
        Allowance Account' means the aggregate of emission allowances 
        established under section 9911 for the calendar year.
            ``(6) Facility.--The term `facility' means--
                    ``(A) 1 or more buildings, structures, or 
                installations located on 1 or more contiguous or 
                adjacent properties of an entity in the United States; 
                and
                    ``(B) at the option of the Secretary, after 
                consultation with the Administrator of the 
                Environmental Protection Agency, any activity or 
                operation that--
                            ``(i) emits 10,000 carbon dioxide 
                        equivalents in any year; and
                            ``(ii) has a technical connection with the 
                        activities carried out at a facility, such as 
                        use of transportation fleets, pipelines, 
                        transmission lines, and distribution lines, but 
                        that is not conducted or located on the 
                        property of the facility.
            ``(7) Greenhouse gas.--The term `greenhouse gas' means any 
        of--
                    ``(A) carbon dioxide;
                    ``(B) methane;
                    ``(C) nitrous oxide;
                    ``(D) sulfur hexafluoride;
                    ``(E) a perfluorocarbon;
                    ``(F) a hydrofluorocarbon; or
                    ``(G) any other anthropogenically-emitted gas that 
                is determined by the Administrator of the Environmental 
                Protection Agency to contribute to global warming to a 
                non-negligible degree.
            ``(8) Retire an emission allowance.--The term `retire an 
        emission allowance' means to disqualify an emission allowance 
        for any subsequent use, regardless of whether the use is a 
        sale, exchange, or submission of the allowance in satisfying a 
        compliance obligation.
            ``(9) Sequestered and sequestration.--The terms 
        `sequestered' and `sequestration' mean the capture, permanent 
        separation, isolation, or removal of greenhouse gases from the 
        atmosphere, as determined by the Administrator of the 
        Environmental Protection Agency.''.
    (b) Clerical Amendment.--The table of subtitles of such Code is 
amended by adding at the end the following new item:

                Subtitle L. Auction Based Carbon Market.

    TITLE III--CITIZEN PROTECTION AND DEFICIT REDUCTION TRUST FUNDS

                Subtitle A--Establishment of Trust Funds

SEC. 301. ESTABLISHMENT OF CITIZEN PROTECTION AND DEFICIT REDUCTION 
              TRUST FUNDS.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
sections:

``SEC. 9511. DEFICIT REDUCTION TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Deficit Reduction 
Trust Fund', consisting of such amounts as may be appropriated or 
credited to the Deficit Reduction Trust Fund as provided in this 
section or section 9602(b).
    ``(b) Transfers to Deficit Reduction Trust Fund.--There are hereby 
appropriated to the Deficit Reduction Trust Fund amounts equivalent to 
15 percent of--
            ``(1) the amounts received pursuant to auction of 
        allowances under section 9912, and
            ``(2) the amounts received as penalties under section 9901.
    ``(c) Expenditures.--Amounts in the Deficit Reduction Trust Fund 
shall be available as provided in appropriation Acts only for the 
purpose of reducing the Federal debt.

``SEC. 9512. CITIZEN PROTECTION TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Citizen 
Protection Trust Fund', consisting of such amounts as may be 
appropriated or credited to the Citizen Protection Trust Fund as 
provided in this section or section 9602(b).
    ``(b) Transfers to Citizen Protection Trust Fund.--There are hereby 
appropriated to the Citizen Protection Trust Fund amounts equivalent to 
85 percent of--
            ``(1) the amounts received pursuant to auction of 
        allowances under section 9912, and
            ``(2) the amounts received as penalties under section 9901.
    ``(c) Creation of Accounts.--There is established in the Citizen 
Protection Trust Fund each of the separate accounts referred to in the 
table contained in subsection (d)(1). Each such account shall consist 
of such amounts as may be transferred or credited to such account.
    ``(d) Transfers to Accounts.--
            ``(1) In general.--Any amount appropriated or credited to 
        the Citizen Protection Trust Fund shall be transferred by the 
        Secretary to the accounts in such fund in accordance with the 
        ratio (expressed as percentages) contained in the following 
        table:


----------------------------------------------------------------------------------------------------------------
                   ``In the case of the:                           The following percentage of such amount:
----------------------------------------------------------------------------------------------------------------
Consumer Assistance Account................................  54 percent
Investment in Natural Resource Adaptation Account..........  7 percent
Early Action Account.......................................  1 percent
State and Tribal Action Account............................  2.7 percent
International Adaptation Account...........................  3.5 percent
International Technology Assistance Account................  3.5 percent
Transition Assistance for Workers Account..................  4 percent
Domestic Agriculture and Forestry Account..................  3 percent
Education Account..........................................  0.4 percent
International Forestry Account.............................  4.4 percent
Energy Efficiency Account..................................  7.5 percent
Transportation Alternatives Account........................  2 percent
Green Energy Research Account..............................  7 percent
----------------------------------------------------------------------------------------------------------------

            ``(2) Phaseout of transfers to early action account.--
                    ``(A) In general.--In the case of any amount 
                appropriated or credited after 2012--
                            ``(i) the percentage specified in the table 
                        contained in paragraph (1) with respect to the 
                        Early Action Account, shall be decreased by the 
                        applicable number of percentage points, and
                            ``(ii) such percentage of such amount shall 
                        be transferred to the Consumer Assistance 
                        Account and shall be available, without further 
                        appropriation or fiscal year limitation, only 
                        for the healthy families fund described in 
                        section 313 of the Climate MATTERS Act of 2008.
                    ``(B) Applicable number of percentage points.--With 
                respect to any amount appropriated or credited in any 
                calendar year, the applicable number of percentage 
                points is the number determined in accordance with the 
                following table:


----------------------------------------------------------------------------------------------------------------
       ``In the case of calendar year:                   The applicable number of percentage points is:
----------------------------------------------------------------------------------------------------------------
2013.........................................  0.33
2014.........................................  0.66
2015 and thereafter..........................  1
----------------------------------------------------------------------------------------------------------------

    ``(e) Expenditures From Citizen Protection Trust Fund.--
            ``(1) Consumer assistance account.--Amounts in the Consumer 
        Assistance Account shall be available, without further 
        appropriation or fiscal year limitation, only for carrying out 
        the programs established under part 1 of subtitle B of title 
        III of the Climate MATTERS Act of 2008.
            ``(2) Investment in natural resource adaptation account.--
        Amounts in the Investment in Natural Resource Adaptation 
        Account shall be available, without further appropriation or 
        fiscal year limitation, only for carrying out the program 
        established under part 2 of subtitle B of title III of the 
        Climate MATTERS Act of 2008.
            ``(3) Early action account.--Amounts in the Early Action 
        Account shall be available, without further appropriation or 
        fiscal year limitation, only for carrying out the program 
        established under part 3 of subtitle B of title III of the 
        Climate MATTERS Act of 2008.
            ``(4) State and tribal action account.--Amounts in the 
        State and Tribal Action Account shall be available, without 
        further appropriation or fiscal year limitation, only for 
        carrying out the program established under part 4 of subtitle B 
        of title III of the Climate MATTERS Act of 2008. Funds received 
        under this section shall supplement existing programs and not 
        be in place thereof.
            ``(5) International adaptation account.--Amounts in the 
        International Adaptation Account shall be available, without 
        further appropriation or fiscal year limitation, only to the 
        Administrator of USAID to carry out a Climate Change Adaptation 
        and Response Program for the most vulnerable developing 
        countries to cope with climate change impacts while encouraging 
        engagement of local communities.
            ``(6) International technology assistance account.--
                    ``(A) Amounts in the International Technology 
                Assistance Account shall be available, without further 
                appropriation or fiscal year limitation, only to the 
                Secretary of State to provide technology assistance to 
                qualified developing nations to provide incremental 
                financial support to accelerate the deployment of low 
                carbon technologies.
                    ``(B) For purposes of this paragraph--
                            ``(i) The term `low carbon technology' 
                        means technologies to produce energy from 
                        renewable energy, to reduce energy demand 
                        through energy efficiency, or to capture and 
                        store carbon emissions from fossil fuels.
                            ``(ii) Qualified developing countries are 
                        those the Secretary of State determines will 
                        take nationally appropriate actions that will 
                        result in significant, verifiable reduction of 
                        greenhouse gas emissions.
                            ``(iii) Incremental financial support means 
                        providing partial funding for deployment of 
                        technologies that would not be deployed within 
                        a reasonable time without the added support.
            ``(7) Transition assistance for workers account.--Amounts 
        in the Transition Assistance for Workers Account shall be 
        available in equal amounts, without further appropriation or 
        fiscal year limitation, only--
                    ``(A) to the Secretary of Labor to provide 
                transition assistance to dislocated workers and 
                communities, including grants to employers, employer 
                associations, and representatives of employees, 
                adjustment assistance, employment services to 
                dislocated workers, income-maintenance and needs-
                related payments to dislocated workers, and grants to 
                State and local governments to assist communities in 
                attracting new employers or providing essential local 
                government services, and
                    ``(B) to the Secretary of Labor to supplement 
                existing funding for the Energy Efficiency and 
                Renewable Energy Worker Training Program established 
                under section 171(e) of the Workforce Investment Act of 
                1998.
            ``(8) Domestic agriculture and forestry account.--Amounts 
        in the Domestic Agriculture and Forestry Account shall be 
        available, without further appropriation or fiscal year 
        limitation, only for carrying out the program established under 
        part 5 of subtitle B of title III of the Climate MATTERS Act of 
        2008.
            ``(9) International forestry account.--Amounts in the 
        International Forestry Account shall be available, without 
        further appropriation or fiscal year limitation, only for 
        carrying out the program established under part 6 of subtitle B 
        of title III of the Climate MATTERS Act of 2008.
            ``(10) Energy efficiency account.--Amounts in the Energy 
        Efficiency Account shall be available, without further 
        appropriation or fiscal year limitation, only for carrying out 
        the program established under part 7 of subtitle B of title III 
        of the Climate MATTERS Act of 2008.
            ``(11) Education account.--Amounts in the Education Account 
        shall be available, without further appropriation or fiscal 
        year limitation, only for environmental education as follows:
                    ``(A) 33.3 percent to the Environmental Protection 
                Agency;
                    ``(B) 33.3 percent to the Department of Commerce 
                for initiatives under the National Oceanic and 
                Atmospheric Administration; and
                    ``(C) 33.3 percent to the Secretary of Education.
            ``(12) Transportation alternatives account.--Amounts in the 
        Transportation Alternatives Account shall be available, without 
        further appropriation or fiscal year limitation, only for 
        carrying out the program established under part 8 of subtitle B 
        of title III of the Climate MATTERS Act of 2008.
            ``(13) Green energy research account.--Amounts in the Green 
        Energy Research Account shall be available, without further 
        appropriation or fiscal year limitation, only as follows:
                    ``(A) 50 percent for tax credits for basic 
                renewable energy technology research.
                    ``(B) 25 percent to the National Science Foundation 
                for basic renewable energy technology research.
                    ``(C) 25 percent to the Department of Energy for 
                basic renewable energy technology research.
        For purposes of this paragraph, the term `basic renewable 
        energy technology research' means any original investigation 
        conducted in the United States for the advancement of 
        scientific knowledge in renewable energy technology not having 
        a specific commercial objective.
            ``(14) Carbon market efficiency board.--Amounts in the 
        Citizen Protection Trust Fund shall be available, as provided 
        by appropriation Acts, to the Carbon Market Efficiency Board to 
        pay the expenses of such Board and salaries of members and 
        employees of such Board. Any amounts made available under this 
        paragraph shall be treated for purposes of paragraph (1) as 
        amounts not appropriated or credited to the Citizen Protection 
        Trust Fund.
    ``(f) Limitation on Transfers to the Citizen Protection Trust 
Fund.--No amount may be appropriated to the Citizen Protection Trust 
Fund on and after the date of any expenditure from the Citizen 
Protection Trust Fund which is not permitted by this section. The 
determination of whether an expenditure is so permitted shall be made 
without regard to--
            ``(1) any provision of law which is not contained or 
        referenced in this title or in a revenue Act, and
            ``(2) whether such provision of law is a subsequently 
        enacted provision or directly or indirectly seeks to waive the 
        application of this paragraph.''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 98 of such Code is amended by adding at the end the following 
new items:

``Sec. 9511. Deficit reduction trust fund.
``Sec. 9512. Citizen protection trust fund.''.

                Subtitle B--Citizen Protection Programs

SEC. 310. DEFINITIONS.

    Except as otherwise provided in this subtitle, any term used in 
this subtitle which is also used in subtitle L of the Internal Revenue 
Code of 1986 shall have the meaning given such term for purposes of 
such subtitle L.

                      PART 1--CONSUMER ASSISTANCE

SEC. 311. ALLOCATION OF ACCOUNT FUNDS.

    The amounts made available annually to carry out this part shall be 
allocated as follows:
            (1) 16 percent to carry out the climate change rebate 
        program established under section 312,
            (2) 18 percent for tax relief for low- and moderate-income 
        households to mitigate any increased costs due to the 
        regulation of greenhouse gases as provided by this Act (and the 
        amendments made by this Act), and
            (3) 66 percent for the health families fund described in 
        section 313.

SEC. 312. CLIMATE CHANGE REBATE PROGRAM.

    (a) In General.--The Secretary shall formulate and administer the 
Climate Change Rebate Program consistent with the provisions of this 
section. At the request of the State agency, eligible low-income 
households within the State shall be provided an opportunity to receive 
compensation, through the issuance of a monthly rebate, for the loss in 
purchasing power resulting from this Act.
    (b) Eligibility.--Participation in the Climate Change Rebate 
Program shall be limited to households that--
            (1) the State agency determines to be participating in the 
        Food Stamp Program (7 U.S.C. 2011 et seq.) or the Food 
        Distribution Program on Indian Reservations (7 U.S.C. 2013(b));
            (2) meet the gross income standard described in section 
        5(c)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2014(c)(2)), 
        including households that include an elderly or disabled 
        member, and the financial resources limit in effect in the 
        State for such households under the Food Stamp Act of 1977 (7 
        U.S.C. 2014(g));
            (3) consist of a single individual or a married couple who 
        receive the subsidy described in section 1860D-14 of the Social 
        Security Act (42 U.S.C. 1395w-114); or
            (4) consist of a single individual or a married couple who 
        participate in the program under section XVIII of the Social 
        Security Act and who meet the income requirements described in 
        section 1860D-14(a)(1) or (a)(2) and the resource requirements 
        described in Section 1860D-14(a)(3)(D) and (a)(3)(E).
            (5) Limitation.--The Secretary shall establish procedures 
        to ensure that--
                    (A) individuals in households that qualify for the 
                rebate under paragraph (2) or paragraph (4) and that do 
                not participate in the Food Stamp Program or Medicare 
                are U.S. citizens, U.S. nationals, or lawfully residing 
                immigrants; and
                    (B) households do not receive more than one rebate 
                per month.
    (c) Rebate Calculation.--
            (1) In general.--The climate change rebate amount shall be 
        the average annual reduction in purchasing power for low-income 
        households of a given size that results from the regulation of 
        greenhouse gas emissions under this Act and any other provision 
        of law. The Energy Information Administration, in consultation 
        with other appropriate federal agencies, shall calculate the 
        climate change rebate amount by August 31 of each year for the 
        following calendar year using the most recent, reliable data 
        available, and report such amount to the Secretary.
            (2) Rebate calculation.--
                    (A) Distribution.--For each calendar year, the 
                Energy Information Administration shall determine and 
                the Secretary shall distribute amounts available under 
                this section among U.S. households, based on--
                            (i) households' share of total consumption 
                        by all households;
                            (ii) the carbon intensity (and covered-
                        emissions intensity) of households' 
                        consumption; and
                            (iii) the share of households' consumption 
                        that is not financed by federal benefits 
                        subject to a cost of living adjustment.
                    (B) Climate change rebate.--The climate change 
                rebate amount shall be equal to the arithmetic mean 
                value of the amount allocated under paragraph (1) to 
                households of a specified household size in the bottom 
                income quintile.
                    (C) Income quintiles.--Income quintiles shall be 
                determined by ranking households according to income 
                adjusted for household size, and shall be constructed 
                so that each quintile contains an equal number of 
                people.
                    (D) Household size.--The climate change rebate 
                amount shall be calculated for each of the household 
                sizes specified in paragraph (d)(2).
    (d) Monthly Rebate Amount.--
            (1) Maximum monthly rebate.--The maximum monthly rebate 
        under this subsection for each household size shall be equal to 
        the annual climate change rebate amount calculated under 
        subsection (c) for that household size, divided by 12 and 
        rounded to the nearest whole dollar amount.
            (2) Household sizes.--Households shall receive a rebate 
        based on the number of individuals in the household, except 
        that households of five or more members shall receive the same 
        rebate amount based on calculations under subsection (c) for 
        households with five or more members.
            (3) Gross income.--
                    (A) Eligible households shall receive a monthly 
                rebate based on the gross income of the household.
                    (B) A households with a gross income that is less 
                than or equal to 50 percent of the poverty line shall 
                receive the maximum monthly rebate.
                    (C) A household with a gross income that is greater 
                than 50 percent of the poverty line and less than or 
                equal to 130 percent of the poverty line shall receive 
                monthly rebates in amounts established in accordance 
                with such schedule as shall be determined by the 
                Secretary, provided that--
                            (i) for each household size, the schedule 
                        provides that the amount of the monthly rebate 
                        shall be reduced for each dollar that gross 
                        income of a household exceeds 50 percent of the 
                        poverty line (referred to in this clause as the 
                        ``phase down rate'');
                            (ii) the phase down rate is equal to the 
                        quotient obtained by dividing--
                                    (I) the maximum monthly rebate 
                                amount; by
                                    (II) the difference between 130 
                                percent of the poverty line and 50 
                                percent of the poverty line calculated 
                                on a monthly basis for each household 
                                size;
                            (iii) the Secretary establishes a 
                        methodology for use in establishing the phase 
                        down rate for households of 5 or more 
                        individuals.
                    (D) A household with a gross income that is greater 
                than 130 percent of the poverty line shall not be 
                eligible for a monthly rebate under this paragraph.
            (4) Special rule for certain households.--Notwithstanding 
        paragraph (3), households with 1 or 2 members that include at 
        least one elderly or disabled member shall receive the maximum 
        monthly rebate for the size of their household.
    (e) Delivery Mechanism.--
            (1) Subject to standards and an implementation schedule set 
        by the Secretary, the state agency shall provide the rebate in 
        monthly installments via the State's Electronic Benefit 
        Transfer System or direct deposit into the eligible households 
        designated bank account.
            (2) Such standards shall include--
                    (A) Defining the required level of recipient 
                protection regarding privacy, ease of use and access to 
                the rebate, including the prohibition of fees changed 
                to recipients for withdrawals; and
                    (B) Operating standards that provide for 
                interoperability between states and law enforcement 
                monitoring.
    (f) Administration.--
            (1) In general.--The State agency of each participating 
        State shall assume responsibility for the certification of 
        applicant households and for the issuance of rebates and the 
        control and accountability thereof.
            (2) Administrative costs.--
                    (A) Subject to standards established by the 
                Secretary, the Secretary is authorized to reimburse 
                each State agency for a portion, as described in (B) 
                and (C) of the administrative costs involved in each 
                agency's operation of the Climate Change Rebate 
                Program.
                    (B) For the first three years of the Climate Change 
                Rebate Program, the State agency will be reimbursed 
                for:
                            (i) 75 percent of the administrative costs 
                        of determining eligibility for and delivering 
                        the climate rebate; and
                            (ii) 90 percent of any automated data 
                        processing improvements or Electronic Benefit 
                        Transfer contract amendments necessary to 
                        provide the Climate Change Rebate.
                    (C) Beginning in the fourth year of this program, 
                states will be reimbursed for 50 percent of all 
                administrative costs of the rebate.
    (g) Treatment.--The value of the rebate provided under this Act 
shall not be considered income or resources for any purpose under any 
Federal, State, or local laws, including, but not limited to, laws 
relating to an income tax, public assistance programs (such as health 
care, cash aid, child care, nutrition programs, and housing assistance) 
and no participating State or political subdivision thereof shall 
decrease any assistance otherwise provided an individual or individuals 
because of the receipt of benefits under this Act.
    (h) Definitions.--
            (1) Elderly or disabled member.--The term ``elderly or 
        disabled member'' includes individuals who meet the definition 
        of the term in section 3 of the Food Stamp Act (7 U.S.C. 2012) 
        or receive benefits under Section 1860(D)-14 of the Social 
        Security Act (42 U.S.C. 1395w-114).
            (2) Electronic benefit transfer.--The term ``electronic 
        benefit transfer'' means a system by which household benefits 
        defined under subsection (d) are issued from and stored in a 
        central databank via electronic benefit transfer cards.
            (3) Gross income.--The term ``gross income'' means the 
        gross income of a household that is determined in accordance 
        with standards and procedures established under section 5 of 
        the Food Stamp Act of 1977 (7 U.S.C. 2014).
            (4) Household.--
                    (A) In general.--The term ``household'' means an 
                individual who lives alone or a group of individuals 
                who live together.
                    (B) Exceptions.--Notwithstanding subparagraph (A)--
                            (i) an individual or a group of individuals 
                        who are a household under the Food Stamp Act of 
                        1977 (7 U.S.C. 2012) shall be considered a 
                        household;
                            (ii) a single individual or married couple 
                        that receive benefits under section 1860D-14 of 
                        the Social Security Act (42 U.S.C. 1395w-114) 
                        shall be considered a household;
                            (iii) notwithstanding subsection (b)(5)(b), 
                        the Secretary shall establish rules for 
                        providing the Climate Change Rebate in an 
                        equitable and administratively simple manner to 
                        ``mixed households'' where the group of 
                        individuals who live together includes a 
                        combination of members described in clause (i) 
                        and clause (ii), or includes additional members 
                        not described in clause (i) or clause (ii).
            (5) Poverty line.--The term ``poverty line'' has the 
        meaning given the term in section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2)), including any 
        revision required by that section.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury, or his designee.
            (7) State.--The term ``State'' means the fifty States, the 
        District of Columbia, the Commonwealth of Puerto Rico, American 
        Samoa, the U.S. Virgin Islands, Guam, and the Commonwealth of 
        the Northern Mariana Islands.
            (8) State agency.--The term ``State agency'' means an 
        agency of State government, including the local offices 
        thereof, that has responsibility for administration of the 1 or 
        more federally aided public assistance programs within the 
        State, and in those States where such assistance programs are 
        operated on a decentralized basis, the term shall include the 
        counterpart local agencies administering such programs.

SEC. 313. HEALTHY FAMILIES FUND.

    (a) In General.--Amounts made available for the healthy families 
fund shall be used only to carry out a program which is established by 
subsequent legislation to assist households with the costs of obtaining 
and maintaining healthcare coverage and which is consistent with the 
principles described in subsection (b).
    (b) Principles of Healthy Families Fund.--A program shall be 
treated as described in this section only if such program is consistent 
with the following principles:
            (1) Advances comprehensive, high quality, affordable 
        healthcare coverage for all.
            (2) Ensures premiums, deductibles, and out-of-pocket costs 
        are affordable relative to family income, with protection from 
        catastrophic medical costs and bankruptcy.
            (3) Recognizes the shared responsibility of Federal and 
        State governments, households, and employers to contribute 
        toward fair and adequate financing of health insurance for all.
            (4) Promotes stability and equity in healthcare coverage.
            (5) Places a high value on effective, evidence-based care, 
        and reduces over-utilization, duplication, and waste.

           PART 2--INVESTMENT IN NATURAL RESOURCE ADAPTATION

SEC. 321. DEFINITIONS.

    In this part:
            (1) Ecological process.--
                    (A) In general.--The term ``ecological process'' 
                means a biological, chemical, or physical interaction 
                between the biotic and abiotic components of an 
                ecosystem.
                    (B) Inclusions.--The term ``ecological process'' 
                includes--
                            (i) nutrient cycling;
                            (ii) pollination;
                            (iii) predator-prey relationships;
                            (iv) soil formation;
                            (v) gene flow;
                            (vi) larval dispersal and settlement;
                            (vii) hydrological cycling;
                            (viii) decomposition; and
                            (ix) disturbance regimes, such as fire and 
                        flooding.
            (2) Fish and wildlife.--The term ``fish and wildlife'' 
        means--
                    (A) any species of wild fauna, including fish and 
                other aquatic species; and
                    (B) any fauna in a captive breeding program the 
                object of which is to reintroduce individuals of a 
                depleted indigenous species into previously occupied 
                range.
            (3) Habitat.--The term ``habitat'' means the physical, 
        chemical, and biological properties that are used by wildlife 
        (including aquatic and terrestrial plant communities) for 
        growth, reproduction, and survival, food, water, cover, and 
        space, on a tract of land, in a body of water, or in an area or 
        region.
            (4) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (5) Plant.--The term ``plant'' means any species of wild 
        flora.
            (6) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.

SEC. 322. ADAPTATION FUND.

    (a) Availability of Amounts.--All amounts deposited in the 
Investment in Natural Resource Adaptation Account established by 
section 9512 of the Internal Revenue Code of 1986 shall be available to 
carry out activities (including research and education activities) that 
assist fish and wildlife, fish and wildlife habitat, plants, and 
associated ecological processes in becoming more resilient, adapting 
to, and surviving the impacts of climate change and ocean acidification 
(referred to in this section as ``adaptation activities'') pursuant to 
this section.
    (b) Department of the Interior.--Of the amounts made available 
annually to carry out this subsection--
            (1) 35 percent shall be allocated to the Secretary of the 
        Interior, and subsequently made available to States through the 
        Wildlife Conservation and Restoration Account established under 
        section 3(a)(2) of the Pittman-Robertson Wildlife Restoration 
        Act (16 U.S.C. 669b(a)(2)) to carry out adaptation activities 
        in accordance with comprehensive State adaptation strategies, 
        as described in subsection (j);
            (2) 19 percent shall be allocated to the Secretary of the 
        Interior for use in funding adaptation activities carried out--
                    (A) under endangered species, migratory bird, and 
                other fish and wildlife programs administered by the 
                United States Fish and Wildlife Service;
                    (B) on wildlife refuges and other public land under 
                the jurisdiction of the United States Fish and Wildlife 
                Service, the Bureau of Land Management, or the National 
                Park Service; or
                    (C) within Federal water managed by the Bureau of 
                Reclamation;
            (3) 5 percent shall be allocated to the Secretary of the 
        Interior for adaptation activities carried out under 
        cooperative grant programs, including--
                    (A) the cooperative endangered species conservation 
                fund authorized under section 6(i) of the Endangered 
                Species Act of 1973 (16 U.S.C. 1535(i));
                    (B) programs under the North American Wetlands 
                Conservation Act (16 U.S.C. 4401 et seq.);
                    (C) the multinational species conservation fund 
                established under the heading ``multinational species 
                conservation fund'' of title I of the Department of the 
                Interior and Related Agencies Appropriations Act, 1999 
                (16 U.S.C. 4246);
                    (D) the Neotropical Migratory Bird Conservation 
                Fund established by section 9(a) of the Neotropical 
                Migratory Bird Conservation Act (16 U.S.C. 6108(a));
                    (E) the Coastal Program of the United States Fish 
                and Wildlife Service;
                    (F) the National Fish Habitat Action Plan;
                    (G) the Partners for Fish and Wildlife Program;
                    (H) the Landowner Incentive Program;
                    (I) the Wildlife Without Borders Program of the 
                United States Fish and Wildlife Service; and
                    (J) the Park Flight Migratory Bird Program of the 
                National Park Service; and
            (4) 1 percent shall be allocated to the Secretary of the 
        Interior and subsequently made available to Indian tribes to 
        carry out adaptation activities through the tribal wildlife 
        grants program of the United States Fish and Wildlife Service.
    (c) Land and Water Conservation Fund.--
            (1) Deposits.--
                    (A) In general.--Of the amounts made available for 
                each fiscal year to carry out this subsection, 10 
                percent shall be deposited into the Land and Water 
                Conservation Fund established under section 2 of the 
                Land and Water Conservation Fund Act of 1965 (16 U.S.C. 
                460l-5).
                    (B) Deposits to the Land and Water Conservation 
                Fund under this subsection shall be available without 
                further appropriation or fiscal year limitation and 
                shall be supplemental to authorizations provided under 
                section 3 of the Land and Water Conservation Fund Act 
                of 1965 (16 U.S.C. 460l-6) which shall remain available 
                for non-adaptation needs.
            (2) Allocations.--Of the amounts deposited under this 
        subsection into the Land and Water Conservation Fund--
                    (A) \1/6\ shall be allocated to the Secretary of 
                the Interior and made available on a competitive basis 
                to carry out adaptation activities through the 
                acquisition of land and interests in land under section 
                6 of the Land and Water Conservation Fund Act of 1965 
                (16 U.S.C. 460l-8)--
                            (i) to States in accordance with 
                        comprehensive wildlife conservation strategies 
                        and Indian tribes;
                            (ii) notwithstanding section 5 of that Act 
                        (16 U.S.C. 460l-7); and
                            (iii) in addition to grants provided 
                        pursuant to--
                                    (I) annual appropriations Acts;
                                    (II) the Energy Policy Act of 2005 
                                (42 U.S.C. 15801 et seq.); or
                                    (III) any other authorization for 
                                nonadaptation needs;
                    (B) \1/3\ shall be allocated to the Secretary of 
                the Interior to carry out adaptation activities through 
                the acquisition of lands and interests in land under 
                section 7 of the Land and Water Conservation Fund Act 
                of 1965 (16 U.S.C. 460l-9);
                    (C) \1/6\ shall be allocated to the Secretary of 
                Agriculture and made available to the States to carry 
                out adaptation activities through the acquisition of 
                land and interests in land under section 7 of the 
                Forest Legacy Program under the Cooperative Forestry 
                Assistance Act of 1978 (16 U.S.C. 2103c); and
                    (D) \1/3\ shall be allocated to the Secretary of 
                Agriculture to carry out adaptation activities through 
                the acquisition of land and interests in land under 
                section 7 of the Land and Water Conservation Fund Act 
                of 1965 (16 U.S.C. 460l-9).
            (3) Expenditure of funds.--In allocating funds under 
        subsection (c), the Secretary of the Interior and the Secretary 
        of Agriculture shall take into consideration factors 
        including--
                    (A) the availability of non-Federal contributions 
                from State, local, or private sources;
                    (B) opportunities to protect wildlife corridors or 
                otherwise to link or consolidate fragmented habitats;
                    (C) opportunities to reduce the risk of 
                catastrophic wildfires, extreme flooding, or other 
                climate-related events that are harmful to fish and 
                wildlife and people;
                    (D) the potential for conservation of species or 
                habitat types at serious risk due to climate change, 
                ocean acidification, and other stressors; and
                    (E) the potential to provide enhanced access to 
                land and water for fishing, hunting, and other public 
                recreational uses.
    (d) Forest Service.--Of the amounts made available annually to 
carry out this section, 5 percent shall be allocated to the Secretary 
of Agriculture for use in funding adaptation activities carried out on 
national forests and national grasslands under the jurisdiction of the 
Forest Service, or pursuant to the cooperative Wings Across the 
Americas Program.
    (e) Environmental Protection Agency.--Of the amounts made available 
annually to carry out this section, 5 percent shall be allocated to the 
Administrator of the Environmental Protection Agency for use in 
adaptation activities restoring and protecting--
            (1) large-scale freshwater aquatic ecosystems, such as the 
        Everglades, the Great Lakes, Flathead Lake, the Missouri River, 
        the Mississippi River, the Colorado River, the Sacramento-San 
        Joaquin Rivers, the Ohio River, the Columbia-Snake River 
        System, the Apalachicola, Chattahoochee and Flint River System, 
        the Connecticut River, and the Yellowstone River;
            (2) large-scale estuarine ecosystems, such as Chesapeake 
        Bay, Long Island Sound, Puget Sound, the Mississippi River 
        Delta, San Francisco Bay Delta, Narragansett Bay, and 
        Albemarle-Pamlico Sound; and
            (3) freshwater and estuarine ecosystems, watersheds, and 
        basins identified as priorities by the Administrator of the 
        Environmental Protection Agency, working in cooperation with 
        other Federal agencies, States, local governments, scientists, 
        and other conservation partners.
    (f) Corps of Engineers.--Of the amounts made available annually to 
carry out this section, 10 percent shall be allocated to the Secretary 
of the Army for use by the Corps of Engineers to carry out adaptation 
activities restoring--
            (1) large-scale freshwater aquatic ecosystems, such as the 
        ecosystems described in subsection (e)(1);
            (2) large-scale estuarine ecosystems, such as the 
        ecosystems described in subsection (e)(2);
            (3) freshwater and estuarine ecosystems, watersheds, and 
        basins identified as priorities by the Corps of Engineers, 
        working in cooperation with other Federal agencies, States, 
        local governments, scientists, and other conservation partners; 
        and
            (4) habitats or ecosystems under programs such as the 
        Estuary Restoration Act of 2000 (33 U.S.C. 2901 et seq.), 
        project modifications for improvement of the environment, and 
        aquatic restoration under section 206 of the Water Resources 
        Development Act of 1996 (33 U.S.C. 2330).
    (g) Department of Commerce.--Of the amounts made available annually 
to carry out this section, 10 percent shall be allocated to the 
Secretary of Commerce for use in funding adaptation activities to 
protect, maintain, and restore coastal, estuarine, and marine 
resources, habitats, and ecosystems, including such activities carried 
out under--
            (1) the coastal and estuarine land conservation program;
            (2) the community-based restoration program;
            (3) the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 
        et seq.), subject to the condition that State coastal agencies 
        shall incorporate, and the Secretary of Commerce shall approve, 
        coastal zone management plan elements that are--
                    (A) consistent with the national adaptation 
                strategy under subsection (i), as part of a coastal 
                zone management program established under this Act; and
                    (B) specifically designed to strengthen the ability 
                of coastal, estuarine, and marine resources, habitats, 
                and ecosystems to adapt to and withstand the impacts 
                of--
                            (i) global warming; and
                            (ii) where practicable, ocean 
                        acidification;
            (4) the Open Rivers Initiative;
            (5) the Magnuson Fishery Conservation and Management Act 
        (16 U.S.C. 1801 et seq.);
            (6) the Marine Mammal Protection Act of 1972 (16 U.S.C. 
        1361 et seq.);
            (7) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
        seq.);
            (8) the Marine Protection, Research, and Sanctuaries Act of 
        1972 (33 U.S.C. 1401 et seq.); and
            (9) the Coral Reef Conservation Act of 2000 (16 U.S.C. 6401 
        et seq.).
    (h) Cost Sharing.--Notwithstanding any other provision of law, a 
State or Indian tribe that receives a grant under paragraph (1) or (4) 
of subsection (b) shall provide 10 percent of the costs of each 
activity carried out using amounts under the grant.
    (i) National Adaptation Strategy.--
            (1) In general.--Effective beginning on the date on which 
        the President establishes the national strategy under paragraph 
        (3), funds made available under paragraphs (2), (3), and (4) of 
        subsection (b) and subsections (c) through (g) shall be used 
        only for adaptation activities that are consistent with the 
        national strategy.
            (2) Initial period.--Until the date on which the President 
        establishes the national strategy under paragraph (3), funds 
        made available under paragraphs (2), (3), and (4) of subsection 
        (b) and subsections (c) through (g) shall be used only for 
        adaptation activities that are consistent with a workplan 
        established by the President.
            (3) National strategy.--
                    (A) In general.--Not later than 3 years after the 
                date of enactment of this Act, the President shall 
                develop and implement a national strategy for assisting 
                fish and wildlife, fish and wildlife habitat, plants, 
                and associated ecological processes in becoming more 
                resilient and adapting to the impacts of climate change 
                and ocean acidification.
                    (B) Administration.--In establishing and revising 
                the national strategy, the President shall--
                            (i) base the national strategy on the best 
                        available science, as identified by the Science 
                        Advisory Board established under subparagraph 
                        (D);
                            (ii) develop the national strategy in 
                        cooperation with State fish and wildlife 
                        agencies, State coastal agencies, United States 
                        territories, and Indian tribes;
                            (iii) coordinate with the Secretary of the 
                        Interior, the Secretary of Commerce, the 
                        Secretary of Agriculture, the Secretary of 
                        Defense, the Administrator of the Environmental 
                        Protection Agency, and other agencies as 
                        appropriate;
                            (iv) consult with local governments, 
                        conservation organizations, scientists, and 
                        other interested stakeholders; and
                            (v) provide public notice and opportunity 
                        for comment.
                    (C) Contents.--The President shall include in the 
                national strategy, at a minimum, prioritized goals and 
                measures and a schedule for implementation--
                            (i) to identify and monitor fish and 
                        wildlife, fish and wildlife habitat, plants, 
                        and associated ecological processes that are 
                        particularly likely to be adversely affected by 
                        climate change and ocean acidification and have 
                        the greatest need for conservation;
                            (ii) to identify and monitor coastal, 
                        estuarine, marine, terrestrial, and freshwater 
                        habitats that are at the greatest risk of being 
                        damaged by climate change and ocean 
                        acidification;
                            (iii) to assist species in adapting to the 
                        impacts of climate change and ocean 
                        acidification;
                            (iv) to protect, acquire, maintain, and 
                        restore fish and wildlife habitat to build 
                        resilience to climate change and ocean 
                        acidification;
                            (v) to provide habitat linkages and 
                        corridors to facilitate fish, wildlife, and 
                        plant movement in response to climate change 
                        and ocean acidification;
                            (vi) to restore and protect ecological 
                        processes that sustain fish, wildlife, and 
                        plant populations that are vulnerable to 
                        climate change and ocean acidification;
                            (vii) to protect, maintain, and restore 
                        coastal, marine, and aquatic ecosystems so that 
                        the ecosystems are more resilient and better 
                        able to withstand the additional stresses 
                        associated with climate change, including 
                        relative sea level rise and ocean 
                        acidification;
                            (viii) to protect ocean and coastal species 
                        from the impact of climate change and ocean 
                        acidification;
                            (ix) to incorporate adaptation strategies 
                        and activities to address relative sea level 
                        rise in coastal zone planning;
                            (x) to protect, maintain, and restore ocean 
                        and coastal habitats to build healthy and 
                        resilient ecosystems, including the purchase of 
                        coastal and island land; and
                            (xi) to incorporate consideration of 
                        climate change and ocean acidification, and to 
                        integrate adaptation strategies and activities 
                        for fish and wildlife, fish and wildlife 
                        habitat, plants, and associated ecological 
                        processes, in the planning and management of 
                        Federal land and water administered by the 
                        Federal agencies that receive funding under 
                        this section.
                    (D) Science advisory board.--
                            (i) Establishment.--Not later than 180 days 
                        after the date of enactment of this Act, the 
                        Secretary of the Interior shall establish and 
                        appoint the members of a science advisory 
                        board, to be comprised of not fewer than 10 and 
                        not more than 20 members, who shall--
                                    (I) be recommended by the President 
                                of the National Academy of Sciences;
                                    (II) have expertise in fish, 
                                wildlife, plant, aquatic, and coastal 
                                and marine biology, ecology, climate 
                                change, ocean acidification, and other 
                                relevant scientific disciplines; and
                                    (III) represent a balanced 
                                membership between Federal, State, and 
                                local representatives, universities, 
                                and conservation organizations.
                            (ii) Duties.--The science advisory board 
                        shall--
                                    (I) advise the President and 
                                relevant Federal agencies and 
                                departments on--
                                            (aa) the best available 
                                        science regarding the impacts 
                                        of climate change and ocean 
                                        acidification on fish and 
                                        wildlife, habitat, plants, and 
                                        associated ecological 
                                        processes; and
                                            (bb) scientific strategies 
                                        and mechanisms for adaptation; 
                                        and
                                    (II) identify and recommend 
                                priorities for ongoing research needs 
                                on those issues.
                            (iii) Collaboration.--The science advisory 
                        board shall collaborate with other climate 
                        change and ecosystem research entities in other 
                        Federal agencies and departments.
                            (iv) Availability to public.--The advice 
                        and recommendations of the science advisory 
                        board shall be made available to the public.
                            (v) Nonapplicability of faca.--The Federal 
                        Advisory Committee Act (5 U.S.C. App.) shall 
                        not apply to the science advisory board.
                    (E) Coordination with other plans.--In developing 
                the national strategy, the President shall, to the 
                maximum extent practicable--
                            (i) take into consideration research and 
                        information contained in--
                                    (I) State comprehensive wildlife 
                                conservation plans;
                                    (II) the North American waterfowl 
                                management plan;
                                    (III) the national fish habitat 
                                action plan;
                                    (IV) coastal zone management plans;
                                    (V) the reports of the Pew Oceans 
                                Commission and the United States 
                                Commission on Ocean Policy; and
                                    (VI) other relevant plans; and
                            (ii) coordinate and integrate the goals and 
                        measures identified in the national strategy 
                        with the goals and measures identified in those 
                        plans.
                    (F) Revisions.--Not later than 5 years after the 
                date on which the strategy is developed, and not less 
                frequently than every 5 years thereafter, the President 
                shall review and update the national strategy using the 
                procedures described in this paragraph.
    (j) State Comprehensive Adaptation Strategies.--
            (1) In general.--Except as provided in paragraph (2), funds 
        made available to States under this part shall be used only for 
        activities that are consistent with a State strategy that has 
        been approved by--
                    (A) the Secretary of the Interior; and
                    (B) for any State with a coastal zone (within the 
                meaning of the Coastal Zone Management Act (16 U.S.C. 
                1451 et seq.)), by the Secretary of Commerce, subject 
                to the condition that approval by the Secretary of 
                Commerce shall be required only for those portions of 
                the strategy relating to activities affecting the 
                coastal zone.
            (2) Initial period.--
                    (A) In general.--Until the earlier of the date that 
                is 3 years after the date of enactment of this Act or 
                the date on which a State receives approval for the 
                State strategy, a State shall be eligible to receive 
                funding under subsection (b)(1) for adaptation 
                activities that are--
                            (i) consistent with the comprehensive 
                        wildlife strategy of the State and, where 
                        appropriate, other fish, wildlife and 
                        conservation strategies; and
                            (ii) in accordance with a workplan 
                        developed in coordination with--
                                    (I) the Secretary of the Interior; 
                                and
                                    (II) for any State with a coastal 
                                zone (within the meaning of the Coastal 
                                Zone Management Act (16 U.S.C. 1451 et 
                                seq.)), by the Secretary of Commerce, 
                                subject to the condition that 
                                coordination with the Secretary of 
                                Commerce shall be required only for 
                                those portions of the strategy relating 
                                to activities affecting the coastal 
                                zone.
                    (B) Pending approval.--During the period for which 
                approval by the applicable Secretary of a State 
                strategy described in paragraph (3) is pending, the 
                State may continue receiving funds under subsection 
                (b)(1) pursuant to the workplan described subparagraph 
                (A)(ii).
            (3) Requirements.--A State strategy shall--
                    (A) describe the impacts of climate change and 
                ocean acidification on the diversity and health of the 
                fish, wildlife and plant populations, habitats, and 
                associated ecological processes;
                    (B) describe and prioritize proposed conservation 
                actions to assist fish, wildlife, and plant populations 
                in adapting to those impacts;
                    (C) establish programs for monitoring the impacts 
                of climate change on fish, wildlife, and plant 
                populations, habitats, and associated ecological 
                processes;
                    (D) include strategies, specific conservation 
                actions, and a timeframe for implementing conservation 
                actions for fish, wildlife, and plant populations, 
                habitats, and associated ecological processes;
                    (E) establish methods for assessing the 
                effectiveness of conservation actions taken to assist 
                fish, wildlife, and plant populations, habitats, and 
                associated ecological processes in adapting to those 
                impacts and for updating those actions to respond 
                appropriately to new information or changing 
                conditions;
                    (F) be developed--
                            (i) with the participation of the State 
                        fish and wildlife agency, the State agency 
                        responsible for administration of Land and 
                        Water Conservation Fund grants, the State 
                        Forest Legacy program coordinator, and the 
                        State coastal agency; and
                            (ii) in coordination with the Secretary of 
                        the Interior and, where applicable, the 
                        Secretary of Commerce;
                    (G) provide for solicitation and consideration of 
                public and independent scientific input;
                    (H) take into consideration research and 
                information contained in, and coordinate with and 
                integrate the goals and measures identified in, as 
                appropriate, other fish, wildlife, and habitat 
                conservation strategies, including--
                            (i) the national fish habitat action plan;
                            (ii) plans under the North American 
                        Wetlands Conservation Act (16 U.S.C. 4401 et 
                        seq.);
                            (iii) the Federal, State, and local 
                        partnership known as ``Partners in Flight'';
                            (iv) federally approved coastal zone 
                        management plans under the Coastal Zone 
                        Management Act of 1972 (16 U.S.C. 1451 et 
                        seq.);
                            (v) federally approved regional fishery 
                        management plans and habitat conservation 
                        activities under the Magnuson Fishery 
                        Conservation and Management Act (16 U.S.C. 1801 
                        et seq.);
                            (vi) the national coral reef action plan;
                            (vii) recovery plans for threatened species 
                        and endangered species under section 4(f) of 
                        the Endangered Species Act of 1973 (16 U.S.C. 
                        1533(f));
                            (viii) habitat conservation plans under 
                        section 10 of that Act (16 U.S.C. 1539);
                            (ix) other Federal and State plans for 
                        imperiled species;
                            (x) the United States shorebird 
                        conservation plan;
                            (xi) the North American waterbird 
                        conservation plan; and
                            (xii) other State-based strategies that 
                        comprehensively implement adaptation activities 
                        to remediate the effects of climate change and 
                        ocean acidification on fish, wildlife, and 
                        habitats; and
                    (I) be incorporated into a revision of the 
                comprehensive wildlife conservation strategy of a 
                State--
                            (i) that has been submitted to the United 
                        States Fish and Wildlife Service; and
                            (ii)(I) that has been approved by the 
                        Service; or
                            (II) on which a decision on approval is 
                        pending.
            (4) Updating.--Each State strategy described in paragraph 
        (3) shall be updated at least every 5 years.

                          PART 3--EARLY ACTION

SEC. 331. EARLY ACTION.

    (a) In General.--Annually, the Secretary of the Treasury shall 
distribute the balance of the Early Action Account established under 
section 9512 to owners or operators of covered facilities and other 
facilities that emit greenhouse gas in accordance with the procedures 
and standards in subsection (b), in recognition of actions of the 
owners and operators taken since January 1, 1994, that resulted in 
verified and credible reductions of greenhouse gas emissions.
    (b) Regulations.--(b) Not later than 1 year after the date of 
enactment of this Act, the Administrator of the Environmental 
Protection Agency shall establish by regulation, procedures and 
standards for use in distributing to owners and operators of covered 
facilities and other facilities that emit greenhouse gas, amounts in 
the Early Action Account.
    (c) Procedures and Standards.--The procedures and standards 
established under subsection (b) shall provide for consideration of 
verified and credible emission reductions registered before the date of 
enactment of this Act under--
            (1) the Climate Leaders Program, or any other voluntary 
        greenhouse gas reduction program of the United States 
        Environmental Protection Agency and the United States 
        Department of Energy;
            (2) the Voluntary Reporting of Greenhouse Gases Program of 
        the Energy Information Administration;
            (3) State or regional greenhouse gas emission reduction 
        programs that include systems for tracking and verifying the 
        greenhouse gas emission reductions; and
            (4) voluntary entity programs that resulted in entity-wide 
        reductions (including offsetting load growth) in greenhouse gas 
        emissions.
    (d) Eligible Actions.--Activities for which early action credit may 
be awarded may include, but are not limited to--
            (1) avoided greenhouse gas emissions from programs that 
        reduce load growth, including: --
                    (A) energy efficiency;
                    (B) demand side management; and
                    (C) zero-emissions energy resources, including 
                renewable energy, and
            (2) purchases of voluntary carbon offsets that result in 
        measurable, verifiable, additional, and enforceable greenhouse 
        gas reductions (or increase in sequestered greenhouse gas 
        emissions) that are third party certified and verified 
        according to the third party standard and registered with a 
        tracking system for certified offsets.

                    PART 4--STATE AND TRIBAL ACTION

SEC. 341. ALLOCATION FOR ENERGY SAVINGS.

    (a) Allocation for Building Efficiency.--Not later than January 1, 
2012, and annually thereafter through January 1, 2050, the Secretary of 
the Treasury shall allocate 6 percent of the balance of the State and 
Tribal Action Account among States that are in compliance with section 
304(c) of the Energy Conservation and Production Act .
    (b) Distribution.--Not later than 2 years after the date of 
enactment of this Act, the Secretary of the Treasury shall establish 
procedures and standards for the distribution of amounts to States in 
accordance with subsections (a) and (b).

SEC. 342. ALLOCATION FOR STATES WITH PROGRAMS THAT EXCEED FEDERAL 
              EMISSION REDUCTION TARGETS.

    (a) Allocation.--Not later than April 1, 2011, and annually 
thereafter through calendar year 2049, the Secretary of the Treasury 
shall allocate 25 percent of the balance of the State and Tribal Action 
Account for the following calendar year among States that have--
            (1) before the date of enactment of this Act, enacted 
        statewide greenhouse gas emission reduction targets that are 
        more stringent than the nationwide targets established under 
        section 9911 of the Internal Revenue Code of 1986; and
            (2) by the time of an allocation under this subsection, 
        imposed on covered facilities within the States aggregate 
        greenhouse gas emission limitations more stringent than those 
        imposed on covered facilities under section 9911 of the 
        Internal Revenue Code of 1986.
    (b) Distribution.--Not later than 2 years after the date of 
enactment of this Act, the Secretary of the Treasury shall establish 
procedures and standards for use in distributing funds among States in 
accordance with subsection (a).
    (c) Use.--Any State receiving funds under this section for a 
calendar year shall use not less than 90 percent of such funds in 1 or 
more of the ways described in section 343(c)(1).

SEC. 343. GENERAL ALLOCATION.

    (a) Allocation.--Subject to subsection (d)(3), not later than April 
1, 2011, and annually thereafter through calendar year 2049, the 
Secretary of the Treasury shall allocate 62 percent of the balance of 
the State and Tribal Action Account for the following calendar year 
among States.
    (b) Distribution.--The allowances available for allocation to 
States under subsection (a) for a calendar year shall be distributed as 
follows:
            (1) For each calendar year, \1/2\ of the amount available 
        for allocation to States under subsection (a) shall be 
        distributed among individual States based on the proportion 
        that--
                    (A) the expenditures of a State for the low-income 
                home energy assistance program established under the 
                Low-Income Home Energy Assistance Act of 1981 (42 
                U.S.C. 8621 et seq.) for the preceding calendar year; 
                bears to
                    (B) the expenditures of all States for that program 
                for the preceding calendar year.
            (2) For each calendar year, \1/2\ of the amount available 
        for allocation to States under subsection (a) shall be 
        distributed among the States based on the proportion that--
                    (A) the population of a State, as determined by the 
                most recent decennial census preceding the calendar 
                year for which the allocation regulations are for the 
                allocation year; bears to
                    (B) the population of all States, as determined by 
                that census.
    (c) Use.--
            (1) In general.--During any calendar year, a State shall 
        use in 1 or more of the following ways not less than 90 percent 
        of the amount allocated to the State under this section for 
        that calendar year:
                    (A) To address local or regional impacts of climate 
                change, including by accommodating, protecting, or 
                relocating affected communities and public 
                infrastructure.
                    (B) To collect, evaluate, disseminate, and use 
                information necessary for affected coastal communities 
                to adapt to climate change (such as information derived 
                from inundation prediction systems).
                    (C) To address local or regional impacts of climate 
                change policy, including providing assistance to 
                displaced workers.
                    (D) To mitigate impacts on energy-intensive 
                industries in internationally competitive markets.
            (2) Use for recycling.--During any calendar year, a State 
        shall use not less than 5 percent of the amounts allocated to 
        the State under this section for increasing recycling rates 
        through activities such as--
                    (A) improving recycling infrastructure;
                    (B) increasing public education on the benefits of 
                recycling, particularly with respect to greenhouse 
                gases;
                    (C) improving residential, commercial, and 
                industrial collection of recyclables;
                    (D) improving recycling system efficiency;
                    (E) increasing recycling yields; and
                    (F) improving the quality and usefulness of 
                recycled materials.
            (3) Offset of increased energy costs.--Any amount allocated 
        to a State under this section which is not used for a purpose 
        described in paragraph (1) shall be used to offset the 
        increased energy costs incurred by the State in the performance 
        of governmental functions.
    (d) Program for Tribal Communities.--
            (1) Establishment.--Not later than 3 years after the date 
        of enactment of this Act, the Secretary of the Interior shall 
        by regulation establish a program for Indian tribes that is 
        designed to deliver assistance to Indian tribes within the 
        United States that face disruption or dislocation as a result 
        of global climate change, utilizing the rulemaking process 
        identified under the Negotiated Rulemaking Act (5 U.S.C. 657 et 
        seq.).
            (2) Allocation.--Beginning in the first calendar year that 
        begins after promulgation of the regulations referred to in 
        paragraph (1), and annually thereafter until calendar year 
        2050, the Secretary of the Treasury shall allocate 7 percent of 
        the balance of the State and Tribal Action Account for each 
        calendar year to the program established under paragraph (1).

               PART 5--DOMESTIC AGRICULTURE AND FORESTRY

SEC. 351. ALLOCATION.

    The Secretary of Agriculture shall carry out a program to--
            (1) achieve real, verifiable, additional, permanent, and 
        enforceable reductions in greenhouse gas emissions from the 
        agriculture and forestry sectors of the United States economy; 
        and
            (2) achieve real, verifiable, additional, permanent, and 
        enforceable increases in greenhouse gas sequestration from 
        those sectors.

SEC. 352. AGRICULTURAL AND FORESTRY GREENHOUSE GAS MANAGEMENT RESEARCH.

    (a) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of Agriculture, in consultation with scientific 
and agricultural and forestry experts, shall prepare and submit to 
Congress a report that describes the status of research on agricultural 
and forestry greenhouse gas management, including a description of--
            (1) research on soil carbon sequestration and other 
        agricultural and forestry greenhouse gas management that has 
        been carried out;
            (2) any additional research that is necessary;
            (3) the proposed priority for additional research;
            (4) the most appropriate approaches for conducting the 
        additional research; and
            (5) the extent to which and the manner in which carbon 
        credits that are specific to agricultural and forestry 
        operations, including harvested wood products and the reduction 
        of hazardous fuels to reduce the risk of uncharacteristically 
        severe wildfires, should be valued and allotted.
    (b) Standardized System of Soil Carbon Measurement and 
Certification for the Agricultural and Forestry Sectors.--
            (1) In general.--As soon as practicable after the date of 
        enactment of this Act, the Secretary of Agriculture shall 
        establish a standardized system of carbon measurement and 
        certification for the agricultural and forestry sectors.
            (2) Administration.--In establishing the system, the 
        Secretary of Agriculture shall--
                    (A) create a standardized system of measurements 
                for agricultural and forestry greenhouse gases; and
                    (B) delineate the most appropriate system of 
                certification of credit by public or private entities.
    (c) Research.--After the date of submission of the report described 
in paragraph (1), the President and the Secretary of Agriculture (in 
collaboration with the member institutions of higher education of the 
Consortium for Agricultural Soil Mitigation of Greenhouse Gases, 
institutions of higher education, and research entities) shall initiate 
a program to conduct any additional research that is necessary.

SEC. 353. DISTRIBUTION.

    (a) In General.--Taking into account the report prepared under 
section 352(a), the Secretary of Agriculture shall establish, by 
regulation, a program under which amounts from the Domestic Agriculture 
and Forestry Account established under section 9941 of the Internal 
Revenue Code of 1986 may be distributed to entities that carry out 
projects on agricultural and forest land that achieve real, verifiable, 
additional, permanent, and enforceable greenhouse gas emission 
mitigation benefits.
    (b) Nitrous Oxide and Methane.--The Secretary of Agriculture shall 
ensure that, during any 5-year period, the average annual percentage of 
amounts distributed to entities under the program established under 
subsection (a) specifically for achieving real, verifiable, additional, 
permanent, and enforceable reductions in nitrous oxide emissions 
through soil management or achieving real, verifiable, additional, 
permanent, and enforceable reductions in methane emissions through 
enteric fermentation and manure management shall be 0.5 percent.
    (c) Requirement.--The Secretary of Agriculture shall make 
distributions under this section in a manner that maximizes the 
avoidance or reduction of greenhouse gas emissions.

                     PART 6--INTERNATIONAL FORESTRY

SEC. 361. FINDINGS.

    Congress finds that--
            (1) land-use change and forest sector emissions account for 
        approximately 20 percent of global greenhouse gas emissions;
            (2) land conversion and deforestation are 2 of the largest 
        sources of greenhouse gas emissions in the developing world, 
        amounting to roughly 40 percent of the total greenhouse gas 
        emissions of the developing world;
            (3) with sufficient data, deforestation rates and forest 
        carbon stocks can be measured with an acceptable level of 
        uncertainty;
            (4) some countries are or will soon be ready to make 
        national-level commitments to reduce deforestation and forest 
        degradation and to engage in activities to achieve measurable 
        results, while other countries will benefit from capacity 
        building programs for a few years in order to establish the 
        necessary domestic institutions and laws to achieve reductions; 
        and
            (5) encouraging reduced deforestation and other forest 
        carbon activities in other countries can--
                    (A) provide critical leverage to encourage 
                voluntary developing country participation in emission 
                limitation regimes;
                    (B) facilitate greater overall reductions in 
                greenhouse gas emissions than would otherwise be 
                practicable; and
                    (C) substantially benefit biodiversity, 
                conservation and indigenous and other forest-dependent 
                people in developing countries.

SEC. 362. DEFINITION OF DEFORESTATION REDUCTION ACTIVITIES.

    In this part, the term ``deforestation reduction activities'' 
means--
            (1) activities directed at reducing greenhouse gas 
        emissions from deforestation and forest degradation in 
        countries other than the United States; and
            (2) activities directed at increasing sequestration of 
        carbon through restoration of forests, and degraded land in 
        countries other than the United States that has not been 
        forested prior to restoration, afforestation and improved 
        forest management, that meet the eligibility requirements and 
        quality criteria promulgated under section 364.

SEC. 363. ALLOCATION.

    Not later than April 1, 2011, and annually thereafter through 
calendar year 2049, the Administrator of the Environmental Protection 
Agency shall allocate and distribute the balance of the International 
Forestry Account for the following calendar year for use in carrying 
out deforestation reduction activities in countries other than the 
United States.

SEC. 364. QUALITY CRITERIA FOR DEFORESTATION REDUCTION ACTIVITIES.

    Not later than 2 years after the date of enactment of this Act, the 
Administrator of the Environmental Protection Agency, in consultation 
with the Secretary of the Interior, the Secretary of State, and the 
Secretary of Agriculture, shall promulgate quality criteria for 
deforestation reduction activities directed at reducing emissions from 
deforestation and forest degradation, and at sequestration of carbon 
through restoration of forests and degraded land, afforestation, and 
improved forest management in countries other than the United States, 
including requirements that those activities be--
            (1) designed, carried out, and managed -
                    (A) in accordance with widely-accepted 
                environmentally sustainable forestry practices;
                    (B) to promote native species and restoration of 
                native forests, where practicable and to avoid the 
                introduction of invasive nonnative species; and
                    (C) to promote fair compensation, public 
                participation, and the informed consent of affected 
                local communities and forest dependent populations; and
            (2) for not less than 50 percent of the funds covered by 
        this part, requirements that ensure that the associated 
        emission reductions or sequestrations are real, permanent, 
        additional, verifiable and enforceable, with reliable measuring 
        and monitoring and appropriate accounting for leakage.

SEC. 365. ELIGIBILITY FOR DEFORESTATION REDUCTION ACTIVITIES.

    (a) In General.--The Administrator of the Environmental Protection 
Agency, in consultation with the Secretary of State, shall identify and 
periodically update two lists of eligible countries for allocation and 
distribution of the International Forestry Account, based on their 
level of development of domestic programs to implement deforestation 
reduction activities, one identified as Phase I and the other as Phase 
II.
    (b) Phase I Countries.--The Phase I list, eligible for up to 50 
percent of the funds covered by this part, shall include countries that 
have demonstrated a commitment to conduct preparatory activities, which 
shall be identified in regulations promulgated by the Administrator of 
the Environmental Protection Agency, which are essential for building 
the capacity of the country to engage in deforestation or forest 
degradation reduction activities as described in section 362 and 
subsection (c), including project-level and institution building 
activities.
    (c) Phase II Countries.--The Phase II list, eligible for not less 
than 50 percent of the funds covered by this part, shall be limited to 
countries that have--
            (1) demonstrated the capacity to measure the results of 
        international deforestation reduction activities, based on 
        sufficient, accurate and verifiable historical data on changes 
        in national forest carbon stocks, and also demonstrated the 
        institutional capacity to reduce emissions from deforestation 
        and degradation;
            (2) capped greenhouse gas emissions from deforestation or 
        other land use change or otherwise established a national 
        emission reference scenario based on historical data;
            (3) commenced an emission reduction program for the forest 
        sector;
            (4) achieved national-level reductions of deforestation and 
        degradation below a baseline or credible reference scenario, 
        taking into account the average annual deforestation and 
        degradation rates of the country during a period of at least 5 
        consecutive years; and
            (5) demonstrated those reductions using remote sensing 
        technology, taking into account relevant international 
        standards.
    (d) The Administrator of the Environmental Protection Agency is 
encouraged to identify other incentives, including economic and market-
based incentives, to encourage developing countries with largely intact 
native forests to protect those forests.
    (e) No country may be eligible for both capacity building funds 
under subsection (b) and participation in an agreement for 
international forest carbon activities under section 114 of the Climate 
MATTERS Act of 2008.

SEC. 366. REVIEWS AND DISCOUNT.

    (a) Reviews.--Not later than 3 years after the date of enactment of 
this Act, and 5 years thereafter, the Administrator of the 
Environmental Protection Agency shall conduct a review of the program 
under this part.
    (b) Discount.--If, after the date that is 10 years after the date 
of enactment of this Act, the Administrator of the Environmental 
Protection Agency determines that foreign countries that, in the 
aggregate, generate greenhouse gas emissions accounting for more than 
0.5 percent of global greenhouse gas emissions have not capped those 
emissions, established emissions reference scenarios based on 
historical data, or otherwise reduced total forest emissions, such 
Administrator may apply a discount to distributions of funds to those 
countries under this part.

                       PART 7--ENERGY EFFICIENCY

SEC. 371. ALLOCATION.

    Not later than April 1, 2011, and annually thereafter through 
calendar year 2049, the Secretary of the Treasury shall allocate--
            (1) 39 percent of the balance of the Energy Efficiency 
        Account established under section 9512 of the Internal Revenue 
        Code of 1986 for the following year to States that can 
        demonstrate they have established a program that will reduce 
        electricity and natural gas demand in the state by 2 percent 
        each year,
            (2) 39 percent of the balance of the balance of such Energy 
        Efficiency Account for the following year among load-serving 
        entities,
            (3) 10 percent of the balance of such Energy Efficiency 
        Account for the following year to carry out the low-income home 
        energy assistance program established under the Low Income Home 
        Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.),
            (4) 2 percent of the balance of such Energy Efficiency 
        Account for the following year to carry out the Weatherization 
        Assistance Program for Low-Income Persons established under 
        part A of title IV of the Energy Conservation and Production 
        Act (42 U.S.C. 6861 et seq.), and
            (5) 10 percent of the balance of such Energy Efficiency 
        Account for the following year to carry out activities that 
        directly increase the energy efficiency in units assisted under 
        the HOME Investment Partnerships Program established under 
        title II of the Cranston-Gonzalez National Affordable Housing 
        Act (42 U.S.C. 12721 et seq.).

SEC. 372. DISTRIBUTION.

    (a) In General.--For each calendar year, the funds allocated under 
section 371 to load-serving entities shall be distributed by the 
Secretary of the Treasury to each load-serving entity, including each 
rural electric cooperative that serves as a load-serving entity in a 
State, based on the proportion that--
            (1) the quantity of electricity delivered by the load-
        serving entity during the 3 calendar years preceding the 
        calendar year for which the funds are distributed, adjusted 
        upward for electricity not delivered as a result of consumer 
        energy-efficiency programs implemented by the load-serving 
        entity and verified by the regulatory agency of the load-
        serving entity; bears to
            (2) the total quantity of electricity delivered by all 
        load-serving entities during those 3 calendar years.
    (b) Basis.--The Secretary of the Treasury shall base the 
determination of the quantity of electricity delivered by a load-
serving entity for the purpose of subsection (a) on the most recent 
data available in annual reports filed with the Energy Information 
Administration of the Department of Energy.

SEC. 373. USE.

    All funds received under this part by a load-serving entity shall 
be used solely to promote energy efficiency on the part of energy 
consumers.

SEC. 374. REPORTING.

    (a) In General.--Each load-serving entity that accepts funds 
distributed under this part shall, for each calendar year for which the 
load-serving entity accepts such funds, submit to the Secretary of 
Energy to report to the Secretary of the Treasury a report describing 
how, and to what extent, the load-serving entity used such funds during 
the preceding year.
    (b) Availability of Reports.--The Secretary of the Treasury shall 
make available to the public all reports submitted by any load-serving 
entity under subsection (a), including by publishing those reports on 
the Internet.

                   PART 8--ALTERNATIVE TRANSPORTATION

SEC. 381. GRANTS TO PROVIDE FOR ADDITIONAL AND IMPROVED PUBLIC 
              TRANSPORTATION SERVICE.

    (a) In General.--Of the funds allocated to the Transportation 
Alternatives Account each year pursuant to section 9512 of the Internal 
Revenue Code of 1986, 32 percent shall be distributed to designated 
recipients (as defined in section 5307(a) of title 49, United States 
Code) to maintain or improve public transportation through activities 
eligible under that section and associated measures that increase the 
direct or indirect greenhouse gas emissions reductions projected to 
result from those eligible activities, including--
            (1) improvements to lighting, heating, cooling, or 
        ventilation systems in stations and other facilities that 
        reduce direct or indirect greenhouse gas emissions;
            (2) adjustments to signal timing or other vehicle 
        controlling systems that reduce direct or indirect greenhouse 
        gas emissions;
            (3) purchasing or retrofitting rolling stock to improve 
        efficiency or reduce greenhouse gas emissions; and
            (4) improvements to energy distribution systems.
    (b) Distribution.--Of the balance of account funds, the Secretary 
shall distribute under subsection (a)----
            (1) 60 percent in accordance with the formulas contained in 
        subsections (a) through (c) of section 5336 of title 49, United 
        States Code; and
            (2) 40 percent in accordance with the formula contained in 
        section 5340 of that title.
    (c) Terms and Conditions.--A grant provided under this subsection 
shall be subject to the terms and conditions applicable to a grant 
provided under section 5307 of title 49, United States Code.
    (d) Cost Share.--The Federal share of cost of carrying out an 
activity using a grant under this subsection shall be determined in 
accordance with section 5307(e) of title 49, United States Code.

SEC. 382. GRANTS FOR CONSTRUCTION OF NEW PUBLIC TRANSPORTATION 
              PROJECTS.

    (a) In General.--Of the funds deposited in the Transportation 
Alternatives Account each year pursuant to section 9512 of the Internal 
Revenue Code of 1986, 32 percent shall be distributed to State and 
local government authorities for design, engineering, and construction 
of new fixed guideway transit projects or extensions to existing fixed 
guideway transit systems that will assist in reducing direct or 
indirect greenhouse gas emissions of the regional transportation 
sector.
    (b) Applications.--Applications for grants under this section shall 
be reviewed according to the process and criteria established under 
section 5309(c) of title 49, United States Code, for major capital 
investments and section 5309(d) of title 49, United States Code, for 
other projects.
    (c) Terms and Conditions.--Grant funds awarded under this section 
shall be subject to the terms and conditions applicable to a grant made 
under section 5309 of title 49, United States Code.

SEC. 383. GRANTS FOR TRANSPORTATION ALTERNATIVES AND TRAVEL DEMAND 
              REDUCTION PROJECTS.

    (a) In General.--Of the funds deposited into the Transportation 
Alternatives Account each year pursuant to section 9512 of the Internal 
Revenue Code of 1986, 32 percent shall be awarded to designated 
recipients (as defined in section 5307(a) of title 49, United States 
Code) and State, regional, and local government authorities to assist 
in reducing the direct and indirect greenhouse gas emissions of the 
regional transportation sector, through the following activities--
            (1) Carpool or telecommuting projects that do not include 
        new roadway capacity;
            (2) Bicycle transportation and pedestrian walkways in 
        accordance with section 217 of title 23, United State Code, and 
        the modification of public sidewalks to comply with the 
        Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 
        seq.);
            (3) Updating zoning and land use regulations to support, 
        allow, or incentivize walkable or transit-supportive 
        development patterns and land uses;
            (4) Transportation enhancement activities, including design 
        and retrofitting of streets for multimodal access;
            (5) Infrastructure-based intelligent transportation systems 
        that help reduce vehicle miles traveled, including automated 
        road-pricing, congestion pricing, and advanced traffic 
        management systems, provided they do not involve construction 
        of significant new roadway capacity;
            (6) Market-based programs to reduce travel demand, 
        including car or bicycle sharing and pay-as-you-drive 
        insurance.
    (b) Distribution of Funds.--In determining the recipients of grants 
under this section, applications shall be evaluated based on the total 
direct and indirect greenhouse gas emissions reductions that are 
projected to result from the project and projected reductions as a 
percentage of the total direct and indirect emissions of an entity, as 
determined by applicants using methods developed and promulgated by the 
Administrator, in concert with the Administrator of the United States 
Department of Transportation, no more than 3 years after the passage of 
this Act.
    (c) Government Share of Costs.--The Federal share of the cost of an 
activity funded using amounts made available under this section may not 
exceed 80 percent of the cost of the activity.
    (d) Terms and Conditions.--Except to the extent inconsistent with 
the terms of this section, grant funds awarded under this section shall 
be subject to the terms and conditions applicable to a grant made under 
section 133 of title 23, United States Code.

SEC. 384. TECHNICAL CAPACITY AND STANDARDS.

    (a) In General.--Of the funds deposited into the Transportation 
Alternatives Accounts each year pursuant to section 9512 of the 
Internal Revenue Code of 1986, 4 percent shall be distributed to 
Federal, State, and local government authorities including Municipal 
Planning Organizations to allocate resources and staff to improve and 
apply technical capacity for the development of plans and future plan 
updates including--
            (1) collection of travel and land use data to measure 
        transportation system performance using per capita vehicle 
        miles traveled and other measures adopted by the Administrator 
        of the Environmental Protection Agency, with the concurrence of 
        the Secretary of Transportation;
            (2) monitoring and periodically reporting vehicle miles 
        traveled by municipal planning region and statewide to 
        demonstrate that performance objectives are achieved;
            (3) modeling and analyses of transportation and land-use 
        scenarios to develop regional and statewide plans and plan 
        updates that will ensure that the emission reduction targets 
        established in section 386(3) this will continue to met during 
        the period prior to the planning horizon for each plan update;
            (4) refinements to travel models to improve consideration 
        of land use and non-motorized modes to estimate future system 
        performance that are determined to be reliable for the purpose 
        of estimating future travel and system performance; and
            (5) stakeholder engagement.
    (b) Distribution of Funds.--The Secretary shall distribute funds 
under subsection (a) as follows:
            (1) 80 percent to State and local government authorities 
        for developing and implementing activities specified under 
        subsection (a);
            (2) 20 percent to the United States Environmental 
        Protection Agency and the United States Department of 
        Transportation to establish methods for providing guidance, 
        support, tools, and information to State and local government 
        authorities for developing and implementing activities 
        specified under subsection (a).

SEC. 385. STUDY AND STANDARDS.

    (a) Study.--To improve the ability of recipients of funds under 
this part to maximize greenhouse gas emissions reductions resulting 
from funded activities, no more than 180 days after the passage of this 
Act----
            (1) the National Academy of Sciences Transportation 
        Research Board shall report to the Administrator of the United 
        States Department of Transportation recommendations for 
        improving research and tools to assess the effect of 
        transportation plans and land use plans on motor vehicle usage 
        rates and transportation sector greenhouse gas emissions; and
            (2) the Government Accountability Office shall report to 
        the Administrator of the Environmental Protection Agency on 
        shortcomings of current government data sources needed to 
        assess greenhouse gas emissions from the transportation sector 
        and to establish plans and policies to effectively reduce 
        greenhouse gas emissions from the transportation sector, and 
        make recommendations to address these shortcomings.
    (b) Technical Standards.--Not more than 2 years after the passage 
of this Act, based on recommendations issued pursuant to subsection 
(a), the Administrators of the United States Environmental Protection 
Agency and the United States Department of Transportation shall 
promulgate standards for transportation data collection, monitoring, 
planning, and modeling.

SEC. 386. CONDITION FOR RECEIPT OF FUNDS.

    To be eligible to receive funds under section 381, 382, or 383, 
projects or activities funded under such section must be part of an 
integrated State-wide, regional, or local transportation plan that 
shall--
            (1) include all modes of surface transportation;
            (2) utilize data collection, monitoring, planning, and 
        modeling methods pursuant to standards established in section 
        385(b);
            (3) establish targets for reducing long term greenhouse gas 
        emissions from the regional transportation sector through 
        reducing and managing motor vehicle usage;
            (4) demonstrate that the targets established pursuant to 
        subparagraph (3) will be achieved with--
                    (A) currently adopted land use plans and policies, 
                or
                    (B) revised land use plans and policies for which 
                commitments have been obtained by resolution of other 
                lawful action taken by jurisdictions with authority to 
                adopt land use plans and policies; and
            (5) report on estimated direct and indirect greenhouse 
        gases emissions from the transportation sector for 2005, and 
        aggregate emissions for each five-year period within the 
        planning horizon of the plan and each update; and
            (6) be certified by the Administrator of the Environmental 
        Protection Agency as consistent with the purposes of this Act.

          TITLE IV--EMISSIONS DETERMINATIONS AND MISCELLANEOUS

SEC. 401. DEFINITIONS.

    In this title:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Carbon dioxide equivalent.--The term ``carbon dioxide 
        equivalent'' means, for each greenhouse gas, the quantity of 
        the greenhouse gas that the Administrator determines makes the 
        same contribution to global warming as 1 metric ton of carbon 
        dioxide.
            (3) Greenhouse gas.--The term ``greenhouse gas'' means any 
        of--
                    (A) carbon dioxide;
                    (B) methane;
                    (C) nitrous oxide;
                    (D) sulfur hexafluoride;
                    (E) a perfluorocarbon;
                    (F) a hydrofluorocarbon; or
                    (G) any other anthropogenically-emitted gas that is 
                determined by the Administrator, after notice and 
                comment, to contribute to global warming to a non-
                negligible degree.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 402. FEDERAL GREENHOUSE GAS REGISTRY, EMISSIONS DETERMINATION, AND 
              UNCOVERED SECTOR EMISSIONS.

    (a) In General.--For purposes of carrying out the emissions 
allowance system under subtitle L of the Internal Revenue Code of 1986, 
the Administrator shall--
            (1) develop a Federal Greenhouse Gas Registry that--
                    (A) covers all United States emissions of 
                greenhouse gases;
                    (B) is complete, consistent, transparent and 
                accurate;
                    (C) will collect reliable and accurate data on 
                increases and reductions in United States greenhouse 
                gas emissions as well as greenhouse gas sequestration 
                that can be used by public and private entities to 
                design efficient and effective energy security 
                initiatives and greenhouse gas emission reduction 
                strategies; and
                    (D) will provide appropriate high-quality data to 
                be used for implementing greenhouse gas reduction 
                policies;
            (2) determine--
                    (A) for each covered facility, the carbon dioxide 
                equivalent of--
                            (i) greenhouse gas that was emitted by the 
                        use of coal by that covered facility during the 
                        preceding year;
                            (ii) greenhouse gas that will, assuming no 
                        capture and sequestration of that gas, be 
                        emitted from the use of any petroleum- or coal-
                        based liquid or gaseous fuel that was produced 
                        or imported by that covered facility during the 
                        preceding year;
                            (iii) greenhouse gas that was produced for 
                        sale or distribution or imported by that 
                        facility during the preceding year;
                            (iv) greenhouse gas that was emitted as a 
                        byproduct of hydrochlorofluorocarbon 
                        production; and
                            (v) greenhouse gas that will, assuming no 
                        capture and destruction or sequestration of 
                        that gas, be emitted--
                                    (I) from the use of natural gas 
                                that was, by that covered facility, 
                                processed, imported, or produced and 
                                not reinjected into the field; or
                                    (II) from the use of natural gas 
                                liquids that were processed or imported 
                                by that covered facility during the 
                                preceding year; and
                    (B) any additional reduction in carbon dioxide 
                equivalents by owners or operators of covered 
                facilities, including additional net reduction of 
                carbon dioxide equivalents due to displacing petroleum 
                in the transportation sector through actions by the 
                owners or operators of covered facilities that result 
                in increased use of electrified transportation, such as 
                plug-in hybrid vehicles, electric vehicles, port 
                electrification, electric rail, and truck stop 
                electrification; and
            (3) promulgate not later than 2 years after the date of the 
        enactment of this Act, and periodically revise, regulations 
        requiring that emissions in uncovered sectors do not grow, so 
        as to ensure that the goal of this Act to reduce United States 
        emissions 80 percent below 1990 levels by 2050 is met.
    (b) Annual Report.--The Administrator shall annually transmit to 
the Secretary a report describing the results of activities under 
subsection (a).
    (c) Definitions.--For purposes of this section--
            (1) the term ``uncovered sector'' means any sector that is 
        not primarily composed of covered facilities and whose 
        greenhouse gas emissions are not already included in the cap 
        through the regulation of a covered facility; and
            (2) the term ``United States greenhouse gas emissions'' 
        means the total quantity of greenhouse gas emissions calculated 
        by the Administrator on an annual basis and reported to the 
        United Nations Framework Convention on Climate Change 
        Secretariat.

SEC. 403. PARAMOUNT INTEREST WAIVER.

    (a) In General.--If the President determines that a national 
security emergency exists and, in light of information that was not 
available as of the date of enactment of this Act, it is in the 
paramount interest of the United States to modify any requirement under 
this Act and the amendments made by this Act to minimize the effects of 
the emergency, the President may, after opportunity for public notice 
and comment, temporarily adjust, suspend, or waive any regulations 
promulgated pursuant to this Act and the amendments made by this Act to 
achieve that minimization.
    (b) Consultation.--In making an emergency determination under 
subsection (a), the President shall, to the maximum extent practicable, 
consult with and take into account any advice received from--
            (1) the Secretary;
            (2) the National Academy of Sciences;
            (3) the Secretary of Energy; and
            (4) the Administrator.
    (c) Judicial Review.--An emergency determination under subsection 
(a) shall be subject to judicial review in accordance with section 307 
of the Clean Air Act (42 U.S.C. 7607).

SEC. 404. ADMINISTRATIVE PROCEDURE AND JUDICIAL REVIEW.

    (a) Rulemaking Procedures.--Any rule, requirement, regulation, 
method, standard, program, determination, or final action made or 
promulgated pursuant to any title of this Act and the amendments made 
by this Act shall be subject to the rulemaking procedures described in 
sections 551 through 557 of title 5, United States Code.
    (b) Enforcement.--(1) Each provision of this Act and any regulation 
issued pursuant to this Act shall be fully enforceable pursuant to 
sections 113, 303, and 304 of the Clean Air Act (42 U.S.C. 7413, 7603, 
7604). For purposes of enforcement under these sections, all 
requirements under this Act shall constitute requirements of the Clean 
Air Act, and, for purposes of enforcement under section 304 of the 
Clean Air Act (42 U.S.C. 7604), all requirements of this Act shall 
constitute emission standards or limitations under the Clean Air Act.
    (2) All provisions related to mandatory duties of the Secretary or 
any other Federal official shall be fully enforceable pursuant to 
section 304 of the Clean Air Act (42 U.S.C. 7604).
    (3) The district courts of the United States shall have 
jurisdiction to compel agency action (including discretionary agency 
action) under this Act that has been unreasonably delayed.
    (c) Recordkeeping, Inspections, Monitoring, Entry, and Subpoenas.--
The Secretary shall have the same powers and authority provided under 
sections 114 and 307(a) of the Clean Air Act (42 U.S.C. 7414, 7607(a)) 
in carrying out, administering, and enforcing this Act and the 
amendments made by this Act.
    (d) Judicial Review.--A petition for judicial review of any 
regulation promulgated, or final action carried out, by the Secretary 
or any other Federal official or agency pursuant to this Act may be 
filed in the United States Court of Appeals for the appropriate circuit 
and otherwise only in accordance with section 307(b) of the Clean Air 
Act (42 U.S.C. 7607(b)), except that petitions concerning actions of 
the Secretary may only be filed in the United States Court of Appeals 
for the District of Columbia. The provisions of section 307(f) of the 
Clean Air Act (42 U.S.C. 7607(f)) shall govern the award of costs and 
attorneys' fees in such cases.

SEC. 405. RETENTION OF STATE AUTHORITY.

    (a) In General.--Except as provided in subsection (b), in 
accordance with section 116 of the Clean Air Act (42 U.S.C. 7416) and 
section 510 of the Federal Water Pollution Control Act (33 U.S.C. 
1370), nothing in this Act and the amendments made by this Act 
precludes or abrogates the right of any State to adopt or enforce--
            (1) any standard, cap, limitation, or prohibition relating 
        to emissions of greenhouse gas; or
            (2) any requirement relating to control, abatement, or 
        avoidance of emissions of greenhouse gas.
    (b) Exception.--Notwithstanding subsection (a), no State may adopt 
a standard, cap, limitation, prohibition, or requirement that is less 
stringent than the applicable standard, cap, limitation, prohibition, 
or requirement under this Act and the amendments made by this Act.

SEC. 406. TRIBAL AUTHORITY.

    For purposes of this Act and the amendments made by this Act, the 
Secretary may treat any federally recognized Indian tribe as a State, 
in accordance with section 301(d) of the Clean Air Act (42 U.S.C. 
7601(d)).

SEC. 407. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this Act and the amendments made by this Act.
                                 <all>