[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2191 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2191

 To direct the Administrator of the Environmental Protection Agency to 
establish a program to decrease emissions of greenhouse gases, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 18, 2007

 Mr. Lieberman (for himself, Mr. Warner, Mr. Harkin, Mr. Coleman, Mrs. 
Dole, Ms. Collins, Mr. Cardin, Ms. Klobuchar, and Mr. Casey) introduced 
the following bill; which was read twice and referred to the Committee 
                    on Environment and Public Works

_______________________________________________________________________

                                 A BILL


 
 To direct the Administrator of the Environmental Protection Agency to 
establish a program to decrease emissions of greenhouse gases, and for 
                            other purposes.

    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 ``America's Climate 
Security Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purposes.
Sec. 4. Definitions.
               TITLE I--CAPPING GREENHOUSE GAS EMISSIONS

                     Subtitle A--Tracking Emissions

Sec. 1101. Purpose.
Sec. 1102. Definitions.
Sec. 1103. Reporting requirements.
Sec. 1104. Data quality and verification.
Sec. 1105. Federal greenhouse gas registry.
Sec. 1106. Enforcement.
                     Subtitle B--Reducing Emissions

Sec. 1201. Emission allowance account.
Sec. 1202. Compliance obligation.
Sec. 1203. Penalty for noncompliance.
          TITLE II--MANAGING AND CONTAINING COSTS EFFICIENTLY

                          Subtitle A--Trading

Sec. 2101. Sale, exchange, and retirement of emission allowances.
Sec. 2102. No restriction on transactions.
Sec. 2103. Allowance transfer system.
Sec. 2104. Allowance tracking system.
                          Subtitle B--Banking

Sec. 2201. Indication of calendar year.
Sec. 2202. Effect of time.
                         Subtitle C--Borrowing

Sec. 2301. Regulations.
Sec. 2302. Term.
Sec. 2303. Repayment with interest.
                          Subtitle D--Offsets

Sec. 2401. Outreach initiative on revenue enhancement for agricultural 
                            producers.
Sec. 2402. Establishment of domestic offset program.
Sec. 2403. Eligible agricultural and forestry offset project types.
Sec. 2404. Project initiation and approval.
Sec. 2405. Offset verification and issuance of allowances for 
                            agricultural and forestry projects.
Sec. 2406. Tracking of reversals for sequestration projects.
Sec. 2407. Examinations.
Sec. 2408. Timing and the provision of offset allowances.
Sec. 2409. Offset registry.
Sec. 2410. Environmental considerations.
Sec. 2411. Program review.
                   Subtitle E--International Credits

Sec. 2501. Use of international allowances or credits.
Sec. 2502. Regulations.
Sec. 2503. Facility certification.
               Subtitle F--Carbon Market Efficiency Board

Sec. 2601. Purposes.
Sec. 2602. Establishment of Carbon Market Efficiency Board.
Sec. 2603. Duties.
Sec. 2604. Powers.
Sec. 2605. Estimate of costs to economy of limiting greenhouse gas 
                            emissions.
           TITLE III--ALLOCATING AND DISTRIBUTING ALLOWANCES

                       Subtitle A--Early Auctions

Sec. 3101. Allocation for early auctions.
                      Subtitle B--Annual Auctions

Sec. 3201. Allocation for annual auctions.
                        Subtitle C--Early Action

Sec. 3301. Allocation.
Sec. 3302. Distribution.
                           Subtitle D--States

Sec. 3401. Allocation for energy savings.
Sec. 3402. Allocation for States with programs that exceed Federal 
                            emission reduction targets.
Sec. 3403. General allocation.
                   Subtitle E--Electricity Consumers

Sec. 3501. Allocation.
Sec. 3502. Distribution.
Sec. 3503. Use.
Sec. 3504. Reporting.
    Subtitle F--Bonus Allowances for Carbon Capture and Geological 
                             Sequestration

Sec. 3601. Allocation.
Sec. 3602. Qualifying projects.
Sec. 3603. Distribution.
Sec. 3604. 10-Year limit.
Sec. 3605. Exhaustion of bonus allowance account.
             Subtitle G--Domestic Agriculture and Forestry

Sec. 3701. Allocation.
Sec. 3702. Agricultural and forestry greenhouse gas management 
                            research.
Sec. 3703. Distribution.
              Subtitle H--International Forest Protection

Sec. 3801. Findings.
Sec. 3802. Definition of forest carbon activities.
Sec. 3803. Allocation.
Sec. 3804. Definition and eligibility requirements.
Sec. 3805. International forest carbon activities.
Sec. 3806. Reviews and discount.
                     Subtitle I--Covered Facilities

Sec. 3901. Allocation.
Sec. 3902. Distribution system.
Sec. 3903. Distributing emission allowances within the electric power 
                            sector.
Sec. 3904. Distributing emission allowances within the industrial 
                            sector.
            TITLE IV--AUCTIONS AND USES OF AUCTION PROCEEDS

                           Subtitle A--Funds

Sec. 4101. Establishment.
Sec. 4102. Amounts in Funds.
Sec. 4103. Transfers to Funds.
             Subtitle B--Climate Change Credit Corporation

Sec. 4201. Establishment.
Sec. 4202. Applicable laws.
Sec. 4203. Board of directors.
                          Subtitle C--Auctions

Sec. 4301. Early auctions.
Sec. 4302. Annual auctions.
                Subtitle D--Energy Technology Deployment

Sec. 4401. In general.
Sec. 4402. Zero- or low-carbon energy technologies deployment.
Sec. 4403. Advanced coal and sequestration technologies program.
Sec. 4404. Fuel from cellulosic biomass.
Sec. 4405. Advanced technology vehicles manufacturing incentive 
                            program.
                      Subtitle E--Energy Consumers

Sec. 4501. Proportions of funding availability.
Sec. 4502. Rural energy assistance program.
           Subtitle F--Climate Change Worker Training Program

Sec. 4601. Funding.
Sec. 4602. Purposes.
Sec. 4603. Establishment.
Sec. 4604. Grants to States.
Sec. 4605. Types of assistance.
 Subtitle G--Adaptation Program for Natural Resources in United States 
                            and Territories

Sec. 4701. Definitions.
Sec. 4702. Adaptation fund.
        Subtitle H--Climate Change and National Security Program

Sec. 4801. Interagency Climate Change and National Security Council.
Sec. 4802. Funding.
                           Subtitle I--Audits

Sec. 4901. Review and audit by Comptroller General of the United 
                            States.
                       TITLE V--ENERGY EFFICIENCY

                    Subtitle A--Appliance Efficiency

Sec. 5101. Residential boilers.
Sec. 5102. Regional variations in heating or cooling standards.
                    Subtitle B--Building Efficiency

Sec. 5201. Updating State building energy efficiency codes.
Sec. 5202. Conforming amendment.
       TITLE VI--GLOBAL EFFORT TO REDUCE GREENHOUSE GAS EMISSIONS

Sec. 6001. Definitions.
Sec. 6002. Purposes.
Sec. 6003. International negotiations.
Sec. 6004. Interagency review.
Sec. 6005. Presidential determinations.
Sec. 6006. International reserve allowance program.
Sec. 6007. Adjustment of international reserve allowance requirements.
                           TITLE VII--REVIEWS

Sec. 7001. National Academy of Sciences Review.
Sec. 7002. Transportation sector review.
Sec. 7003. Adaptation review.
  TITLE VIII--FRAMEWORK FOR GEOLOGICAL SEQUESTRATION OF CARBON DIOXIDE

Sec. 8001. National drinking water regulations.
Sec. 8002. Assessment of geological storage capacity for carbon 
                            dioxide.
Sec. 8003. Study of the feasibility relating to construction of 
                            pipelines and geological carbon dioxide 
                            sequestration activities.
Sec. 8004. Liabilities for closed geological storage sites.
                        TITLE IX--MISCELLANEOUS

Sec. 9001. Paramount interest waiver.
Sec. 9002. Corporate environmental disclosure of climate change risks.
Sec. 9003. Administrative procedure and judicial review.
Sec. 9004. Retention of State authority.
Sec. 9005. Tribal authority.
Sec. 9006. Authorization of appropriations.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) unchecked global warming poses a significant threat 
        to--
                    (A) the national security and economy of the United 
                States;
                    (B) public health and welfare in the United States;
                    (C) the well-being of other countries; and
                    (D) the global environment;
            (2) under the United Nations Framework Convention on 
        Climate Change, done at New York on May 9, 1992, the United 
        States is committed to stabilizing greenhouse gas 
        concentrations in the atmosphere at a level that will prevent 
        dangerous anthropogenic interference with the climate system;
            (3) according to the Fourth Assessment Report of the 
        Intergovernmental Panel on Climate Change, stabilizing 
        greenhouse gas concentrations in the atmosphere at a level that 
        will prevent dangerous interference with the climate system 
        will require a global effort to reduce anthropogenic greenhouse 
        gas emissions worldwide by 50 to 85 percent below 2000 levels 
        by 2050;
            (4) prompt, decisive action is critical, since global 
        warming pollutants can persist in the atmosphere for more than 
        a century;
            (5) the ingenuity of the people of the United States will 
        allow the United States to become a leader in curbing global 
        warming;
            (6) it is possible and desirable to cap greenhouse gas 
        emissions, from sources that together account for the majority 
        of those emissions in the United States, at the current level 
        in 2012, and to lower the cap each year between 2012 and 2050, 
        on the condition that the system includes--
                    (A) cost containment measures;
                    (B) periodic review of requirements;
                    (C) an aggressive program for deploying advanced 
                energy technology;
                    (D) programs to assist low- and middle-income 
                energy consumers; and
                    (E) programs to mitigate the impacts of any 
                unavoidable global climate change;
            (7) Congress may need to update the emissions caps in order 
        to account for continuing scientific data and steps taken, or 
        not taken, by foreign countries;
            (8) accurate emission data and timely compliance with the 
        requirements of the greenhouse gas emission reduction and 
        trading program established under this Act are needed to ensure 
        that reductions are achieved and to provide equity, efficiency, 
        and openness in the market for allowances subject to the 
        program; and
            (9) additional policies external to a cap-and-trade program 
        may be required, including with respect to--
                    (A) the transportation sector, where reducing 
                greenhouse gas emissions requires changes in the 
                vehicle, in the fuels, and in consumer behavior; and
                    (B) the built environment, where reducing direct 
                and indirect greenhouse gas emissions requires changes 
                in buildings, appliances, lighting, heating, cooling, 
                and consumer behavior.

SEC. 3. 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 2007 and 2050 to avert the catastrophic impacts 
        of global climate change; and
            (2) to accomplish that purpose while preserving robust 
        growth in the United States economy and avoiding the imposition 
        of hardship on United States citizens.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Additional and additionality.--The terms ``additional'' 
        and ``additionality'' mean the extent to which reductions in 
        greenhouse gas emissions or increases in sequestration are 
        incremental to business-as-usual, measured as the difference 
        between--
                    (A) baseline greenhouse gas fluxes of an offset 
                project; and
                    (B) greenhouse gas fluxes of the offset project.
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (3) Baseline.--The term ``baseline'' means the greenhouse 
        gas flux or carbon stock that would have occurred in the 
        absence of an offset allowance.
            (4) Biological sequestration; biologically sequestered.--
        The terms ``biological sequestration'' and ``biologically 
        sequestered'' mean--
                    (A) the removal of greenhouse gases from the 
                atmosphere by terrestrial biological means, such as by 
                growing plants; and
                    (B) the storage of those greenhouse gases without 
                reversal in the plants or related soils.
            (5) 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.
            (6) Corporation.--The term ``Corporation'' means the 
        Climate Change Credit Corporation established by section 
        4201(a).
            (7) Covered facility.--The term ``covered facility'' 
        means--
                    (A) any facility within the electric power sector 
                that contains fossil fuel-fired electricity generating 
                units that together emit more than 10,000 carbon 
                dioxide equivalents of greenhouse gas in any year;
                    (B) any facility within the industrial sector that 
                emits more than 10,000 carbon dioxide equivalents of 
                greenhouse gas in any year;
                    (C) any facility that in any year produces, or any 
                entity that in any year imports, petroleum- or coal-
                based transportation fuel, the use of which will emit 
                more than 10,000 carbon dioxide equivalents of 
                greenhouse gas, assuming no capture and permanent 
                sequestration of that gas; or
                    (D) any facility that in any year produces, or any 
                entity that in any year imports, nonfuel chemicals that 
                will emit more than 10,000 carbon dioxide equivalents 
                of greenhouse gas, assuming no capture and destruction 
                or permanent sequestration of that gas.
            (8) 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.
            (9) Electric power sector.--The term ``electric power 
        sector'' means the ``Electric Power Industry'', as that term is 
        used in Table ES-7 of the Environmental Protection Agency 
        document entitled ``Inventory of U.S. Greenhouse Gas Emissions 
        and Sinks: 1990-2005''.
            (10) Emission allowance.--The term ``emission allowance'' 
        means an authorization to emit 1 carbon dioxide equivalent of 
        greenhouse gas.
            (11) Emission allowance account.--The term ``Emission 
        Allowance Account'' means the aggregate of emission allowances 
        that the Administrator establishes for a calendar year.
            (12) Facility.--The term ``facility'' means--
                    (A) a building, structure, or installation located 
                on 1 or more contiguous or adjacent properties of an 
                entity in the United States; and
                    (B) at the option of the Administrator, any 
                activity or operation that 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.
            (13) Fair market value.--The term ``fair market value'' 
        means the average price, in a particular calendar year, of an 
        emission allowance auctioned by the Corporation.
            (14) Geological sequestration; geologically sequestered.--
        The terms ``geological sequestration'' and ``geologically 
        sequestered'' mean the long-term isolation of greenhouse gases, 
        without reversal, in geological formations, in accordance with 
        section 1421(d) of the Safe Drinking Water Act (42 U.S.C. 
        300h(d)).
            (15) Greenhouse gas.--The term ``greenhouse gas'' means any 
        of--
                    (A) carbon dioxide;
                    (B) methane;
                    (C) nitrous oxide;
                    (D) sulfur hexafluoride;
                    (E) a hydrofluorocarbon; or
                    (F) a perfluorocarbon.
            (16) Industrial sector.--The term ``industrial sector'' 
        means ``Industry'', as that term is used in Table ES-7 of the 
        Environmental Protection Agency document entitled ``Inventory 
        of U.S. Greenhouse Gas Emissions and Sinks: 1990-2005''.
            (17) Leakage.--The term ``leakage'' means--
                    (A) a potentially unaccounted increase in 
                greenhouse gas emissions by a facility or entity caused 
                by an offset project that produces an accounted 
                reduction in greenhouse gas emissions; or
                    (B) a potentially unaccounted decrease in 
                sequestration that is caused by an offset project that 
                results in an accounted increase in sequestration.
            (18) Load-serving entity.--The term ``load-serving entity'' 
        means an entity, whether public or private--
                    (A) that has a legal, regulatory, or contractual 
                obligation to deliver electricity to retail consumers; 
                and
                    (B) whose rates and costs are, except in the case 
                of a registered electric cooperative, regulated by a 
                State agency, regulatory commission, municipality, or 
                public utility district.
            (19) New entrant.--The term ``new entrant'' means any 
        facility that commences operation on or after January 1, 2008.
            (20) Offset allowance.--The term ``offset allowance'' means 
        a unit of reduction in the quantity of emissions or an increase 
        in sequestration equal to 1 carbon dioxide equivalent at a 
        facility that is not a covered facility, where the reduction in 
        emissions or increase in sequestration is eligible to be used 
        as an additional means of compliance for the submission 
        requirements established under section 1202.
            (21) Offset project.--The term ``offset project'' means a 
        project, other than a project at a covered facility, that 
        reduces greenhouse gas emissions or increases sequestration of 
        carbon dioxide.
            (22) Project developer.--The term ``project developer'' 
        means an individual or entity implementing an offset project.
            (23) Retail rate for distribution service.--
                    (A) In general.--The term ``retail rate for 
                distribution service'' means the rate that a load-
                serving entity charges for the use of the system of the 
                load-serving entity.
                    (B) Exclusion.--The term ``retail rate for 
                distribution service'' does not include any energy 
                component of the rate.
            (24) 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.
            (25) Reversal.--The term ``reversal'' means an intentional 
        or unintentional loss of sequestered carbon dioxide to the 
        atmosphere.
            (26) Rural electric cooperative.--The term ``rural electric 
        cooperative'' means a cooperatively-owned association that is 
        eligible to receive loans under section 4 of the Rural 
        Electrification Act of 1936 (7 U.S.C. 904).
            (27) Sequestered and sequestration.--The terms 
        ``sequestered'' and ``sequestration'' mean the capture, 
        permanent separation, isolation, or removal of greenhouse gases 
        from the atmosphere.
            (28) State regulatory authority.--The term ``State 
        regulatory authority'' means any State agency that has 
        ratemaking authority with respect to the retail rate for 
        distribution service.
            (29) Transportation sector.--The term ``transportation 
        sector'' means ``Transportation'', as that term is used in 
        Table ES-7 of the Environmental Protection Agency document 
        entitled, ``Inventory of U.S. Greenhouse Gas Emissions and 
        Sinks: 1990-2005''.

               TITLE I--CAPPING GREENHOUSE GAS EMISSIONS

                     Subtitle A--Tracking Emissions

SEC. 1101. PURPOSE.

    The purpose of this subtitle is to establish a Federal greenhouse 
gas registry that--
            (1) is complete, consistent, transparent, and accurate;
            (2) will collect reliable and accurate data that can be 
        used by public and private entities to design efficient and 
        effective energy security initiatives and greenhouse gas 
        emission reduction strategies; and
            (3) will provide appropriate high-quality data to be used 
        for implementing greenhouse gas reduction policies.

SEC. 1102. DEFINITIONS.

    In this subtitle:
            (1) Affected facility.--
                    (A) In general.--The term ``affected facility'' 
                means--
                            (i) a covered facility;
                            (ii) another facility that emits a 
                        greenhouse gas, as determined by the 
                        Administrator; and
                            (iii) at the option of the Administrator, a 
                        vehicle fleet with emissions of more than 
                        10,000 carbon dioxide equivalents per year, 
                        assuming no double-counting of emissions.
                    (B) Exclusions.--The term ``affected facility'' 
                does not include any facility that--
                            (i) is not a covered facility;
                            (ii) is owned or operated by a small 
                        business (as described in part 121 of title 13, 
                        Code of Federal Regulations (or a successor 
                        regulation)); and
                            (iii) emits fewer than 10,000 carbon 
                        dioxide equivalents in any year.
            (2) Carbon content.--The term ``carbon content'' means the 
        quantity of carbon (in carbon dioxide equivalent) contained in 
        a fuel.
            (3) Climate registry.--The term ``Climate Registry'' means 
        the greenhouse gas emissions registry jointly established and 
        managed by more than 40 States and Indian tribes to collect 
        high-quality greenhouse gas emission data from facilities, 
        corporations, and other organizations to support various 
        greenhouse gas emission reporting and reduction policies for 
        the member States and Indian tribes.
            (4) Feedstock fossil fuel.--The term ``feedstock fossil 
        fuel'' means fossil fuel used as raw material in a 
        manufacturing process.
            (5) 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.
            (6) 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).
            (7) Registry.--The term ``Registry'' means the Federal 
        greenhouse gas registry established under section 1105(a).
            (8) Source.--The term ``source'' means any building, 
        structure, installation, unit, point, operation, vehicle, land 
        area, or other item that emits or may emit a greenhouse gas.

SEC. 1103. REPORTING REQUIREMENTS.

    (a) In General.--Subject to this section, each affected facility 
shall submit to the Administrator, for inclusion in the Registry, 
periodic reports, including annual and quarterly data, that--
            (1) include the quantity and type of fossil fuels, 
        including feedstock fossil fuels, that are extracted, produced, 
        refined, imported, exported, or consumed at or by the facility;
            (2) include the quantity of hydrofluorocarbons, 
        perfluorocarbons, sulfur hexafluoride, nitrous oxide, carbon 
        dioxide that has been captured and sequestered, and other 
        greenhouse gases generated, produced, imported, exported, or 
        consumed at or by the facility;
            (3) include the quantity of electricity generated, 
        imported, exported, or consumed by or at the facility, and 
        information on the quantity of greenhouse gases emitted when 
        the imported, exported, or consumed electricity was generated, 
        as determined by the Administrator;
            (4) include the aggregate quantity of all greenhouse gas 
        emissions from sources at the facility, including stationary 
        combustion source emissions, process emissions, and fugitive 
        emissions;
            (5) include greenhouse gas emissions expressed in metric 
        tons of each greenhouse gas emitted and in the quantity of 
        carbon dioxide equivalents of each greenhouse gas emitted;
            (6) include a list and description of sources of greenhouse 
        gas emissions at the facility;
            (7) quantify greenhouse gas emissions in accordance with 
        the measurement standards established under section 1104;
            (8) include other data necessary for accurate and complete 
        accounting of greenhouse gas emissions, as determined by the 
        Administrator;
            (9) include an appropriate certification regarding the 
        accuracy and completeness of reported data, as determined by 
        the Administrator; and
            (10) are submitted electronically to the Administrator, in 
        such form and to such extent as may be required by the 
        Administrator.
    (b) De Minimis Exemptions.--
            (1) In general.--The Administrator may determine--
                    (A) whether certain sources at a facility should be 
                considered to be eligible for a de minimis exemption 
                from a requirement for reporting under subsection (a); 
                and
                    (B) the level of greenhouse gases emitted from a 
                source that would qualify for such an exemption.
            (2) Factors.--In making a determination under paragraph 
        (1), the Administrator shall consider the availability and 
        suitability of simplified techniques and tools for quantifying 
        emissions and the cost to measure those emissions relative to 
        the purposes of this title, including the goal of collecting 
        complete and consistent facility-wide data.
    (c) Verification of Report Required.--Before including the 
information from a report required under this section in the Registry, 
the Administrator shall verify the completeness and accuracy of the 
report using information provided under this section, obtained under 
section 9003(c), or obtained under other provisions of law.
    (d) Timing.--
            (1) Calendar years 2004 through 2007.--For a baseline 
        period of calendar years 2004 through 2007, each affected 
        facility shall submit required annual data described in this 
        section to the Administrator not later than March 31, 2009.
            (2) Subsequent calendar years.--For calendar year 2008 and 
        each subsequent calendar year, each affected facility shall 
        submit quarterly data described in this section to the 
        Administrator not later than 60 days after the end of the 
        applicable quarter.
    (e) No Effect on Other Requirements.--Nothing in this title affects 
any requirement in effect as of the date of enactment of this Act 
relating to the reporting of--
            (1) fossil fuel production, refining, importation, 
        exportation, or consumption data;
            (2) greenhouse gas emission data; or
            (3) other relevant data.

SEC. 1104. DATA QUALITY AND VERIFICATION.

    (a) Protocols and Methods.--
            (1) In general.--The Administrator shall establish by 
        regulation, taking into account the work done by the Climate 
        Registry, comprehensive protocols and methods to ensure the 
        accuracy, completeness, consistency, and transparency of data 
        on greenhouse gas emissions and fossil fuel production, 
        refining, importation, exportation, and consumption submitted 
        to the Registry that include--
                    (A) accounting and reporting standards for fossil 
                fuel production, refining, importation, exportation, 
                and consumption;
                    (B) a requirement that, where technologically 
                feasible, submitted data are monitored using monitoring 
                systems for fuel flow or emissions, such as continuous 
                emission monitoring systems or equivalent systems of 
                similar rigor, accuracy, quality, and timeliness;
                    (C) a requirement that, if a facility has already 
                been directed to monitor emissions of a greenhouse gas 
                using a continuous emission monitoring system under 
                existing law, that system be used in complying with 
                this Act with respect to the greenhouse gas;
                    (D) for cases in which the Administrator determines 
                that monitoring emissions with the precision, 
                reliability, accessibility, and timeliness similar to 
                that provided by a continuous emission monitoring 
                system are not technologically feasible, standardized 
                methods for calculating greenhouse gas emissions in 
                specific industries using other readily available and 
                reliable information, such as fuel consumption, 
                materials consumption, production, or other relevant 
                activity data, on the condition that those methods do 
                not underreport emissions, as compared with the 
                continuous emission monitoring system;
                    (E) information on the accuracy of measurement and 
                calculation methods;
                    (F) methods to avoid double-counting of greenhouse 
                gas emissions;
                    (G) protocols to prevent an affected facility from 
                avoiding the reporting requirements of this title; and
                    (H) protocols for verification of data submitted by 
                affected facilities.
            (2) Best practices.--The protocols and methods developed 
        under paragraph (1) shall incorporate and conform to the best 
        practices from the most recent Federal, State, and 
        international protocols for the measurement, accounting, 
        reporting, and verification of greenhouse gas emissions to 
        ensure the accuracy, completeness, and consistency of the data.
    (b) Verification; Information by Reporting Entities.--Each affected 
facility shall--
            (1) provide information sufficient for the Administrator to 
        verify, in accordance with the protocols and methods developed 
        under subsection (a), that the fossil fuel data and greenhouse 
        gas emission data of the affected facility have been completely 
        and accurately reported; and
            (2) ensure the submission or retention, for the 5-year 
        period beginning on the date of provision of the information, 
        of--
                    (A) data sources;
                    (B) information on internal control activities;
                    (C) information on assumptions used in reporting 
                emissions and fuels;
                    (D) uncertainty analyses; and
                    (E) other relevant data and information to 
                facilitate the verification of reports submitted to the 
                Registry.
    (c) Waiver of Reporting Requirements.--The Administrator may waive 
reporting requirements for specific facilities if the Administrator 
determines that sufficient and equally or more reliable data are 
available under other provisions of law.
    (d) Missing Data.--If information, satisfactory to the 
Administrator, is not provided for an affected facility, the 
Administrator shall--
            (1) prescribe methods to estimate emissions for the 
        facility for each period for which data are missing, reflecting 
        the highest emission levels that may reasonably have occurred 
        during the period for which data are missing; and
            (2) take appropriate enforcement action pursuant to this 
        section and section 9003(b).

SEC. 1105. FEDERAL GREENHOUSE GAS REGISTRY.

    (a) Establishment.--The Administrator shall establish a Federal 
greenhouse gas registry.
    (b) Administration.--In establishing the Registry, the 
Administrator shall--
            (1) design and operate the Registry;
            (2) establish an advisory body that is broadly 
        representative of private enterprise, agriculture, 
        environmental groups, and State, tribal, and local governments 
        to guide the development and management of the Registry;
            (3) provide coordination and technical assistance for the 
        development of proposed protocols and methods, taking into 
        account the duties carried out by the Climate Registry, to be 
        published by the Administrator;
            (4)(A) develop an electronic format for reporting under 
        guidelines established under section 1104(a)(1); and
            (B) make the electronic format available to reporting 
        entities;
            (5) verify and audit the data submitted by reporting 
        entities;
            (6) establish consistent policies for calculating carbon 
        content and greenhouse gas emissions for each type of fossil 
        fuel reported under section 1103;
            (7) calculate carbon content and greenhouse gas emissions 
        associated with the combustion of fossil fuel data reported by 
        reporting entities;
            (8) immediately publish on the Internet all information 
        contained in the Registry, except in any case in which 
        publishing the information would result in a disclosure of--
                    (A) information vital to national security, as 
                determined by the President; or
                    (B) confidential business information that cannot 
                be derived from information that is otherwise publicly 
                available and that would cause significant calculable 
                competitive harm if published (except that information 
                relating to greenhouse gas emissions shall not be 
                considered to be confidential business information).
    (c) Third-Party Verification.--The Administrator may use the 
services of third parties that have no conflicts of interest to verify 
reports required under section 1103.
    (d) Regulations.--The Administrator shall--
            (1) not later than 180 days after the date of enactment of 
        this Act, propose regulations to carry out this section; and
            (2) not later than July 1, 2008, promulgate final 
        regulations to carry out this section.

SEC. 1106. ENFORCEMENT.

    (a) Civil Actions.--The Administrator may bring a civil action in 
United States district court against the owner or operator of an 
affected facility that fails to comply with any requirement of this 
subtitle.
    (b) Penalty.--Any person that has violated or is violating this 
subtitle shall be subject to a civil penalty of not more than $25,000 
per day of each violation.

                     Subtitle B--Reducing Emissions

SEC. 1201. EMISSION ALLOWANCE ACCOUNT.

    (a) In General.--The Administrator shall establish a separate 
quantity of emission allowances for each of calendar years 2012 through 
2050.
    (b) Identification Numbers.--The Administrator shall assign to each 
emission allowance established under subsection (a) a unique 
identification number that includes the calendar year for which that 
emission allowance was established.
    (c) Legal Status of Emission Allowances.--
            (1) In general.--An emission allowance shall not be a 
        property right.
            (2) Termination or limitation.--Nothing in this Act 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 Act 
        relating to emission allowances shall affect the application 
        of, or compliance with, any other provision of law to or by a 
        covered facility.
    (d) Allowances for Each Calendar Year.--The numbers of emission 
allowances established by the Administrator for each of calendar years 
2012 through 2050 shall be as follows:


----------------------------------------------------------------------------------------------------------------
                                                                              Number of Emission Allowances (in
                               Calendar Year                                              Millions)
----------------------------------------------------------------------------------------------------------------
2012                                                                                                      5,200
----------------------------------------------------------------------------------------------------------------
2013                                                                                                      5,104
----------------------------------------------------------------------------------------------------------------
2014                                                                                                      5,008
----------------------------------------------------------------------------------------------------------------
2015                                                                                                      4,912
----------------------------------------------------------------------------------------------------------------
2016                                                                                                      4,816
----------------------------------------------------------------------------------------------------------------
2017                                                                                                      4,720
----------------------------------------------------------------------------------------------------------------
2018                                                                                                      4,624
----------------------------------------------------------------------------------------------------------------
2019                                                                                                      4,528
----------------------------------------------------------------------------------------------------------------
2020                                                                                                      4,432
----------------------------------------------------------------------------------------------------------------
2021                                                                                                      4,336
----------------------------------------------------------------------------------------------------------------
2022                                                                                                      4,240
----------------------------------------------------------------------------------------------------------------
2023                                                                                                      4,144
----------------------------------------------------------------------------------------------------------------
2024                                                                                                      4,048
----------------------------------------------------------------------------------------------------------------
2025                                                                                                      3,952
----------------------------------------------------------------------------------------------------------------
2026                                                                                                      3,856
----------------------------------------------------------------------------------------------------------------
2027                                                                                                      3,760
----------------------------------------------------------------------------------------------------------------
2028                                                                                                      3,664
----------------------------------------------------------------------------------------------------------------
2029                                                                                                      3,568
----------------------------------------------------------------------------------------------------------------
2030                                                                                                      3,472
----------------------------------------------------------------------------------------------------------------
2031                                                                                                      3,376
----------------------------------------------------------------------------------------------------------------
2032                                                                                                      3,280
----------------------------------------------------------------------------------------------------------------
2033                                                                                                      3,184
----------------------------------------------------------------------------------------------------------------
2034                                                                                                      3,088
----------------------------------------------------------------------------------------------------------------
2035                                                                                                      2,992
----------------------------------------------------------------------------------------------------------------
2036                                                                                                      2,896
----------------------------------------------------------------------------------------------------------------
2037                                                                                                      2,800
----------------------------------------------------------------------------------------------------------------
2038                                                                                                      2.704
----------------------------------------------------------------------------------------------------------------
2039                                                                                                      2,608
----------------------------------------------------------------------------------------------------------------
2040                                                                                                      2,512
----------------------------------------------------------------------------------------------------------------
2041                                                                                                      2,416
----------------------------------------------------------------------------------------------------------------
2042                                                                                                      2,320
----------------------------------------------------------------------------------------------------------------
2043                                                                                                      2,224
----------------------------------------------------------------------------------------------------------------
2044                                                                                                      2,128
----------------------------------------------------------------------------------------------------------------
2045                                                                                                      2,032
----------------------------------------------------------------------------------------------------------------
2046                                                                                                      1,936
----------------------------------------------------------------------------------------------------------------
2047                                                                                                      1,840
----------------------------------------------------------------------------------------------------------------
2048                                                                                                      1,744
----------------------------------------------------------------------------------------------------------------
2049                                                                                                      1,646
----------------------------------------------------------------------------------------------------------------
2050                                                                                                      1,560
----------------------------------------------------------------------------------------------------------------

SEC. 1202. 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 
Administrator an emission allowance, an offset allowance awarded 
pursuant to subtitle D of title II, or an international allowance or 
credit obtained in compliance with regulations promulgated under 
section 2502, for each carbon dioxide equivalent of greenhouse gas 
that--
            (1) was emitted by that facility during the preceding year;
            (2) will, assuming no capture and permanent geological 
        sequestration of that gas, be emitted from the use of any 
        petroleum- or coal-based transportation fuel that was produced 
        or imported at that facility during the preceding year; and
            (3) will, assuming no capture and destruction or permanent 
        geological sequestration of that gas, be emitted from any 
        nonfuel chemical that was produced or imported at that facility 
        during the preceding year.
    (b) Retirement of Allowances.--Immediately upon receipt of an 
emission allowance under subsection (a), the Administrator shall retire 
the emission allowance.
    (c) Determination of Compliance.--Not later than July 1 of each 
year, the Administrator shall determine whether the owners and 
operators of all covered facilities are in full compliance with 
subsection (a) for the preceding year.

SEC. 1203. PENALTY FOR NONCOMPLIANCE.

    (a) Excess Emissions Penalty.--
            (1) In general.--The owner or operator of any covered 
        facility that fails for any year to submit to the Administrator 
        by the deadline described in section 1202(a) or 2303, 1 or more 
        of the emission allowances due pursuant to either of those 
        sections shall be liable for the payment to the Administrator 
        of an excess emissions penalty.
            (2) Amount.--The amount of an excess emissions penalty 
        required to be paid under paragraph (1) shall be, as determined 
        by the Administrator, an amount equal to the product obtained 
        by multiplying--
                    (A) the number of excess emission allowances that 
                the owner or operator failed to submit; and
                    (B) the greater of--
                            (i) $200; or
                            (ii) a dollar figure representing 3 times 
                        the mean market value of an emission allowance 
                        during the calendar year for which the emission 
                        allowances were due.
            (3) Timing.--An excess emissions penalty required under 
        this subsection shall be immediately due and payable to the 
        Administrator, without demand, in accordance with such 
        regulations as shall be promulgated by the Administrator by the 
        date that is 1 year after the date of enactment of this Act.
            (4) Deposit.--The Administrator shall deposit each excess 
        emissions penalty paid under this subsection in the Treasury of 
        the United States.
            (5) No effect on liability.--An excess emissions penalty 
        due and payable by the owner or operator of a covered facility 
        under this subsection shall not diminish the liability of the 
        owner or operator for any fine, penalty, or assessment against 
        the owner or operator for the same violation under any other 
        provision of this Act or any other law.
    (b) Excess Emission Allowance.--
            (1) In general.--The owner or operator of a covered 
        facility that fails for any year to submit to the Administrator 
        by the deadline described in section 1202(a) or 2303 1 or more 
        of the emission allowances due pursuant to either of those 
        sections shall be liable to offset the excess emissions by an 
        equal quantity, in tons, during--
                    (A) the following calendar year; or
                    (B) such longer period as the Administrator may 
                prescribe.
            (2) Plan.--
                    (A) In general.--Not later than 60 days after the 
                end of the calendar year during which a covered 
                facility emits excess emissions, the owner or operator 
                of the covered facility shall submit to the 
                Administrator, and to the State in which the covered 
                facility is located, a proposed plan to achieve the 
                required offsets for the excess emissions.
                    (B) Condition of operation.--Upon approval of a 
                proposed plan described in subparagraph (A) by the 
                Administrator, the plan, as submitted, modified, or 
                conditioned, shall be considered to be a condition of 
                the operating permit for the covered facility, without 
                further review or revision of the permit.
                    (C) Deduction of allowances.--For each covered 
                facility that, in any calendar year, emits excess 
                emissions, the Administrator shall deduct, from 
                emission allowances allocated to the covered facility 
                for the calendar year, or for succeeding years during 
                which offsets are required, emission allowances equal 
                to the excess quantity, in tons, of the excess 
                emissions.
    (c) Prohibition.--It shall be unlawful for the owner or operator of 
any facility liable for a penalty and offset under this section to 
fail--
            (1) to pay the penalty in accordance with this section;
            (2) to provide, and thereafter comply with, a proposed plan 
        for compliance as required by subsection (b)(2); and
            (3) to offset excess emissions as required by subsection 
        (b)(1).
    (d) No Effect on Other Section.--Nothing in this subtitle limits or 
otherwise affects the application of section 9003(b).

          TITLE II--MANAGING AND CONTAINING COSTS EFFICIENTLY

                          Subtitle A--Trading

SEC. 2101. SALE, EXCHANGE, AND RETIREMENT OF EMISSION ALLOWANCES.

    Except as otherwise provided in this Act, the lawful holder of an 
emission allowance may sell, exchange, transfer, submit for compliance 
in accordance with section 1202, or retire the emission allowance.

SEC. 2102. NO RESTRICTION ON TRANSACTIONS.

    The privilege of purchasing, holding, selling, exchanging, and 
retiring emission allowances shall not be restricted to the owners and 
operators of covered facilities.

SEC. 2103. ALLOWANCE TRANSFER SYSTEM.

    (a) In General.--Not later than 18 months after the date of 
enactment of this Act, the Administrator shall promulgate regulations 
to carry out the provisions of this Act relating to emission 
allowances, including regulations providing that the transfer of 
emission allowances 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 Administrator in 
accordance with those regulations.
    (b) Transfers.--
            (1) In general.--The regulations promulgated under 
        subsection (a) shall permit the transfer of allowances prior to 
        the issuance of the allowances.
            (2) Deduction and addition of transfers.--A recorded pre-
        allocation transfer of allowances shall be--
                    (A) deducted by the Administrator from the number 
                of allowances that would otherwise be distributed to 
                the transferor; and
                    (B) added to those allowances distributed to the 
                transferee.

SEC. 2104. ALLOWANCE TRACKING SYSTEM.

    The regulations promulgated under section 2103(a) shall include a 
system for issuing, recording, and tracking emission allowances that 
shall specify all necessary procedures and requirements for an orderly 
and competitive functioning of the emission allowance system.

                          Subtitle B--Banking

SEC. 2201. INDICATION OF CALENDAR YEAR.

    An emission allowance submitted to the Administrator by the owner 
or operator of a covered facility in accordance with section 1202(a) 
shall not be required to indicate in the identification number of the 
emission allowance the calendar year for which the emission allowance 
is submitted.

SEC. 2202. EFFECT OF TIME.

    The passage of time shall not, by itself, cause an emission 
allowance to be retired or otherwise diminish the compliance value of 
the emission allowance.

                         Subtitle C--Borrowing

SEC. 2301. REGULATIONS.

    (a) In General.--Not later than 3 years after the date of enactment 
of this Act, the Administrator shall promulgate regulations under 
which, subject to subsection (b), the owner or operator of a covered 
facility may--
            (1) borrow emission allowances from the Administrator; and
            (2) for a calendar year, submit borrowed emission 
        allowances to the Administrator in satisfaction of up to 15 
        percent of the compliance obligation under section 1202(a).
    (b) Limitation.--An emission allowance borrowed under subsection 
(a) shall be an emission allowance established by the Administrator for 
a specific future calendar year under subsection 1201(a).

SEC. 2302. TERM.

    The owner or operator of a covered facility shall not submit, and 
the Administrator shall not accept, a borrowed emission allowance in 
partial satisfaction of the compliance obligation under section 1202(a) 
for any calendar year that is more than 5 years earlier than the 
calendar year included in the identification number of the borrowed 
emission allowance.

SEC. 2303. REPAYMENT WITH INTEREST.

    For each borrowed emission allowance submitted in partial 
satisfaction of the compliance obligation under subsection 1202(a) for 
a particular calendar year (referred to in this section as the ``use 
year''), the number of emission allowances that the owner or operator 
is required to submit under section 1202(a) for the year from which the 
borrowed emission allowance was taken (referred to in this section as 
the ``source year'') shall be increased by an amount equal to the 
product obtained by multiplying--
            (1) 1.1; and
            (2) the number of years beginning after the use year and 
        before the source year.

                          Subtitle D--Offsets

SEC. 2401. OUTREACH INITIATIVE ON REVENUE ENHANCEMENT FOR AGRICULTURAL 
              PRODUCERS.

    (a) Establishment.--The Secretary of Agriculture, acting through 
the Chief of the Natural Resources Conservation Service, the Chief of 
the Forest Service, the Administrator of the Cooperative State 
Research, Education, and Extension Service, and land-grant colleges and 
universities, in consultation with the Administrator and the heads of 
other appropriate departments and agencies, shall establish an outreach 
initiative to provide information to agricultural producers, 
agricultural organizations, foresters, and other landowners about 
opportunities under this subtitle to earn new revenue.
    (b) Components.--The initiative under this section--
            (1) shall be designed to ensure that, to the maximum extent 
        practicable, agricultural organizations and individual 
        agricultural producers, foresters, and other landowners receive 
        detailed practical information about--
                    (A) opportunities to earn new revenue under this 
                subtitle;
                    (B) measurement protocols, monitoring, verifying, 
                inventorying, registering, insuring, and marketing 
                offsets under this title;
                    (C) emerging domestic and international markets for 
                energy crops, allowances, and offsets; and
                    (D) local, regional, and national databases and 
                aggregation networks to facilitate achievement, 
                measurement, registration, and sales of offsets;
            (2) shall provide--
                    (A) outreach materials, including the handbook 
                published under subsection (c), to interested parties;
                    (B) workshops; and
                    (C) technical assistance; and
            (3) may include the creation and development of regional 
        marketing centers or coordination with existing centers 
        (including centers within the Natural Resources Conservation 
        Service or the Cooperative State Research, Education, and 
        Extension Service or at land-grant colleges and universities).
    (c) Handbook.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the Secretary of Agriculture, in 
        consultation with the Administrator and after an opportunity 
        for public comment, shall publish a handbook for use by 
        agricultural producers, agricultural cooperatives, foresters, 
        other landowners, offset buyers, and other stakeholders that 
        provides easy-to-use guidance on achieving, reporting, 
        registering, and marketing offsets.
            (2) Distribution.--The Secretary of Agriculture shall 
        ensure, to the maximum extent practicable, that the handbook--
                    (A) is made available through the Internet and in 
                other electronic media;
                    (B) includes, with respect to the electronic form 
                of the handbook described in subparagraph (A), 
                electronic forms and calculation tools to facilitate 
                the petition process described in section 2404; and
                    (C) is distributed widely through land-grant 
                colleges and universities and other appropriate 
                institutions.

SEC. 2402. ESTABLISHMENT OF DOMESTIC OFFSET PROGRAM.

    (a) Alternative Means of Compliance.--Beginning with calendar year 
2012, the owner or operator of a covered entity may satisfy 15 percent 
of the total allowance submission requirement of the covered entity 
under section 1202(a) by submitting offset allowances generated in 
accordance with this subtitle.
    (b) Regulations Required.--Not later than 18 months after the date 
of enactment of this Act, the Administrator, in consultation with the 
Secretary of Agriculture, shall promulgate regulations authorizing the 
issuance and certification of offset allowances from certain 
agricultural, forestry, and other land use-related projects undertaken 
within the United States, and certain other projects identified by the 
Administrator under section 2403(b)(4), including provisions that--
            (1) ensure that those offsets represent real, verifiable, 
        additional, permanent, and enforceable reductions in greenhouse 
        gas emissions or increases in biological sequestration;
            (2) specify the types of offset projects eligible to 
        generate offset allowances, in accordance with section 2403;
            (3) establish procedures for project initiation and 
        approval, in accordance with section 2404;
            (4) establish procedures to monitor, quantify, and discount 
        reductions in greenhouse gas emissions or increases in 
        biological sequestration, in accordance with subsections (d) 
        through (g) of section 2404;
            (5) establish procedures for verification, registration, 
        and issuance of offset allowances, in accordance with section 
        2405; and
            (6) ensure permanence of offsets by mitigating and 
        compensating for reversals, in accordance with section 2406.
    (c) Offset Allowances Awarded.--The Administrator shall issue 
offset allowances for qualifying emission reductions and biological 
sequestrations from offset projects that satisfy the applicable 
requirements of this subtitle.
    (d) Ownership.--Initial ownership of an offset allowance shall lie 
with a project developer, unless otherwise specified in a legally-
binding contract or agreement.
    (e) Transferability.--An offset allowance generated pursuant to 
this subtitle may be sold, traded, or transferred, on the conditions 
that--
            (1) the offset allowance has not expired or been retired or 
        canceled; and
            (2) liability and responsibility for mitigating and 
        compensating for reversals of registered offset allowances is 
        specified in accordance with section 2406(b).

SEC. 2403. ELIGIBLE AGRICULTURAL AND FORESTRY OFFSET PROJECT TYPES.

    (a) In General.--Offset allowances from agricultural, forestry, and 
other land use-related projects shall be limited to those allowances 
achieving an offset of 1 or more greenhouse gases by a method other 
than a reduction of combustion of greenhouse gas-emitting fuel.
    (b) Categories of Eligible Agricultural, Forestry, and Other Land 
Use-Related Projects.--Subject to the requirements promulgated pursuant 
to section 2402(b), the types of operations eligible to generate offset 
allowances under this subtitle include--
            (1) agricultural and rangeland sequestration and management 
        practices, including--
                    (A) altered tillage practices;
                    (B) winter cover cropping, continuous cropping, and 
                other means to increase biomass returned to soil in 
                lieu of planting followed by fallowing;
                    (C) conversion of cropland to rangeland or 
                grassland, on the condition that the land has been in 
                nonforest use for at least 10 years before the date of 
                initiation of the project;
                    (D) reduction of nitrogen fertilizer use or 
                increase in nitrogen use efficiency;
                    (E) reduction in the frequency and duration of 
                flooding of rice paddies; and
                    (F) reduction in carbon emissions from organic 
                soils;
            (2) changes in carbon stocks attributed to land use change 
        and forestry activities limited to--
                    (A) afforestation or reforestation of acreage not 
                forested as of the date of enactment of this Act; and
                    (B) forest management resulting in an increase in 
                forest stand volume;
            (3) manure management and disposal, including--
                    (A) waste aeration; and
                    (B) methane capture and combustion;
            (4) subject to the requirements of this subtitle, any other 
        terrestrial offset practices identified by the Administrator, 
        including--
                    (A) the capture or reduction of noncovered fugitive 
                emissions;
                    (B) methane capture and combustion at 
                nonagricultural facilities; and
                    (C) other actions that result in the avoidance or 
                reduction of greenhouse gas emissions in accordance 
                with section 2402; and
            (5) combinations of any of the offset practices described 
        in paragraphs (1) through (4).
    (c) Exclusion.--A project participating in a Federal, State, or 
local cost-sharing, competitive grant, or technical assistance program 
shall not be eligible to generate offset allowances under this 
subtitle.
    (d) Earned Allowances.--
            (1) In general.--Any project approved by the Administrator 
        shall earn offset allowances in proportion to the private 
        investment in the project, as described in paragraph (2).
            (2) Private investment.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the private share of investment in the project 
                shall be assumed to be 50 percent.
                    (B) Demonstration of investment.--Subparagraph (A) 
                shall not apply in any case in which a project elects 
                to demonstrate the private share of investment in the 
                project in accordance with rules established by the 
                Administrator.

SEC. 2404. PROJECT INITIATION AND APPROVAL.

    (a) Project Approval.--A project developer--
            (1) may submit a petition for offset project approval at 
        any time following the effective date of regulations 
        promulgated under section 2402(b); but
            (2) may not register or issue offset allowances until such 
        approval is received and until after the emission reductions or 
        sequestrations supporting the offset allowances have actually 
        occurred.
    (b) Petition Process.--Prior to offset registration and issuance of 
offset allowances, a project developer shall submit a petition to the 
Administrator, consisting of--
            (1) a copy of the monitoring and quantification plan 
        prepared for the offset project, as described under subsection 
        (d);
            (2) a greenhouse gas initiation certification, as described 
        under subsection (e); and
            (3) subject to the requirements of this subtitle, any other 
        information identified by the Administrator as necessary to 
        meet the objectives of this subtitle.
    (c) Approval and Notification.--
            (1) In general.--Not later than 180 days after the date on 
        which the Administrator receives a complete petition under 
        subsection (b), the Administrator shall--
                    (A) determine whether the monitoring and 
                quantification plan satisfies the applicable 
                requirements of this subtitle;
                    (B) determine whether the greenhouse gas initiation 
                certification indicates a significant deviation in 
                accordance with subsection (e)(3);
                    (C) notify the project developer of the 
                determinations under subparagraphs (A) and (B); and
                    (D) issue offset allowances for approved projects.
            (2) Appeal.--The Administrator shall establish mechanisms 
        for appeal and review of determinations made under this 
        subsection.
    (d) Monitoring and Quantification.--
            (1) In general.--A project developer shall make use of the 
        standardized tools and methods described in this section to 
        monitor, quantify, and discount reductions in greenhouse gas 
        emissions or increases in sequestration.
            (2) Monitoring and quantification plan.--A monitoring and 
        quantification plan shall be used to monitor, quantify, and 
        discount reductions in greenhouse gas emissions or increases in 
        sequestration as described by this subsection.
            (3) Plan completion and retention.--A monitoring and 
        quantification plan shall be--
                    (A) completed for all offset projects prior to 
                offset project initiation; and
                    (B) retained by the project developer for the 
                duration of the offset project.
            (4) Plan requirements.--Subject to section 2402, the 
        Administrator shall specify the required components of a 
        monitoring and quantification plan, including--
                    (A) a description of the offset project, including 
                project type;
                    (B) a determination of accounting periods;
                    (C) an assignment of reporting responsibility;
                    (D) the contents and timing of public reports, 
                including summaries of the original data, as well as 
                the results of any analyses;
                    (E) a delineation of project boundaries, based on 
                methods and formats determined to be acceptable to the 
                Administrator;
                    (F) a description of which of the monitoring and 
                quantification tools developed under subsection (f) are 
                to be used to monitor and quantify changes in 
                greenhouse gas fluxes or carbon stocks associated with 
                a project;
                    (G) a description of which of the standardized 
                methods developed under subsection (g) to be used to 
                determine additionality, estimate the baseline carbon, 
                and discount for leakage;
                    (H) based on the standardized methods chosen in 
                subparagraphs (F) and (G), a determination of 
                uncertainty in accordance with subsection (h);
                    (I) what site-specific data, if any, will be used 
                in monitoring, quantification, and the determination of 
                discounts;
                    (J) a description of procedures for use in managing 
                and storing data, including quality-control standards 
                and methods, such as redundancy in case records are 
                lost; and
                    (K) subject to the requirements of this subtitle, 
                any other information identified by the Administrator 
                as being necessary to meet the objectives of this 
                subtitle.
    (e) Greenhouse Gas Initiation Certification.--
            (1) In general.--In reviewing a petition submitted under 
        subsection (b), the Administrator shall seek to exclude each 
        activity that undermines the integrity of the offset program 
        established under this subtitle, such as the conversion or 
        clearing of land, or marked change in management regime, in 
        anticipation of offset project initiation.
            (2) Greenhouse gas initiation certification requirements.--
        A greenhouse gas initiation certification developed under this 
        subsection shall include--
                    (A) the estimated greenhouse gas flux or carbon 
                stock for the offset project for each of the 4 complete 
                calendar years preceding the effective date of the 
                regulations promulgated under section 2402(b); and
                    (B) the estimated greenhouse gas flux or carbon 
                stock for the offset project, averaged across each of 
                the 4 calendar years preceding the effective date of 
                the regulations promulgated under section 2402(b).
            (3) Determination of significant deviation.--Based on 
        standards developed by the Administrator--
                    (A) each greenhouse gas initiation certification 
                submitted pursuant to this section shall be reviewed; 
                and
                    (B) a determination shall be made as to whether, as 
                a result of activities or behavior inconsistent with 
                the purposes of this title, a significant deviation 
                exists between the average annual greenhouse gas flux 
                or carbon stock and the greenhouse gas flux or carbon 
                stock for a given year.
    (f) Development of Monitoring and Quantification Tools for 
Agricultural and Forestry Projects.--
            (1) In general.--Subject to section 2402(b), the 
        Administrator, in consultation with the Secretary of 
        Agriculture, shall develop standardized tools for use in the 
        monitoring and quantification of changes in greenhouse gas 
        fluxes or carbon stocks for each offset project type listed 
        under section 2403(b).
            (2) Tool development.--The tools used to monitor and 
        quantify changes in greenhouse gas fluxes or carbon stocks 
        shall, for each project type, include applicable--
                    (A) statistically-sound field and remote sensing 
                sampling methods, procedures, techniques, protocols, or 
                programs;
                    (B) models, factors, equations, or look-up tables; 
                and
                    (C) any other process or tool considered to be 
                acceptable by the Administrator, in consultation with 
                the Secretary of Agriculture.
    (g) Development of Accounting and Discounting Methods.--
            (1) In general.--The Administrator, in consultation with 
        the Secretary of Agriculture, shall--
                    (A) develop standardized methods for use in 
                accounting for additionality and uncertainty, 
                estimating the baseline, and discounting for leakage 
                for each offset project type listed under section 
                2403(b); and
                    (B) require that leakage be subtracted from 
                reductions in greenhouse gas emissions or increases in 
                sequestration attributable to a project.
            (2) Additionality determination and baseline estimation.--
        The standardized methods used to determine additionality and 
        establish baselines shall, for each project type, at a 
        minimum--
                    (A) in the case of a sequestration project, 
                determine the greenhouse gas flux and carbon stock on 
                comparable land identified on the basis of--
                            (i) similarity in current management 
                        practices;
                            (ii) similarity of regional, State, or 
                        local policies or programs; and
                            (iii) similarity in geographical and 
                        biophysical characteristics;
                    (B) in the case of an emission reduction project, 
                use as a basis emissions from preexisting or comparable 
                facilities; and
                    (C) in the case of a sequestration project or 
                emission reduction project, specify a selected time 
                period.
            (3) Leakage.--The standardized methods used to determine 
        and discount for leakage shall, at a minimum, take into 
        consideration--
                    (A) the scope of the offset system in terms of 
                activities and geography covered;
                    (B) the markets relevant to the offset project;
                    (C) emission intensity per unit of production, both 
                inside and outside of the offset project; and
                    (D) a time period sufficient in length to yield a 
                stable leakage rate.
    (h) Uncertainty for Agricultural and Forestry Projects.--
            (1) In general.--The Administrator, in consultation with 
        the Secretary of Agriculture, shall develop standardized 
        methods for use in determining and discounting for uncertainty 
        for each offset project type listed under section 2403(b).
            (2) Basis.--The standardized methods used to determine and 
        discount for uncertainty shall be based on--
                    (A) the robustness and rigor of the methods used by 
                a project developer to monitor and quantify changes in 
                greenhouse gas fluxes or carbon stocks;
                    (B) the robustness and rigor of methods used by a 
                project developer to determine additionality and 
                leakage; and
                    (C) an exaggerated proportional discount that 
                increases relative to uncertainty, as determined by the 
                Administrator, to encourage better measurement and 
                accounting.
    (i) Acquisition of New Data and Review of Methods for Agricultural 
and Forestry Projects.--The Administrator, in consultation with the 
Secretary of Agriculture, shall--
            (1) establish a comprehensive field sampling program to 
        improve the scientific bases on which the standardized tools 
        and methods developed under this section are based; and
            (2) review and revise the standardized tools and methods 
        developed under this section, based on--
                    (A) validation of existing methods, protocols, 
                procedures, techniques, factors, equations, or models;
                    (B) development of new methods, protocols, 
                procedures, techniques, factors, equations, or models;
                    (C) increased availability of field data or other 
                datasets; and
                    (D) any other information identified by the 
                Administrator, in consultation with the Secretary of 
                Agriculture, that is necessary to meet the objectives 
                of this subtitle.
    (j) Exclusion.--No activity for which any emission allowances are 
received under subtitle G of title III shall generate offset allowances 
under this subtitle.

SEC. 2405. OFFSET VERIFICATION AND ISSUANCE OF ALLOWANCES FOR 
              AGRICULTURAL AND FORESTRY PROJECTS.

    (a) In General.--Offset allowances may be claimed for net emission 
reductions or increases in sequestration annually, after accounting for 
any necessary discounts in accordance with section 2404, by submitting 
a verification report for an offset project to the Administrator.
    (b) Offset Verification.--
            (1) Scope of verification.--A verification report for an 
        offset project shall--
                    (A) be completed by a verifier accredited in 
                accordance with paragraph (3); and
                    (B) shall be developed taking into consideration--
                            (i) the information and methodology 
                        contained within a monitoring and 
                        quantification plan;
                            (ii) data and subsequent analysis of the 
                        offset project, including--
                                    (I) quantification of net emission 
                                reductions or increases in 
                                sequestration;
                                    (II) determination of 
                                additionality;
                                    (III) calculation of leakage;
                                    (IV) assessment of permanence;
                                    (V) discounting for uncertainty; 
                                and
                                    (VI) the adjustment of net emission 
                                reductions or increases in 
                                sequestration by the discounts 
                                determined under clauses (II) through 
                                (V); and
                            (iii) subject to the requirements of this 
                        subtitle, any other information identified by 
                        the Administrator as being necessary to achieve 
                        the purposes of this subtitle.
            (2) Verification report requirements.--The Administrator 
        shall specify the required components of a verification report, 
        including--
                    (A) the quantity of offsets generated;
                    (B) the amount of discounts applied;
                    (C) an assessment of methods (and the 
                appropriateness of those methods);
                    (D) an assessment of quantitative errors or 
                omissions (and the effect of the errors or omissions on 
                offsets);
                    (E) any potential conflicts of interest between a 
                verifier and project developer; and
                    (F) any other provision that the Administrator 
                considers to be necessary to achieve the purposes of 
                this subtitle.
            (3) Verifier accreditation.--
                    (A) In general.--Not later than 18 months after the 
                date of enactment of this Act, the Administrator shall 
                promulgate regulations establishing a process and 
                requirements for accreditation by a third-party 
                verifier that has no conflicts of interest.
                    (B) Public accessibility.--Each verifier meeting 
                the requirements for accreditation in accordance with 
                this paragraph shall be listed in a publicly-accessible 
                database, which shall be maintained and updated by the 
                Administrator.
    (c) Registration and Awarding of Offsets.--
            (1) In general.--Not later than 90 days after the date on 
        which the Administrator receives a complete petition required 
        under section 2404(b), the Administrator shall--
                    (A) determine whether the offsets satisfy the 
                applicable requirements of this subtitle; and
                    (B) notify the project developer of that 
                determination.
            (2) Affirmative determination.--In the case of an 
        affirmative determination under paragraph (1), the 
        Administrator shall--
                    (A) register the offset allowances in accordance 
                with this subtitle; and
                    (B) issue the offset allowances.
            (3) Appeal and review.--The Administrator shall establish 
        mechanisms for the appeal and review of determinations made 
        under this subsection.

SEC. 2406. TRACKING OF REVERSALS FOR SEQUESTRATION PROJECTS.

    (a) Reversal Certification.--
            (1) In general.--Subject to section 2402, the Administrator 
        shall promulgate regulations requiring the submission of a 
        reversal certification for each offset project on an annual 
        basis following the registration of offset allowances.
            (2) Requirements.--A reversal certification submitted in 
        accordance with this subsection shall state--
                    (A) whether any unmitigated reversal relating to 
                the offset project has occurred in the year preceding 
                the year in which the certification is submitted; and
                    (B) the quantity of each unmitigated reversal.
    (b) Effect on Offset Allowances.--
            (1) Invalidity.--The Administrator shall declare invalid 
        all offset allowances issued for any offset project that has 
        undergone a complete reversal.
            (2) Partial reversal.--In the case of an offset project 
        that has undergone a partial reversal, the Administrator shall 
        render invalid offset allowances issued for the offset project 
        in direct proportion to the degree of reversal.
    (c) Accountability for Reversals.--Liability and responsibility for 
compensation of a reversal of a registered offset allowance under 
subsection (a) shall lie with the person that submitted the offset 
allowance to the Administrator for the purpose of compliance with 
section 1202(a), unless otherwise specified in a legally-binding 
contract or agreement.
    (d) Compensation for Reversals.--The unmitigated reversal of 1 or 
more registered offset allowances shall require the submission of--
            (1) an equal number of offset allowances; or
            (2) a combination of offset allowances and emission 
        allowances equal to the unmitigated reversal.
    (e) Adjustment of Baseline.--
            (1) In general.--If the Administrator determines that, as a 
        result of activities or behavior that is inconsistent with the 
        purposes of this subtitle, a significant deviation exists 
        between the average annual greenhouse gas flux or carbon stock 
        for a given year pursuant to the certification submitted under 
        subsection (a), the baseline for that project shall be adjusted 
        by a quantity equal to the difference between--
                    (A) the estimated greenhouse gas flux or carbon 
                stock at the end of the year prior to the year in which 
                the significant deviation occurred; and
                    (B) the estimated greenhouse gas flux or carbon 
                stock at the end of the year in which the significant 
                deviation occurred.
            (2) Project termination.--A project developer may cease 
        participation in the domestic offset program established under 
        this subtitle at any time, on the condition that any registered 
        allowances awarded for increases in sequestration have been 
        compensated for by the project developer through the submission 
        of an equal number of offset allowances.

SEC. 2407. EXAMINATIONS.

    (a) Regulations.--Not later than 2 years after the date of 
enactment of this Act, the Administrator shall promulgate regulations 
governing the examination and auditing of offset allowances.
    (b) Requirements.--The regulations promulgated under this section 
shall specifically consider--
            (1) principles for initiating and conducting examinations;
            (2) the type or scope of examinations, including--
                    (A) reporting and recordkeeping; and
                    (B) site review or visitation;
            (3) the rights and privileges of an examined party; and
            (4) the establishment of an appeal process.

SEC. 2408. TIMING AND THE PROVISION OF OFFSET ALLOWANCES.

    (a) Initiation of Offset Projects.--An offset project that 
commences operation on or after the effective date of regulations 
promulgated under section 2407(a) shall be eligible to generate offset 
allowances under this subtitle if the offset project meets the other 
applicable requirements of this subtitle.
    (b) Pre-Existing Projects.--
            (1) In general.--The Administrator may allow for the 
        transition into the Registry of offset projects and banked 
        offset allowances operating under other Federal, State, or 
        private reporting programs or registries as of the effective 
        date of regulations promulgated under section 2407(a) if the 
        Administrator determines that the offset projects and banked 
        offset allowances satisfy the applicable requirements of this 
        subtitle.
            (2) Exception.--An offset allowance that is expired, 
        retired, or canceled under any other offset program, registry, 
        or market as of the effective date of regulations promulgated 
        under section 2407(a) shall be ineligible for transition into 
        the Registry.

SEC. 2409. OFFSET REGISTRY.

    In addition to the requirements established by section 2404, an 
offset allowance registered under this subtitle shall be accompanied in 
the Registry by--
            (1) a verification report submitted pursuant to section 
        2405(a);
            (2) a reversal certification submitted pursuant to section 
        2406(b); and
            (3) subject to the requirements of this subtitle, any other 
        information identified by the Administrator as being necessary 
        to achieve the purposes of this subtitle.

SEC. 2410. ENVIRONMENTAL CONSIDERATIONS.

    (a) Coordination to Minimize Negative Effects.--In promulgating 
regulations under this subtitle, the Administrator, in consultation 
with the Secretary of Agriculture, shall act (including by rejecting 
projects, if necessary) to avoid or minimize, to the maximum extent 
practicable, adverse effects on human health or the environment 
resulting from the implementation of offset projects under this 
subtitle.
    (b) Report on Positive Effects.--Not later than 2 years after the 
date of enactment of this Act, the Administrator, in consultation with 
the Secretary of Agriculture, shall submit to Congress a report 
detailing--
            (1) the incentives, programs, or policies capable of 
        fostering improvements to human health or the environment in 
        conjunction with the implementation of offset projects under 
        this subtitle; and
            (2) the cost of those incentives, programs, or policies.
    (c) Use of Native Plant Species in Offset Projects.--Not later than 
18 months after the date of enactment of this Act, the Administrator, 
in consultation with the Secretary of Agriculture, shall promulgate 
regulations for the selection, use, and storage of native and nonnative 
plant materials--
            (1) to ensure native plant materials are given primary 
        consideration, in accordance with applicable Department of 
        Agriculture guidance for use of native plant materials;
            (2) to prohibit the use of Federal- or State-designated 
        noxious weeds; and
            (3) to prohibit the use of a species listed by a regional 
        or State invasive plant council within the applicable region or 
        State.

SEC. 2411. PROGRAM REVIEW.

    Not later than 5 years after the date of enactment of this Act, and 
periodically thereafter, the Administrator shall review and revise, as 
necessary, the regulations promulgated under this subtitle.

                   Subtitle E--International Credits

SEC. 2501. USE OF INTERNATIONAL ALLOWANCES OR CREDITS.

    The owner or operator of a covered facility may satisfy up to 15 
percent of the allowance submission requirement of the covered facility 
under section 1202(a) by submitting allowances or credits obtained on a 
foreign greenhouse gas emissions trading market, on the condition that 
the Administrator has certified the market in accordance with the 
regulations promulgated pursuant to section 2502(a).

SEC. 2502. REGULATIONS.

    (a) In General.--Not later than 2 years after the date of enactment 
of this Act, the Administrator shall promulgate regulations, taking 
into consideration protocols adopted in accordance with the United 
Nations Framework Convention on Climate Change, done at New York on May 
9, 1992--
            (1) approving the use under this subtitle of credits from 
        such foreign greenhouse gas emissions trading markets as the 
        regulations may establish; and
            (2) permitting the use of international credits from the 
        foreign country that issued the credits.
    (b) Requirements.--The regulations promulgated under subsection (a) 
shall require that, in order to be approved for use under this 
subtitle--
            (1) a credit shall have been issued by a foreign country 
        pursuant to a governmental program that imposes mandatory 
        absolute tonnage limits on greenhouse gas emissions from the 
        foreign country, or 1 or more industry sectors in that country, 
        pursuant to protocols described in subsection (a); and
            (2) the governmental program be of comparable stringency to 
        the program established by this Act, including comparable 
        monitoring, compliance, and enforcement.

SEC. 2503. FACILITY CERTIFICATION.

    The owner or operator of a covered facility who submits an 
international allowance or credit under this subtitle shall certify 
that the allowance or credit has not been retired from use in the 
registry of the applicable foreign country.

               Subtitle F--Carbon Market Efficiency Board

SEC. 2601. PURPOSES.

    The purposes of this subtitle are--
            (1) to ensure that the imposition of limits on greenhouse 
        gas emissions will not significantly harm the economy of the 
        United States; and
            (2) to establish a Carbon Market Efficiency Board to ensure 
        the implementation and maintenance of a stable, functioning, 
        and efficient market in emission allowances.

SEC. 2602. 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 this Act;
            (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 significant 
        harm to the economy; and
            (3) to submit to the President and Congress quarterly 
        reports--
                    (A) describing--
                            (i) the status of the emission allowance 
                        market established under this Act;
                            (ii) the economic effects of the market, 
                        regional, industrial, and consumer responses to 
                        the market;
                            (iii) where practicable, energy investment 
                        responses to the market;
                            (iv) any corrective measures that should be 
                        carried out to relieve excessive costs of the 
                        market; and
                            (v) plans to compensate for those measures 
                        to ensure that the long-term emission-reduction 
                        goals of this Act are achieved;
                    (B) that are timely and succinct to ensure regular 
                monitoring of market trends; and
                    (C) that are prepared independently by the Board.
    (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; and
                    (B) appoint not more than 1 member from each such 
                geographical region.
            (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 this Act, 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.--The President shall 
                        submit to Congress a notification of any 
                        determination by the President to remove a 
                        member of the Board for cause under clause (i).
            (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'').

SEC. 2603. 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 Act.
            (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 
                significant increases in emission allowance prices, or 
                shifts in the emission allowance market, should those 
                increases or shifts occur;
                    (D) economic effect thresholds that could warrant 
                implementation of cost relief measures described in 
                section 2604(a) after the initial 2-year period 
                described in section 2603(d)(2);
                    (E) in the event any cost relief measures described 
                in section 2604(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 this Act; and
                    (G) the success of the market in promoting 
                achievement of the purposes of this Act.
    (b) Treatment as Primary Activity.--
            (1) In general.--During the initial 2-year period of 
        operation of the Board, information gathering under subsection 
        (a) shall be the primary activity of the Board.
            (2) Subsequent authority.--After the 2-year period 
        described in paragraph (1), the Board shall assume authority to 
        implement the cost-relief measures described in section 
        2604(a).
    (c) Study.--
            (1) In general.--During the 2-year period beginning on the 
        date on which the emission allowance market established under 
        this Act 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 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.
    (d) Employment of Cost Relief Measures.--
            (1) In general.--If the Board determines that the emission 
        allowance market established under this Act poses a significant 
        harm to the economy of the United States, the Board shall carry 
        out such cost relief measures relating to that market as the 
        Board determines to be appropriate under section 2604(a).
            (2) Initial period.--During the 2-year period beginning on 
        the date on which the emission allowance market established 
        under this Act begins operation, if the Board determines that 
        the average daily closing price of emission allowances during a 
        180-day period exceeds the upper range of the estimate provided 
        under section 2605, the Board shall--
                    (A) increase the quantity of emission allowances 
                that covered facilities may borrow from the prescribed 
                allocations of the covered facilities for future years; 
                and
                    (B) take subsequent action as described in section 
                2604(a)(2).
            (3) Requirements.--Any action carried out pursuant to this 
        subsection shall be subject to the requirements of section 
        2604(a)(3)(B).
    (e) Reports.--The Board shall submit to the President and Congress 
quarterly reports--
            (1) describing the status of the emission allowance market 
        established under this Act, the economic effects of the market, 
        regional, industrial, and consumer responses to the market, 
        energy investment responses to the market, any corrective 
        measures that should be carried out to relieve excessive costs 
        of the market, and plans to compensate for those measures; and
            (2) that are prepared independently by the Board, and not 
        in partnership with Federal agencies.

SEC. 2604. POWERS.

    (a) Cost Relief Measures.--
            (1) In general.--Beginning on the day after the date of 
        expiration of the 2-year period described in section 2603(b), 
        the Board may carry out 1 or more of the following cost relief 
        measures to ensure functioning, stable, and efficient markets 
        for emission allowances:
                    (A) Increase the quantity of emission allowances 
                that covered facilities may borrow from the prescribed 
                allocations of the covered facilities for future years.
                    (B) Expand the period during which a covered 
                facility may repay the Administrator for an emission 
                allowance as described in subparagraph (A).
                    (C) Lower the interest rate at which an emission 
                allowance may be borrowed as described in subparagraph 
                (A).
                    (D) Increase the quantity of allowances or credits 
                obtained on a foreign greenhouse gas emissions trading 
                market that the owner or operator of any covered 
                facility may use to satisfy the allowance submission 
                requirement of the covered facility under section 
                1202(a), on the condition that the Administrator has 
                certified the market in accordance with the regulations 
                promulgated pursuant to section 2502(a).
                    (E) Increase the quantity of offset allowances 
                generated in accordance with subtitle D that the owner 
                or operator of any covered facility may use to satisfy 
                the total allowance submission requirement of the 
                covered facility under section 1202(a).
                    (F) Expand the total quantity of emission 
                allowances made available to all covered facilities at 
                any given time by borrowing against the total allowable 
                quantity of emission allowances to be provided for 
                future years.
            (2) Subsequent actions.--On determination by the Board to 
        carry out a cost relief measure pursuant to paragraph (1), the 
        Board shall--
                    (A) allow the cost relief measure to be used only 
                during the applicable allocation year;
                    (B) exercise the cost relief measure incrementally, 
                and only as needed to avoid significant economic harm 
                during the applicable allocation year;
                    (C) specify the terms of the relief to be achieved 
                using the cost relief measure, including requirements 
                for entity-level or national market-level compensation 
                to be achieved by a specific date or within a specific 
                time period;
                    (D) in accordance with section 2603(e), submit to 
                the President and Congress a report describing the 
                actions carried out by the Board and recommendations 
                for the terms under which the cost relief measure 
                should be authorized by Congress and carried out by 
                Federal entities; and
                    (E) evaluate, at the end of the applicable 
                allocation year, actions that need to be carried out 
                during subsequent years to compensate for any cost 
                relief measure carried out during the applicable 
                allocation year.
            (3) Action on expansion of borrowing.--
                    (A) In general.--If the Board carries out a cost 
                relief measure pursuant to paragraph (1) that results 
                in the expansion of borrowing of emission allowances 
                under this Act, and if the average daily closing price 
                of emission allowances for the 180-day period beginning 
                on the date on which borrowing is so expanded exceeds 
                the upper range of the estimate provided under section 
                2605, the Board shall increase the quantity of emission 
                allowances available for the applicable allocation year 
                in accordance with this paragraph.
                    (B) Requirements.--An increase in the quantity of 
                emission allowances under subparagraph (A) shall--
                            (i) apply to all covered facilities;
                            (ii) be allocated in accordance with the 
                        applicable formulas and procedures established 
                        under this Act;
                            (iii) be equal to not more than 5 percent 
                        of the total quantity of emission allowances 
                        otherwise available for the applicable 
                        allocation year under this Act;
                            (iv) remain in effect only for the 
                        applicable allocation year;
                            (v) specify the date by which the increase 
                        shall be repaid by covered facilities through a 
                        proportionate reduction of emission allowances 
                        available for subsequent allocation years; and
                            (vi) require the repayment under clause (v) 
                        to be made by not later than the date that is 
                        15 years after the date on which the increase 
                        is provided.
    (b) Assessments.--Not more frequently than semiannually, the Board 
may levy on owners and operators of covered facilities, in proportion 
to the capital stock and surplus of the participants, an assessment 
sufficient to pay the estimated expenses of the Board and the salaries 
of members of and employees of the Board during the 180-day period 
beginning on the date on which the assessment is levied, taking into 
account any deficit carried forward from the preceding 180-day period.
    (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;
            (3) to interfere with, modify, or adjust any emission 
        allowance allocation scheme established under Federal law; or
            (4) to modify the total quantity of allowances issued under 
        this Act for the period of calendar years 2012 through 2050.

SEC. 2605. ESTIMATE OF COSTS TO ECONOMY OF LIMITING GREENHOUSE GAS 
              EMISSIONS.

    Not later than July 1, 2014, the Director of the Congressional 
Budget Office, using economic and scientific analyses, shall submit to 
Congress a report that describes--
            (1) the projected price range at which emission allowances 
        are expected to trade during the 2-year period of the initial 
        greenhouse gas emission market established under Federal law; 
        and
            (2) the projected impact of that market on the economy of 
        the United States.

           TITLE III--ALLOCATING AND DISTRIBUTING ALLOWANCES

                       Subtitle A--Early Auctions

SEC. 3101. ALLOCATION FOR EARLY AUCTIONS.

    Not later than 180 days after the date of enactment of this Act, 
the Administrator shall allocate 6 percent of the emission allowances 
established for calendar year 2012, 4 percent of the emission 
allowances established for calendar year 2013, and 2 percent of the 
emissions established for calendar 2014, to the Corporation for early 
auctioning in accordance with section 4301.

                      Subtitle B--Annual Auctions

SEC. 3201. ALLOCATION FOR ANNUAL AUCTIONS.

    Not later than January 1, 2012, and annually thereafter through 
January 1, 2050, the Administrator shall allocate to the Corporation a 
percentage of emission allowances for that calendar year, for annual 
auctioning, as follows:


----------------------------------------------------------------------------------------------------------------
                                                                               Percentage of Emission Allowance
                               Calendar Year                                       Account Allocated to the
                                                                                         Corporation
----------------------------------------------------------------------------------------------------------------
2012                                                                                                         18
----------------------------------------------------------------------------------------------------------------
2013                                                                                                         21
----------------------------------------------------------------------------------------------------------------
2014                                                                                                         24
----------------------------------------------------------------------------------------------------------------
2015                                                                                                         27
----------------------------------------------------------------------------------------------------------------
2016                                                                                                         28
----------------------------------------------------------------------------------------------------------------
2017                                                                                                         31
----------------------------------------------------------------------------------------------------------------
2018                                                                                                         33
----------------------------------------------------------------------------------------------------------------
2019                                                                                                         35
----------------------------------------------------------------------------------------------------------------
2020                                                                                                         37
----------------------------------------------------------------------------------------------------------------
2021                                                                                                         39
----------------------------------------------------------------------------------------------------------------
2022                                                                                                         41
----------------------------------------------------------------------------------------------------------------
2023                                                                                                         43
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2024                                                                                                         45
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2025                                                                                                         47
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2026                                                                                                         49
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2027                                                                                                         51
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2028                                                                                                         53
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2029                                                                                                         55
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2030                                                                                                         57
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2031                                                                                                         59
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2032                                                                                                         61
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2033                                                                                                         63
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2034                                                                                                         65
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2035                                                                                                         67
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2036                                                                                                         73
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2037                                                                                                         73
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2038                                                                                                         73
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2039                                                                                                         73
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2040                                                                                                         73
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2041                                                                                                         73
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2042                                                                                                         73
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2043                                                                                                         73
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2044                                                                                                         73
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2045                                                                                                         73
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2046                                                                                                         73
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2047                                                                                                         73
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2048                                                                                                         73
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2049                                                                                                         73
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2050                                                                                                         73
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                        Subtitle C--Early Action

SEC. 3301. ALLOCATION.

    Not later than 2 years after the date of enactment of this Act, the 
Administrator shall allocate to owners or operators of covered 
facilities, 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--
            (1) 5 percent of the emission allowances established for 
        calendar year 2012;
            (2) 4 percent of the emission allowances established for 
        calendar year 2013;
            (3) 3 percent of the emission allowances established for 
        calendar year 2014;
            (4) 2 percent of the emission allowances established for 
        calendar year 2015; and
            (5) 1 percent of the emission allowances established for 
        calendar year 2016.

SEC. 3302. DISTRIBUTION.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Administrator shall establish, by regulation, 
procedures and standards for use in distributing, to owners and 
operators of covered facilities, emission allowances allocated under 
section 3301.
    (b) Consideration.--The procedures and standards established under 
subsection (a) 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 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 in greenhouse gas emissions.
    (c) Distribution.--Not later than 4 years after the date of 
enactment of this Act, the Administrator shall distribute all emission 
allowances allocated under section 3301.

                           Subtitle D--States

SEC. 3401. ALLOCATION FOR ENERGY SAVINGS.

    (a) Allocation.--Not later than January 1, 2012, and annually 
thereafter through January 1, 2050, the Administrator shall allocate 1 
percent of the Emission Allowance Account among States that--
            (1) have adopted regulations by not later than the date on 
        which the allowance allocations are made, that subject 
        regulated natural gas and electric utilities that deliver gas 
        or electricity in the State to regulations that--
                    (A) automatically adjust the rates charged by 
                natural gas and electric utilities to fully recover 
                fixed costs of service without regard to whether their 
                actual sales are higher or lower than the forecast of 
                sales on which the tariffed rates were based; and
                    (B) make cost-effective energy-efficiency 
                investments by investor-owned natural gas or electric 
                utilities at least as rewarding to their shareholders, 
                on a risk-adjusted basis for the equity capital 
                invested, as power or energy purchases, or investments 
                in new energy supplies or infrastructure; and
            (2) have adopted, or whose political subdivisions have 
        adopted, regulations by not later than the date on which 
        allocations are made, that are as stringent as, or more 
        stringent than, the most recent energy performance requirements 
        of ASHRAE 90.1 and the International Energy Conservation Code 
        for new buildings.
    (b) Allocation for Building Efficiency.--Not later than January 1, 
2012, and annually thereafter through January 1, 2050, the 
Administrator shall allocate 1 percent of the Emission Allowance 
Account among States that are in compliance with section 304(c)(3) of 
the Energy Conservation and Production Act (as amended by section 
5201).
    (c) Distribution.--Not later than 2 years after the date of 
enactment of this Act, the Administrator shall establish procedures and 
standards for the distribution of emission allowances to States in 
accordance with subsections (a) and (b).
    (d) Use.--Any State receiving emission allowances under this 
section for a calendar year shall retire or use, in 1 or more of the 
ways described in section 3403(c)(1), not less than 90 percent of the 
emission allowances allocated to the State (or proceeds of the sale of 
those allowances) under this section for the calendar year.

SEC. 3402. ALLOCATION FOR STATES WITH PROGRAMS THAT EXCEED FEDERAL 
              EMISSION REDUCTION TARGETS.

    (a) Allocation.--Not later than January 1, 2012, and annually 
thereafter through January 1, 2050, the Administrator shall allocate 2 
percent of the Emission Allowance Account for the 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 
        title II; 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 title II.
    (b) Distribution.--Not later than 2 years after the date of 
enactment of this Act, the Administrator shall establish procedures and 
standards for use in distributing emission allowances among States in 
accordance with subsection (a).
    (c) Use.--Any State receiving emission allowances under this 
section for a calendar year shall retire or use, in 1 or more of the 
ways described in section 3403(c)(1), not less than 90 percent of the 
emission allowances allocated to the State (or proceeds of the sale of 
those allowances) under this section for the calendar year.

SEC. 3403. GENERAL ALLOCATION.

    (a) Allocation.--Subject to subsection (d)(3), not later than 
January 1, 2012, and annually thereafter through January 1, 2050, the 
Administrator shall allocate 5 percent of the Emission Allowance 
Account for the 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, \1/3\ of the quantity of 
        allowances available for allocation to States under subsection 
        (a) shall be allocated 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, \1/3\ of the quantity of 
        allowances available for allocation to States under subsection 
        (a) shall be allocated 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.
            (3) For each calendar year, \1/3\ of the quantity of 
        allowances available for allocation to States under subsection 
        (a) shall be allocated among the States based on the proportion 
        that--
                    (A) the quantity of carbon dioxide that would be 
                emitted assuming that all of the coal that is mined, 
                natural gas that is processed, and petroleum that is 
                refined within the boundaries of a State during the 
                preceding year is completely combusted and that none of 
                the carbon dioxide emissions are captured, as 
                determined by the Secretary of Energy; bears to
                    (B) the aggregate quantity of carbon dioxide that 
                would be emitted assuming that all of the coal that is 
                mined, natural gas that is processed, and petroleum 
                that is refined in all States for the preceding year is 
                completely combusted and that none of the carbon 
                dioxide emissions are captured, as determined by the 
                Secretary of Energy.
    (c) Use.--
            (1) In general.--During any calendar year, a State shall 
        retire or use in 1 or more of the following ways not less than 
        90 percent of the allowances allocated to the State (or 
        proceeds of sale of those emission allowances) under this 
        section for that calendar year:
                    (A) To mitigate impacts on low-income energy 
                consumers.
                    (B) To promote energy efficiency (including support 
                of electricity and natural gas demand reduction, waste 
                minimization, and recycling programs).
                    (C) To promote investment in nonemitting 
                electricity generation technology.
                    (D) To improve public transportation and passenger 
                rail service and otherwise promote reductions in 
                vehicle miles traveled.
                    (E) To encourage advances in energy technology that 
                reduce or sequester greenhouse gas emissions.
                    (F) To address local or regional impacts of climate 
                change, including the relocation of communities 
                displaced by the impacts of climate change.
                    (G) To mitigate obstacles to investment by new 
                entrants in electricity generation markets and energy-
                intensive manufacturing sectors.
                    (H) To address local or regional impacts of climate 
                change policy, including providing assistance to 
                displaced workers.
                    (I) To mitigate impacts on energy-intensive 
                industries in internationally competitive markets.
                    (J) To reduce hazardous fuels, and to prevent and 
                suppress wildland fire.
                    (K) To fund rural, municipal, and agricultural 
                water projects that are consistent with the sustainable 
                use of water resources.
            (2) Deadline.--A State shall distribute or sell allowances 
        for use in accordance with paragraph (1) by not later than 1 
        year before the beginning of each allowance allocation year.
            (3) Return of allowances.--Not later than 330 days before 
        the beginning of each allowance allocation year, a State shall 
        return to the Administrator any allowances not distributed by 
        the deadline under paragraph (2).
    (d) Program for Tribal Communities.--
            (1) Establishment.--Not later than 3 years after the date 
        of enactment of this Act, the Administrator, in consultation 
        with the Secretary of the Interior, shall by regulation 
        establish a program for tribal communities--
                    (A) that is designed to deliver assistance to 
                tribal communities within the United States that face 
                disruption or dislocation as a result of global climate 
                change; and
                    (B) under which the Administrator shall distribute 
                0.5 percent of the Emission Allowance Account for each 
                calendar among tribal governments of the tribal 
                communities described in subparagraph (A).
            (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 Administrator shall allocate 0.5 percent of the 
        Emission Allowance Account for each calendar year to the 
        program established under paragraph (1).
            (3) Allocations to states.--For each calendar year for 
        which the Administrator allocates 0.5 percent of the Emission 
        Allowance Account to the program established under paragraph 
        (1), the general allocation for States under subsection (a) 
        shall be 4.5 percent of the Emission Allowance Account.

                   Subtitle E--Electricity Consumers

SEC. 3501. ALLOCATION.

    Not later than April 1, 2012, and annually thereafter through 
January 1, 2050, the Administrator shall allocate among load-serving 
entities 10 percent of the Emission Allowance Account for the year.

SEC. 3502. DISTRIBUTION.

    (a) In General.--For each calendar year, the emission allowances 
allocated under section 3501 shall be distributed by the Administrator 
to each load-serving entity 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 emission allowances 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 Administrator 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. 3503. USE.

    (a) In General.--Any load-serving entity that accepts emission 
allowances distributed under section 3502 shall--
            (1) sell each emission allowance distributed to the load-
        serving entity by not later than 1 year after receiving the 
        emission allowance; and
            (2) pursue fair market value for each emission allowance 
        sold in accordance with paragraph (1).
    (b) Proceeds.--All proceeds from the sale of emission allowances 
under subsection (a) shall be used solely--
            (1) to mitigate economic impacts on low- and middle-income 
        energy consumers, including by reducing transmission charges or 
        issuing rebates; and
            (2) to promote energy efficiency on the part of energy 
        consumers.
    (c) Inclusion in Retail Rates.--To facilitate the prompt pass-
through of the benefits from the sale of emission allowances to retail 
customers--
            (1) any credit from the sale of allowances shall be 
        reflected in the retail rates of a load-serving entity not 
        later than 90 days after the sale of the allowances;
            (2) the load-serving entity shall not be required to file a 
        retail rate case in order to pass through the credit; and
            (3) the amount of the credit shall not be subject to review 
        by any State regulatory authority.
    (d) Prohibition on Rebates.--No load-serving entity may use any 
proceeds from the sale of emission allowances under subsection (a) to 
provide to any consumer a rebate that is based on the quantity of 
electricity used by the consumer.

SEC. 3504. REPORTING.

    (a) In General.--Each load-serving entity that accepts emission 
allowances distributed under section 3502 shall, for each calendar year 
for which the load-serving entity accepts emission allowances, submit 
to the Administrator a report describing--
            (1) the date of each sale of each emission allowance during 
        the preceding year;
            (2) the amount of revenue generated from the sale of 
        emission allowances during the preceding year; and
            (3) how, and to what extent, the load-serving entity used 
        the proceeds of the sale of the emission allowances during the 
        preceding year.
    (b) Availability of Reports.--The Administrator shall make 
available to the public all reports submitted by any load-serving 
entity under subsection (b), including by publishing those reports on 
the Internet.

    Subtitle F--Bonus Allowances for Carbon Capture and Geological 
                             Sequestration

SEC. 3601. ALLOCATION.

    (a) In General.--Not later than 3 years after the date of enactment 
of this Act, the Administrator shall--
            (1) establish a Bonus Allowance Account; and
            (2) allocate 4 percent of the emission allowances 
        established for calendar years 2012 through 2035 to the Bonus 
        Allowance Account.
    (b) Initial Number of Allowances.--As of January 1, 2012, there 
shall be 3,932,160,000 emission allowances in the Bonus Allowance 
Account.

SEC. 3602. QUALIFYING PROJECTS.

    To be eligible to receive emission allowances under this subtitle, 
a carbon capture and sequestration project shall--
            (1) comply with such criteria and procedures as the 
        Administrator may establish, including a requirement for a 
        minimum of an 85-percent capture rate for carbon dioxide 
        emissions on an annual basis from any unit for which allowances 
        are allocated;
            (2) sequester in a geological formation permitted by the 
        Administrator for that purpose in accordance with regulations 
        promulgated under section 1421(d) of the Safe Drinking Water 
        Act (42 U.S.C. 300h(d)) carbon dioxide resulting from electric 
        power generation; and
            (3) have begun operation during the period beginning on 
        January 1, 2008, and ending on December 31, 2035.

SEC. 3603. DISTRIBUTION.

    Subject to section 3604, for each of calendar years 2012 through 
2039, the Administrator shall distribute emission allowances from the 
Bonus Allowance Account to each qualifying project under this subtitle 
in a quantity equal to the product obtained by multiplying the number 
of metric tons of carbon dioxide geologically sequestered by the 
project and the bonus allowance rate for that calendar year, as 
provided in the following table:


 
                          Year                                             Bonus Allowance Rate
 
2012                                                     4.5
2013                                                     4.5
2014                                                     4.5
2015                                                     4.5
2016                                                     4.5
2017                                                     4.5
2018                                                     4.2
2019                                                     3.9
2020                                                     3.6
2021                                                     3.3
2022                                                     3.0
2023                                                     2.7
2024                                                     2.4
2025                                                     2.1
2026                                                     1.8
2027                                                     1.5
2028                                                     1.3
2029                                                     1.1
2030                                                     0.9
2031                                                     0.7
2032                                                     0.5
2033                                                     0.5
2034                                                     0.5
2035                                                     0.5
2036                                                     0.5
2037                                                     0.5
2038                                                     0.5
2039                                                     0.5

SEC. 3604. 10-YEAR LIMIT.

    A qualifying project may receive annual emission allowances under 
this subsection only for--
            (1) the first 10 years of operation; or
            (2) if the unit covered by the qualifying project began 
        operating before January 1, 2012, the period of calendar years 
        2012 through 2021.

SEC. 3605. EXHAUSTION OF BONUS ALLOWANCE ACCOUNT.

    If, at the beginning of a calendar year, the Administrator 
determines that the number of emission allowances remaining in the 
Bonus Allowance Account will be insufficient to allow the distribution, 
in that calendar year, of the number of allowances that otherwise would 
be distributed under section 3603 for the calendar year, the 
Administrator shall, for the calendar year--
            (1) distribute the remaining bonus allowances only to 
        qualifying projects that were already qualifying projects 
        during the preceding calendar year;
            (2) distribute the remaining bonus allowances to those 
        qualifying projects on a pro rata basis; and
            (3) discontinue the program established under this subtitle 
        as of the date on which the Bonus Allowance Account is 
        projected to be fully used based on projects already in 
        operation.

             Subtitle G--Domestic Agriculture and Forestry

SEC. 3701. ALLOCATION.

    Not later than January 1, 2012, and annually thereafter through 
January 1, 2050, the Administrator shall allocate to the Secretary of 
Agriculture 5 percent of the Emission Allowance Account for the 
calendar year for use in--
            (1) reducing greenhouse gas emissions from the agriculture 
        and forestry sectors of the United States economy; and
            (2) increasing greenhouse gas sequestration from those 
        sectors.

SEC. 3702. 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 manner in which carbon credits that are specific to 
        agricultural and forestry operations 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. 3703. DISTRIBUTION.

    Taking into account the report prepared under subsection 3702(a), 
the Secretary of Agriculture shall establish, by regulation, a program 
under which agricultural and forestry sequestration allowances may be 
distributed to entities that carry out sequestration projects on 
agricultural and forest land that achieve long-term greenhouse gas 
emission mitigation benefits.

              Subtitle H--International Forest Protection

SEC. 3801. 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; and
            (4) 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. 3802. DEFINITION OF FOREST CARBON ACTIVITIES.

    In this subtitle, the term ``forest carbon 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 
        promulgated under section 3804(a).

SEC. 3803. ALLOCATION.

    Not later than January 1, 2012, and annually thereafter through 
January 1, 2050, the Administrator shall allocate and distribute 3 
percent of the Emission Allowance Account for the calendar year for use 
in carrying out forest carbon activities in countries other than the 
United States.

SEC. 3804. DEFINITION AND ELIGIBILITY REQUIREMENTS.

    (a) Eligibility Requirements for Forest Carbon Activities.--Not 
later than 2 years after the date of enactment of this Act, the 
Administrator, in consultation with the Secretary of the Interior, the 
Secretary of State, and the Secretary of Agriculture, shall promulgate 
eligibility requirements for forest carbon activities directed 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) carried out and managed in accordance with widely-
        accepted environmentally sustainable forestry practices; and
            (2) designed--
                    (A) to promote native species and restoration of 
                native forests, where practicable; and
                    (B) to avoid the introduction of invasive nonnative 
                species.
    (b) Quality Criteria for Forest Carbon Allocations.--Not later than 
2 years after the date of enactment of this Act, the Administrator, in 
consultation with the Secretary of the Interior, the Secretary of 
State, and the Secretary of Agriculture, shall promulgate regulations 
establishing the requirements for eligibility to receive allowances 
under this section, including requirements that ensure that the 
emission reductions or sequestrations are real, permanent, additional, 
and verifiable, with reliable measuring and monitoring and appropriate 
accounting for leakage.

SEC. 3805. INTERNATIONAL FOREST CARBON ACTIVITIES.

    (a) In General.--The Administrator, in consultation with the 
Secretary of State, shall identify and periodically update a list of 
countries that have--
            (1) demonstrated capacity to participate in international 
        forest carbon activities, including--
                    (A) sufficient historical data on changes in 
                national forest carbon stocks;
                    (B) technical capacity to monitor and measure 
                forest carbon fluxes with an acceptable level of 
                uncertainty; and
                    (C) institutional capacity to reduce emissions from 
                deforestation and degradation;
            (2) capped greenhouse gas emissions or otherwise 
        established a national emission reference scenario based on 
        historical data; and
            (3) commenced an emission reduction program for the forest 
        sector.
    (b) Crediting and Additionality.--
            (1) Reduction in deforestation and forest degradation.--A 
        verified reduction in greenhouse gas emissions from 
        deforestation and forest degradation under a cap or from a 
        nationwide emissions reference scenario described in subsection 
        (a) shall be--
                    (A) eligible for crediting; and
                    (B) considered to satisfy the additionality 
                criterion.
            (2) Periodic review of national level reductions in 
        deforestation and degradation.--The Administrator, in 
        consultation with the Secretary of State, shall identify and 
        periodically update a list of countries described in subsection 
        (a) that have--
                    (A) achieved national-level reductions of 
                deforestation and degradation below a historical 
                reference scenario, taking into consideration the 
                average annual deforestation and degradation rates of 
                the country and of all countries during a period of at 
                least 5 years; and
                    (B) demonstrated those reductions using remote 
                sensing technology that meets international standards.
            (3) Other forest carbon activities.--A forest carbon 
        activity, other than a reduction in deforestation or forest 
        degradation, shall be eligible for crediting, subject to the 
        quality criteria for forest carbon credits identified in this 
        Act or in regulations promulgated under this Act.
    (c) Recognition of Credits.--With respect to countries other than 
countries described in subsection (a), the Administrator--
            (1) shall recognize credits from forest carbon activities, 
        subject to the quality criteria for forest carbon credits 
        identified in this Act and regulations promulgated under this 
        Act; and
            (2) 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.

SEC. 3806. REVIEWS AND DISCOUNT.

    (a) Reviews.--Not later than 3 years after the date of enactment of 
this Act, and 5 years thereafter, the Administrator shall conduct a 
review of the credit program under this subtitle.
    (b) Discount.--If, after the date that is 10 years after the date 
of enactment of this Act, the Administrator 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, the Administrator may apply a discount to forest carbon 
credits imported into the United States from those countries.

                     Subtitle I--Covered Facilities

SEC. 3901. ALLOCATION.

    Not later than April 1, 2012, and annually thereafter through 
January 1, 2035, the Administrator shall allocate percentages of the 
Emission Allowance Account for the calendar year to owners or operators 
of covered facilities within the electric power sector and the 
industrial sector, as follows:


----------------------------------------------------------------------------------------------------------------
                                        Percentage of Emission Allowance      Percentage of Emission Allowance
              Calendar                  Account Allocated to the Electric    Account Allocated to the Industrial
                                                  Power Sector                             Sector
----------------------------------------------------------------------------------------------------------------
2012                                  20                                    20
----------------------------------------------------------------------------------------------------------------
2013                                  20                                    20
----------------------------------------------------------------------------------------------------------------
2014                                  20                                    20
----------------------------------------------------------------------------------------------------------------
2015                                  20                                    20
----------------------------------------------------------------------------------------------------------------
2016                                  20                                    20
----------------------------------------------------------------------------------------------------------------
2017                                  19                                    19
----------------------------------------------------------------------------------------------------------------
2018                                  18                                    18
----------------------------------------------------------------------------------------------------------------
2019                                  17                                    17
----------------------------------------------------------------------------------------------------------------
2020                                  16                                    16
----------------------------------------------------------------------------------------------------------------
2021                                  15                                    15
----------------------------------------------------------------------------------------------------------------
2022                                  14                                    14
----------------------------------------------------------------------------------------------------------------
2023                                  13                                    13
----------------------------------------------------------------------------------------------------------------
2024                                  12                                    12
----------------------------------------------------------------------------------------------------------------
2025                                  11                                    11
----------------------------------------------------------------------------------------------------------------
2026                                  10                                    10
----------------------------------------------------------------------------------------------------------------
2027                                  9                                     9
----------------------------------------------------------------------------------------------------------------
2028                                  8                                     8
----------------------------------------------------------------------------------------------------------------
2029                                  7                                     7
----------------------------------------------------------------------------------------------------------------
2030                                  6                                     6
----------------------------------------------------------------------------------------------------------------
2031                                  5                                     5
----------------------------------------------------------------------------------------------------------------
2032                                  4                                     4
----------------------------------------------------------------------------------------------------------------
2033                                  3                                     3
----------------------------------------------------------------------------------------------------------------
2034                                  2                                     2
----------------------------------------------------------------------------------------------------------------
2035                                  1                                     1
----------------------------------------------------------------------------------------------------------------

SEC. 3902. DISTRIBUTION SYSTEM.

    Not later than 1 year after the date of enactment of this Act, the 
Administrator shall establish a system for distributing to covered 
facilities within the electric power and industrial sectors the 
emission allowances allocated under section 3901.

SEC. 3903. DISTRIBUTING EMISSION ALLOWANCES WITHIN THE ELECTRIC POWER 
              SECTOR.

    (a) New Entrants.--
            (1) In general.--As part of the system established under 
        section 3902, the Administrator shall, for each calendar year, 
        set aside, from the quantity of emission allowances represented 
        by the percentages described in the table contained in section 
        3901 for the electric power sector, a quantity of emission 
        allowances for distribution to new entrant covered electric 
        power sector facilities.
            (2) Calculation of allowances.--The quantity of emission 
        allowances distributed by the Administrator for a calendar year 
        to a new covered electric power sector facility under paragraph 
        (1) shall be equal to the product obtained by multiplying--
                    (A) the average greenhouse gas emission rate of all 
                covered electric power sector facilities that commenced 
                operations during the 5 years preceding the date of 
                enactment of this Act; and
                    (B) the electricity generated by the facility 
                during the calendar year, adjusted downward on a pro 
                rata basis for each new facility in the event that 
                insufficient allowances are available under section 
                3901 for a calendar year.
    (b) Facilities Owned by a Rural Electric Cooperative.--
            (1) In general.--As part of the system established under 
        section 3902, the Administrator shall, for each calendar year, 
        set aside, from the quantity of emission allowances represented 
        by the percentages described in the table contained in section 
        3901 for the electric power sector, a quantity of emission 
        allowances for distribution to covered electric power sector 
        facilities that are owned or operated by a rural electric 
        cooperative.
            (2) Calculation of allowances.--The quantity of emission 
        allowances distributed by the Administrator in a calendar year 
        under paragraph (1) to a covered electric power sector facility 
        that is owned or operated by a rural electric cooperative shall 
        be equal to the quantity of carbon dioxide equivalents that the 
        covered electric power sector facility emitted during calendar 
        year 2006.
    (c) Incumbents.--
            (1) In general.--As part of the system established under 
        section 3902, the Administrator shall, for each calendar year, 
        distribute to covered electric power sector facilities (other 
        than facilities owned or operated by a rural electric 
        cooperative) that were operating during the calendar year 
        preceding the year in which this Act was enacted the emission 
        allowances represented by the percentages described in the 
        table contained in section 3901 for the electric power sector 
        that remain after the distribution of emission allowances under 
        subsections (a) and (b).
            (2) Calculation of allowances.--The quantity of emission 
        allowances distributed to a covered electric power sector 
        facility under paragraph (1) shall be equal to the product 
        obtained by multiplying--
                    (A) the quantity of emission allowances available 
                for distribution under paragraph (1); and
                    (B) the quotient obtained by dividing--
                            (i) the annual average quantity of carbon 
                        dioxide equivalents emitted by the covered 
                        electric power sector facility during the 3 
                        calendar years preceding the date of enactment 
                        of this Act; by
                            (ii) the annual average of the aggregate 
                        quantity of carbon dioxide equivalents emitted 
                        by all covered electric power sector facilities 
                        during those 3 calendar years.

SEC. 3904. DISTRIBUTING EMISSION ALLOWANCES WITHIN THE INDUSTRIAL 
              SECTOR.

    (a) New Entrants.--
            (1) In general.--As part of the system established under 
        section 3902, the Administrator shall, for each calendar year, 
        set aside, from the quantity of emission allowances represented 
        by the percentages described in the table contained in section 
        3901 for the industrial sector, a quantity of emission 
        allowances for distribution to new entrant covered industrial 
        sector facilities.
            (2) Calculation of allowances.--The quantity of emission 
        allowances distributed by the Administrator in a calendar year 
        to a new covered industrial sector facility under paragraph (1) 
        shall be calculated pursuant to such formula as shall be 
        established under the system established under section 3902.
    (b) Incumbents.--
            (1) In general.--As part of the system established under 
        section 3902, the Administrator shall, for each calendar year, 
        distribute to covered industrial sector facilities that were 
        operating during the calendar year preceding the year in which 
        this Act was enacted the emission allowances represented by the 
        percentages described in the table contained in section 3901 
        for the industrial sector that remain after the distribution of 
        emission allowances under subsection (a).
            (2) Calculation of allowances.--The quantity of emission 
        allowances distributed to a covered industrial sector facility 
        under paragraph (1) shall be equal to the product obtained by 
        multiplying--
                    (A) the quantity of emission allowances available 
                for distribution under paragraph (1); and
                    (B) the quotient obtained by dividing--
                            (i) the annual average quantity of carbon 
                        dioxide equivalents emitted by the covered 
                        industrial sector facility during the 3 
                        calendar years preceding the date of enactment 
                        of this Act; by
                            (ii) the annual average of the aggregate 
                        quantity of carbon dioxide equivalents emitted 
                        by all covered industrial sector facilities 
                        during those 3 calendar years.
    (c) Revocation of Distribution Upon Facility Shutdown.--If a 
covered facility within the industrial sector receives a distribution 
of emission allowances under this section for a calendar year and is 
subsequently permanently shut down during that calendar year, the owner 
or operator of the facility shall promptly return to the Administrator 
a number of emission allowances equal to the difference between--
            (1) the number of carbon dioxide equivalents emitted by the 
        facility in that calendar year prior to the shutdown; and
            (2) the number of emission allowances distributed to the 
        facility by the Administrator for that calendar year.

            TITLE IV--AUCTIONS AND USES OF AUCTION PROCEEDS

                           Subtitle A--Funds

SEC. 4101. ESTABLISHMENT.

    There are established in the Treasury of the United States the 
following funds:
            (1) The Energy Assistance Fund.
            (2) The Climate Change Worker Training Fund.
            (3) The Adaptation Fund.
            (4) The Climate Change and National Security Fund.

SEC. 4102. AMOUNTS IN FUNDS.

    Each Fund established by section 4101 shall consist of such amounts 
as are appropriated to the respective Fund under section 4103.

SEC. 4103. TRANSFERS TO FUNDS.

    There are appropriated to each Fund established by section 4101, 
out of funds of the Treasury not otherwise appropriated, amounts 
equivalent to amounts deposited in each respective Fund under section 
4302(b)(2).

             Subtitle B--Climate Change Credit Corporation

SEC. 4201. ESTABLISHMENT.

    (a) In General.--There is established, as a nonprofit corporation 
without stock, a corporation to be known as the ``Climate Change Credit 
Corporation''.
    (b) Treatment.--The Corporation shall not be considered to be an 
agency or establishment of the Federal Government.

SEC. 4202. APPLICABLE LAWS.

    The Corporation shall be subject to this title and, to the extent 
consistent with this title, the District of Columbia Business 
Corporation Act (D.C. Code section 29-301 et seq.).

SEC. 4203. BOARD OF DIRECTORS.

    (a) In General.--The Corporation shall have a board of directors 
composed of 5 individuals who are citizens of the United States, of 
whom 1 shall be elected annually by the board to serve as Chairperson.
    (b) Political Affiliation.--Not more than 3 members of the board 
serving at any time may be affiliated with the same political party.
    (c) Appointment and Term.--A member of the board shall be appointed 
by the President, by and with the advice and consent of the Senate, for 
a term of 5 years.
    (d) Quorum.--Three members of the board shall constitute a quorum 
for a meeting of the board of directors.

                          Subtitle C--Auctions

SEC. 4301. EARLY AUCTIONS.

    (a) Initiation of Auctioning.--Not later than 1 year after the date 
of enactment of this Act, the Corporation shall begin auctioning the 
emission allowances allocated to the Corporation under section 3101.
    (b) Completion of Auctioning.--Not later than December 31, 2011, 
the Corporation shall complete auctioning of all allowances allocated 
to the Corporation under section 3101.
    (c) Proceeds From Early Auctioning.--The Corporation shall use to 
carry out programs established under subtitle D all proceeds of early 
auctioning conducted by the Corporation under this section.

SEC. 4302. ANNUAL AUCTIONS.

    (a) In General.--Not later than 30 days after the beginning of a 
calendar year identified in the table contained in section 3201, and 
annually thereafter through calendar year 2050, the Corporation shall 
auction all of the allowances allocated to the Corporation for that 
year by the Administrator under section 3201.
    (b) Proceeds From Annual Auctioning.--
            (1) In general.--For each of calendar years 2012 through 
        2050, the Corporation shall use to carry out the programs 
        established under subtitle D 55 percent of the proceeds from 
        annual auctions that the Corporation conducts for the calendar 
        year under this section.
            (2) Deposit of funds.--For each of calendar years 2012 
        through 2050, the Corporation shall, subject to subtitle H, 
        deposit into the following Funds established by section 4101 
        the following percentages of the proceeds from auctions that 
        the Corporation conducts for the calendar year under this 
        section:


 
 
 
Energy Assistance Fund                   20
Climate Change Worker Training Fund....   5
Adaptation Fund........................  20

                Subtitle D--Energy Technology Deployment

SEC. 4401. IN GENERAL.

    For each calendar year, the Corporation shall use the amounts 
described in section 4301(c) and 4302(b) to carry out the programs 
established under this subtitle, as follows:
            (1) Not more than 45 percent of the funds shall be used to 
        carry out the zero- or low-carbon energy technologies program 
        under section 4402.
            (2) Not more than 35 percent of the funds shall be used as 
        follows:
                    (A) Not more than 28 percent shall be used to carry 
                out the advanced coal and sequestration technologies 
                program under section 4403.
                    (B) Not more than 7 percent shall be used to carry 
                out the cellulosic biomass ethanol technology 
                deployment programs under section 4404.
            (3) Not more than 20 percent shall be used to carry out the 
        advanced technology vehicles manufacturing incentive program 
        under section 4405.

SEC. 4402. ZERO- OR LOW-CARBON ENERGY TECHNOLOGIES DEPLOYMENT.

    (a) Definitions.--In this section:
            (1) Energy savings.--The term ``energy savings'' means 
        megawatt-hours of electricity or million British thermal units 
        of natural gas saved by a product, in comparison to projected 
        energy consumption under an energy-efficiency standard 
        applicable to the product.
            (2) High-efficiency consumer product.--The term ``high-
        efficiency consumer product'' means a covered product to which 
        an energy conservation standard applies under section 325 of 
        the Energy Policy and Conservation Act (42 U.S.C. 6295), if the 
        energy efficiency of the product exceeds the energy efficiency 
        required under the standard.
            (3) Zero- or low-carbon generation.--The term ``zero- or 
        low-carbon generation'' means generation of electricity by an 
        electric generation unit that--
                    (A) emits no carbon dioxide into the atmosphere, or 
                is fossil-fuel fired and emits into the atmosphere not 
                more than 250 pounds of carbon dioxide per megawatt-
                hour (after adjustment for any carbon dioxide from the 
                unit that is geologically sequestered); and
                    (B) was placed into commercial service after the 
                date of enactment of this Act.
    (b) Financial Incentives Program.--During each fiscal year 
beginning on or after October 1, 2008, the Corporation shall 
competitively award financial incentives under this subsection in the 
technology categories of--
            (1) the production of electricity from new zero- or low-
        carbon generation; and
            (2) the manufacture of high-efficiency consumer products.
    (c) Requirements.--
            (1) In general.--The Corporation shall make awards under 
        this section to producers of new zero- or low-carbon generation 
        and to manufacturers of high-efficiency consumer products--
                    (A) in the case of producers of new zero- or low-
                carbon generation, based on the bid of each producer in 
                terms of dollars per megawatt-hour of electricity 
                generated; and
                    (B) in the case of manufacturers of high-efficiency 
                consumer products, based on the bid of each 
                manufacturer in terms of dollars per megawatt-hour or 
                million British thermal units saved.
            (2) Acceptance of bids.--
                    (A) In general.--In making awards under this 
                subsection, the Corporation shall--
                            (i) solicit bids for reverse auction from 
                        appropriate producers and manufacturers, as 
                        determined by the Corporation; and
                            (ii) award financial incentives to the 
                        producers and manufacturers that submit the 
                        lowest bids that meet the requirements 
                        established by the Corporation.
                    (B) Factors for conversion.--
                            (i) In general.--For the purpose of 
                        assessing bids under subparagraph (A), the 
                        Corporation shall specify a factor for 
                        converting megawatt-hours of electricity and 
                        million British thermal units of natural gas to 
                        common units.
                            (ii) Requirement.--The conversion factor 
                        shall be based on the relative greenhouse gas 
                        emission benefits of electricity and natural 
                        gas conservation.
    (d) Forms of Awards.--
            (1) Zero- and low-carbon generators.--An award for zero- or 
        low-carbon generation under this subsection shall be in the 
        form of a contract to provide a production payment for each 
        year during the first 10 years of commercial service of the 
        generation unit in an amount equal to the product obtained by 
        multiplying--
                    (A) the amount bid by the producer of the zero- or 
                low-carbon generation; and
                    (B) the megawatt-hours estimated to be generated by 
                the zero- or low-carbon generation unit each year.
            (2) High-efficiency consumer products.--An award for a 
        high-efficiency consumer product under this subsection shall be 
        in the form of a lump sum payment in an amount equal to the 
        product obtained by multiplying--
                    (A) the amount bid by the manufacturer of the high-
                efficiency consumer product; and
                    (B) the energy savings during the projected useful 
                life of the high-efficiency consumer product, not to 
                exceed 10 years, as determined by the Corporation.

SEC. 4403. ADVANCED COAL AND SEQUESTRATION TECHNOLOGIES PROGRAM.

    (a) Advanced Coal Technologies.--
            (1) Definition of advanced coal generation technology.--In 
        this subsection, the term ``advanced coal generation 
        technology'' means advanced a coal-fueled power plant 
        technology that--
                    (A) achieves a minimum efficiency of 30 percent 
                with respect to higher heating value of the feedstock, 
                after all parasitic requirements for carbon dioxide 
                capture and compression to 2,000 pounds per square inch 
                absolute have been subtracted;
                    (B) provides for the capture and geological 
                sequestration of at least 85 percent of carbon dioxide 
                produced at the facility, as determined by the 
                Corporation; and
                    (C) has an emission rate of not more than 250 
                pounds of carbon dioxide per megawatt-hour of net 
                electricity generation, after subtracting the carbon 
                dioxide that is captured and sequestered.
            (2) Demonstration projects.--The Corporation shall use not 
        less than \1/4\ of the amounts made available to carry out this 
        section for each fiscal year to support demonstration projects 
        using advanced coal generation technology, including retrofit 
        technology that could be deployed on existing coal generation 
        facilities.
            (3) Deployment incentives.--
                    (A) In general.--The Corporation shall use not less 
                than \1/4\ of the amounts made available to carry out 
                this subsection for each fiscal year to provide Federal 
                financial incentives to facilitate the deployment of 
                not more than 20 gigawatts of advanced coal generation 
                technologies.
                    (B) Administration.--In providing incentives under 
                this paragraph, the Corporation shall--
                            (i) provide appropriate incentives for 
                        regulated investor-owned utilities, municipal 
                        utilities, electric cooperatives, and 
                        independent power producers, as determined by 
                        the Secretary of Energy; and
                            (ii) ensure that a range of the domestic 
                        coal types is employed in the facilities that 
                        receive incentives under this paragraph.
                    (C) Funding requirements.--
                            (i) Sequestration activities.--The 
                        Corporation shall provide incentives only to 
                        projects that will capture and sequester at 
                        least 85 percent of the carbon dioxide produced 
                        by the project facilities.
                            (ii) Storage agreement required.--The 
                        Corporation shall require a binding storage 
                        agreement for the carbon dioxide captured in a 
                        project under this subsection, in a geological 
                        storage project permitted by the Administrator 
                        under regulations promulgated pursuant to 
                        section 1421(d) of the Safe Drinking Water Act 
                        (42 U.S.C. 300h(d)).
                            (iii) Projects using certain coals.--In 
                        providing incentives under this paragraph, the 
                        Corporation shall set aside not less than 25 
                        percent of any amounts made available to carry 
                        out this subsection for projects using lower-
                        rank coals, such as subbituminous coal and 
                        lignite.
            (4) Distribution of funds.--A project that receives an 
        award under this subsection may elect 1 of the following 
        Federal financial incentives:
                    (A) A loan guarantee.
                    (B) A cost-sharing grant to cover the incremental 
                cost of installing and operating carbon capture and 
                storage equipment (for which utilization costs may be 
                covered for the first 10 years of operation).
                    (C) Production payments of not more than 1.5 cents 
                per kilowatt-hour of electric output during the first 
                10 years of commercial service of the project.
            (5) Limitation.--A project may not receive an award under 
        this subsection if the project receives an award under section 
        4402.
    (b) Sequestration.--
            (1) In general.--The Corporation shall use not less than 
        \1/2\ of the amounts made available to carry out this 
        subsection for each fiscal year for large-scale geological 
        carbon storage demonstration projects that store carbon dioxide 
        captured from facilities for the generation of electricity 
        using coal gasification or other advanced coal combustion 
        processes, including facilities that receive assistance under 
        subsection (a).
            (2) Project capital and operating costs.--The Corporation 
        shall provide assistance under this paragraph to reimburse the 
        project owner for a percentage of the incremental project 
        capital and operating costs of the project that are 
        attributable to carbon capture and sequestration, as the 
        Secretary determines to be appropriate.

SEC. 4404. FUEL FROM CELLULOSIC BIOMASS.

    (a) In General.--The Corporation shall provide deployment 
incentives under this section to encourage a variety of projects to 
produce transportation fuels from cellulosic biomass, relying on 
different feedstocks in different regions of the United States.
    (b) Project Eligibility.--Incentives under this section shall be 
provided on a competitive basis to projects that produce fuels that--
            (1) meet United States fuel and emission specifications;
            (2) help diversify domestic transportation energy supplies; 
        and
            (3) improve or maintain air, water, soil, and habitat 
        quality, and protect scarce water supplies.
    (c) Incentives.--Incentives under this section may consist of--
            (1) loan guarantees for the construction of production 
        facilities and supporting infrastructure; or
            (2) production payments through a reverse auction in 
        accordance with subsection (d).
    (d) Reverse Auction.--
            (1) In general.--In providing incentives under this 
        section, the Corporation shall--
                    (A) prescribe rules under which producers of fuel 
                from cellulosic biomass may bid for production payments 
                under subsection (c)(2); and
                    (B) solicit bids from producers of different 
                classes of transportation fuel, as the Corporation 
                determines to be appropriate.
            (2) Requirement.--The rules under section 4402 shall 
        require that incentives shall be provided to the producers that 
        submit the lowest bid (in terms of cents per gallon gasoline 
        equivalent) for each class of transportation fuel from which 
        the Corporation solicits a bid.

SEC. 4405. ADVANCED TECHNOLOGY VEHICLES MANUFACTURING INCENTIVE 
              PROGRAM.

    (a) Definitions.--In this section:
            (1) Advanced technology vehicle.--The term ``advanced 
        technology vehicle'' means a hybrid or advanced diesel light 
        duty motor vehicle that meets--
                    (A) the Tier II Bin 5 emission standard established 
                in rules prescribed by the Administrator under section 
                202(i) of the Clean Air Act (42 U.S.C. 7521(i)), or a 
                lower-numbered Bin emission standard;
                    (B) any new emission standard for fine particulate 
                matter prescribed by the Administrator under that Act; 
                and
                    (C) at least 125 percent of the average base year 
                combined fuel economy, calculated on an energy-
                equivalent basis, for vehicles of a substantially 
                similar footprint.
            (2) Combined fuel economy.--The term ``combined fuel 
        economy'' means--
                    (A) the combined city-highway miles per gallon 
                values, as reported in accordance with section 32908 of 
                title 49, United States Code; and
                    (B) in the case of an electric drive vehicle with 
                the ability to recharge from an off-board source, the 
                reported mileage, as determined in a manner consistent 
                with the Society of Automotive Engineers recommended 
                practice for that configuration, or a similar practice 
                recommended by the Secretary of Energy, using a 
                petroleum equivalence factor for the off-board 
                electricity (as defined by the Secretary of Energy).
            (3) Engineering integration costs.--The term ``engineering 
        integration costs'' includes the cost of engineering tasks 
        relating to--
                    (A) incorporating qualifying components into the 
                design of advanced technology vehicles; and
                    (B) designing new tooling and equipment for 
                production facilities that produce qualifying 
                components or advanced technology vehicles.
            (4) Qualifying component.--The term ``qualifying 
        component'' means a component that the Secretary of Energy 
        determines to be--
                    (A) specially designed for advanced technology 
                vehicles; and
                    (B) installed for the purpose of meeting the 
                performance requirements of advanced technology 
                vehicles as specified in subparagraphs (A), (B), and 
                (C) of paragraph (1).
    (b) Manufacturer Facility Conversion Awards.--The Corporation shall 
provide facility conversion funding awards under this subsection to 
automobile manufacturers and component suppliers to pay up to 30 
percent of the cost of--
            (1) reequipping or expanding an existing manufacturing 
        facility to produce--
                    (A) qualifying advanced technology vehicles; or
                    (B) qualifying components; and
            (2) engineering integration of qualifying vehicles and 
        qualifying components.
    (c) Period of Availability.--An award under subsection (b) shall 
apply to--
            (1) facilities and equipment placed in service after the 
        date of enactment of this Act and before January 1, 2016; and
            (2) engineering integration costs incurred after the date 
        of enactment of this Act.

                      Subtitle E--Energy Consumers

SEC. 4501. PROPORTIONS OF FUNDING AVAILABILITY.

    All funds deposited into the Energy Assistance Fund established by 
section 4101 shall be made available, without further appropriation or 
fiscal year limitation, to the following programs in the following 
proportions:
            (1) 50 percent of the funds to 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.).
            (2) 25 percent of the funds to 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.).
            (3) 25 percent of the funds to the rural energy assistance 
        program described in section 4502.

SEC. 4502. RURAL ENERGY ASSISTANCE PROGRAM.

    The Secretary of Energy shall carry out a program to use the funds 
made available under section 4501(3) to provide financial assistance to 
promote the availability of reasonably-priced electricity in off-grid 
rural regions in which electricity prices exceed 150 percent of the 
national average, as determined by the Secretary of Energy.

           Subtitle F--Climate Change Worker Training Program

SEC. 4601. FUNDING.

    All funds deposited into the Climate Change Worker Training Fund 
established by section 4101 shall be made available, without further 
appropriation or fiscal year limitation, to carry out the programs 
established under this subtitle.

SEC. 4602. PURPOSES.

    The purposes of this subtitle are--
            (1) to provide quality job training to any workers 
        displaced by this Act;
            (2) to provide assistance in the form of temporary wages 
        and health care benefits to workers in training;
            (3) to transition workers into jobs created as a result of 
        this Act;
            (4) to provide skilled workers to enterprises developing 
        and marketing advanced technologies and practices that reduce 
        greenhouse gas emissions of the United States; and
            (5) to provide funding for State worker training programs.

SEC. 4603. ESTABLISHMENT.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary of Labor, in consultation with the Administrator and the 
Secretary of Energy, shall establish a climate change worker training 
program that achieves the purposes of this subtitle.

SEC. 4604. GRANTS TO STATES.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of Labor shall establish a program to award grants to States, 
for use in funding State worker training programs, based on the impact 
of this Act on the workforce of each State, as determined by the 
Secretary of Labor.

SEC. 4605. TYPES OF ASSISTANCE.

    The types of assistance that workers may receive under the climate 
change worker training program shall include, as determined by the 
Secretary of Labor--
            (1) income replacement;
            (2) health care credits;
            (3) travel costs incidental to participation in a training 
        program under this subtitle; and
            (4) a portion of the cost of relocating to a new job.

 Subtitle G--Adaptation Program for Natural Resources in United States 
                            and Territories

SEC. 4701. DEFINITIONS.

    In this subtitle:
            (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) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (7) 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. 4702. ADAPTATION FUND.

    (a) In General.--All amounts deposited in the Adaptation Fund 
established by section 4101 shall be made available, without further 
appropriation or fiscal year limitation, to carry out activities 
(including research and education activities) that assist fish and 
wildlife, fish and wildlife habitat, plants, and associated ecological 
processes in adapting to and surviving the impacts of climate change 
(referred to in this subtitle as ``adaptation activities'') pursuant to 
this subtitle.
    (b) Department of the Interior.--Of the amounts made available to 
carry out this subtitle--
            (1) 40 percent shall be allocated to the Secretary, 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 wildlife conservation strategies 
        and, where appropriate, other fish and wildlife conservation 
        strategies, including--
                    (A) plans under the National Fish Habitat 
                Initiative of the National Fish and Wildlife 
                Foundation;
                    (B) North American Wetlands Conservation Act (16 
                U.S.C. 4401 et seq.);
                    (C) the Federal, State, and local partnership known 
                as ``Partners in Flight'';
                    (D) coastal zone management plans;
                    (E) regional fishery management plans; and
                    (F) recovery plans for threatened and endangered 
                species under section 6 of the Endangered Species Act 
                of 1973 (16 U.S.C. 1535);
            (2) 20 percent shall be allocated to the Secretary 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, Bureau of Land Management, or National Park 
                Service; or
                    (C) within Federal water managed by the Bureau of 
                Reclamation; and
            (3) 5 percent shall be allocated to the Secretary for 
        adaptation activities carried out under cooperative grant 
        programs, including--
                    (A) the Tribal Wildlife Grants program of the 
                United States Fish and Wildlife Service;
                    (B) the cooperative endangered species conservation 
                fund authorized under section 6(i) of the Endangered 
                Species Act of 1973 (16 U.S.C. 1535(i));
                    (C) programs under the North American Wetlands 
                Conservation Act (16 U.S.C. 4401 et seq.);
                    (D) 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);
                    (E) 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);
                    (F) the Neotropical Migratory Bird Conservation 
                Fund established by section 9(a) of the Neotropical 
                Migratory Bird Conservation Act (16 U.S.C. 6108(a));
                    (G) the Coastal Program of the United States Fish 
                and Wildlife Service; and
                    (H) the National Fish Habitat Action Plan.
    (c) Forest Service.--Of the amounts made available each fiscal year 
to carry out this subtitle, 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.
    (d) Environmental Protection Agency.--Of the amounts made available 
to carry out this subtitle, 12.5 percent shall be allocated to the 
Administrator for use in restoring and protecting--
            (1) large-scale freshwater aquatic ecosystems, such as the 
        Everglades, the Great Lakes, Flathead Lake, the Missouri River, 
        and the Yellowstone River; and
            (2) large-scale estuarine ecosystems, such as Chesapeake 
        Bay and Long Island Sound.
    (e) Corps of Engineers.--Of the amounts made available to carry out 
this subtitle, 12.5 percent shall be allocated to the Corps of 
Engineers for use in restoring--
            (1) large-scale freshwater aquatic ecosystems, such as the 
        ecosystems described in subsection (d)(1); and
            (2) large-scale estuarine ecosystems, such as Chesapeake 
        Bay, California Bay Delta, Coastal Louisiana, Long Island 
        Sound, and Puget Sound.
    (f) Department of Commerce.--Of the amounts made available to carry 
out this subtitle, 5 percent shall be allocated to the Secretary of 
Commerce for use in funding adaptation activities carried out in 
protecting and restoring coastal, estuarine, coral, and marine species 
and habitats, including adaptation activities in cooperative grant 
programs such as--
            (1) the Coastal and Estuarine Land Conservation Program and 
        the Community-Based Restoration Program of the National Oceanic 
        and Atmospheric Administration; and
            (2) programs under the Coastal Zone Management Act of 1972 
        (16 U.S.C. 1451 et seq.).
    (g) Cost Sharing.--Notwithstanding any other provision of law, a 
State or Indian tribe that receives a grant under this section shall be 
required to provide 10 percent of the costs of each activity carried 
out using funds from the grant.
    (h) Comprehensive Adaptation Strategy.--
            (1) In general.--Effective beginning on the date that is 18 
        months after the date of enactment of this Act, funds made 
        available to the Federal agencies under this subtitle shall be 
        used only for activities that are consistent with a 
        comprehensive adaptation strategy that--
                    (A) is jointly approved by the head of each of the 
                Federal agencies, after--
                            (i) consultation with States and Indian 
                        tribes; and
                            (ii) solicitation of public and independent 
                        scientific input; and
                    (B) describes the manner in which the Federal 
                Government will assist fish and wildlife, fish and 
                wildlife habitat, plants, and associated ecological 
                processes in adapting to and surviving the impacts of 
                climate change.
            (2) Updating.--Each adaptation strategy described in 
        paragraph (1) shall be updated at least every 5 years.

        Subtitle H--Climate Change and National Security Program

SEC. 4801. INTERAGENCY CLIMATE CHANGE AND NATIONAL SECURITY COUNCIL.

    (a) Establishment.--There is established a Climate Change and 
National Security Council (referred to in this subtitle as the 
``Council'').
    (b) Membership.--The Council shall include--
            (1) the Secretary of State, who shall serve as Chairperson 
        of the Council;
            (2) the Administrator;
            (3) the Secretary of Defense; and
            (4) the Director of National Intelligence.
    (c) Duties.--The Council shall--
            (1) submit annual reports to the President, the Committees 
        on Environment and Public Works and Foreign Relations of the 
        Senate, and the Committees on Energy and Commerce and Foreign 
        Relations of the House of Representatives that describe--
                    (A) the extent to which other countries are 
                committing to reducing greenhouse gas emissions through 
                mandatory programs;
                    (B) the extent to which global climate change, 
                through the potential negative impacts of climate 
                change on sensitive populations and natural resources 
                in different regions of the world, may threaten, cause, 
                or exacerbate political instability or international 
                conflict in those regions; and
                    (C) the ramifications of any potentially 
                destabilizing impacts climate change may have on the 
                national security of the United States, including--
                            (i) the creation of refugees; and
                            (ii) international or intranational 
                        conflicts over water, food, land, or other 
                        resources; and
            (2) include in each annual report submitted under paragraph 
        (1) recommendations on whether it is necessary to enhance the 
        national security of the United States by funding programs with 
        amounts made available under section 4802 that the Council 
        determines would assist in avoiding the politically 
        destabilizing impacts of climate change in volatile regions of 
        the world.

SEC. 4802. FUNDING.

    Upon a determination for any calendar year by the President, based 
on any report and recommendations submitted by the Council under 
section 4801, that funds should be made available to carry out the 
recommendations--
            (1) notwithstanding section 4302(b)(2), the Corporation 
        shall deposit 5 percent of the proceeds from auctions that the 
        Corporation conducts for that calendar year under section 
        4302(a) into the Climate Change and National Security Fund 
        established by section 4101; and
            (2) the President shall use those funds to implement the 
        recommendations.

                           Subtitle I--Audits

SEC. 4901. REVIEW AND AUDIT BY COMPTROLLER GENERAL OF THE UNITED 
              STATES.

    Not later than January 1, 2014, and at least every 3 years 
thereafter, the Comptroller General of the United States shall review 
and audit the expenditures under this title to determine the efficacy 
of the programs, expenditures, and projects funded under this title.

                       TITLE V--ENERGY EFFICIENCY

                    Subtitle A--Appliance Efficiency

SEC. 5101. RESIDENTIAL BOILERS.

    Section 325(f) of the Energy Policy and Conservation Act (42 U.S.C. 
6925(f)) is amended--
            (1) in the subsection heading, by inserting ``and Boilers'' 
        after ``Furnaces'';
            (2) in paragraph (1), by striking ``except that'' and all 
        that follows through subparagraph (A) and inserting ``except 
        that'';
            (3) in subparagraph (B)--
                    (A) by striking ``(B) the Secretary'' and inserting 
                ``the Secretary''; and
                    (B) by redesignating clauses (i) through (iii) as 
                subparagraphs (A) through (C), respectively, and 
                indenting appropriately;
            (4) by redesignating paragraph (3) as paragraph (4); and
            (5) by inserting after paragraph (2) the following:
            ``(3) Boilers.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), boilers manufactured on or after September 1, 
                2012, shall meet the following requirements:


 
------------------------------------------------------------------------
                                  Minimum
                                Annual Fuel
   Boiler Type Requirements     Utilization             Design
                                 Efficiency
------------------------------------------------------------------------
Gas hot water.................   82 percent  No constant burning pilot,
                                              automatic means for
                                              adjusting water
                                              temperature
Gas steam.....................   80 percent  No constant burning pilot
Oil hot water.................   84 percent  Automatic means for
                                              adjusting temperature
Oil steam.....................   82 percent  None
Electric hot water............         None  Automatic means for
                                              adjusting temperature
Electric steam................         None  None
------------------------------------------------------------------------

                    ``(B) Automatic means for adjusting water 
                temperature.--
                            ``(i) In general.--The manufacturer shall 
                        equip each gas, oil, and electric hot water 
                        boiler (other than a boiler equipped with 
                        tankless domestic water heating coils) with an 
                        automatic means for adjusting the temperature 
                        of the water supplied by the boiler to ensure 
                        that an incremental change in inferred heat 
                        load produces a corresponding incremental 
                        change in the temperature of water supplied.
                            ``(ii) Certain boilers.--For a boiler that 
                        fires at 1 input rate, the requirements of this 
                        subparagraph may be satisfied by providing an 
                        automatic means that allows the burner or 
                        heating element to fire only when the means has 
                        determined that the inferred heat load cannot 
                        be met by the residual heat of the water in the 
                        system.
                            ``(iii) No inferred heat load.--When there 
                        is no inferred heat load with respect to a hot 
                        water boiler, the automatic means described in 
                        clauses (i) and (ii) shall limit the 
                        temperature of the water in the boiler to not 
                        more than 140 degrees Fahrenheit.
                            ``(iv) Operation.--A boiler described in 
                        clause (i) or (ii) shall be operable only when 
                        the automatic means described in clauses (i), 
                        (ii), and (iii) is installed.
                    ``(C) Exception.--A boiler that is manufactured to 
                operate without any need for electricity, any electric 
                connection, any electric gauges, electric pumps, 
                electric wires, or electric devices of any sort, shall 
                not be required to meet the requirements of this 
                subsection.''.

SEC. 5102. REGIONAL VARIATIONS IN HEATING OR COOLING STANDARDS.

    (a) In General.--Section 327 of the Energy Policy and Conservation 
Act (42 U.S.C. 6297) is amended--
            (1) by redesignating subsections (e), (f), and (g) as 
        subsections (f), (g), and (h), respectively; and
            (2) by inserting after subsection (d) the following:
    ``(e) Regional Standards for Space Heating and Air Conditioning 
Products.--
            ``(1) Standards.--
                    ``(A) In general.--The Secretary may establish 
                regional standards for space heating and air 
                conditioning products, other than window-unit air-
                conditioners and portable space heaters.
                    ``(B) National minimum and regional standards.--For 
                each space heating and air conditioning product, the 
                Secretary may establish--
                            ``(i) a national minimum standard; and
                            ``(ii) 2 more stringent regional standards 
                        for regions determined to have significantly 
                        differing climatic conditions.
                    ``(C) Maximum savings.--Any standards established 
                for a region under subparagraph (B)(ii) shall achieve 
                the maximum level of energy savings that are 
                technically feasible and economically justified within 
                that region.
                    ``(D) Economic justifiability study.--
                            ``(i) In general.--As a preliminary step in 
                        determining the economic justifiability of 
                        establishing a regional standard under 
                        subparagraph (B)(ii), the Secretary shall 
                        conduct a study involving stakeholders, 
                        including--
                                    ``(I) a representative from the 
                                National Institute of Standards and 
                                Technology;
                                    ``(II) representatives of 
                                nongovernmental advocacy organizations;
                                    ``(III) representatives of product 
                                manufacturers, distributors, and 
                                installers;
                                    ``(IV) representatives of the gas 
                                and electric utility industries; and
                                    ``(V) such other individuals as the 
                                Secretary may designate.
                            ``(ii) Requirements.--The study under this 
                        subparagraph--
                                    ``(I) shall determine the potential 
                                benefits and consequences of 
                                prescribing regional standards for 
                                heating and cooling products; and
                                    ``(II) may, if favorable to the 
                                standards, constitute the evidence of 
                                economic justifiability required under 
                                this Act.
                    ``(E) Regional boundaries.--Regional boundaries 
                used in establishing regional standards under 
                subparagraph (B)(ii) shall--
                            ``(i) conform to State borders; and
                            ``(ii) include only contiguous States 
                        (other than Alaska and Hawaii), except that on 
                        the request of a State, the Secretary may 
                        divide the State to include a part of the State 
                        in each of 2 regions.
            ``(2) Noncomplying products.--If the Secretary establishes 
        standards for a region, it shall be unlawful under section 332 
        to offer for sale at retail, sell at retail, or install within 
        the region products that do not comply with the applicable 
        standards.
            ``(3) Distribution in commerce.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no product manufactured in a manner 
                that complies with a regional standard established 
                under paragraph (1) shall be distributed in commerce 
                without a prominent label affixed to the product that 
                includes--
                            ``(i) at the top of the label, in print of 
                        not less than 14-point type, the following 
                        statement: `It is a violation of Federal law 
                        for this product to be installed in any State 
                        outside the region shaded on the map printed on 
                        this label.';
                            ``(ii) below the notice described in clause 
                        (i), an image of a map of the United States 
                        with clearly defined State boundaries and 
                        names, and with all States in which the product 
                        meets or exceeds the standard established 
                        pursuant to paragraph (1) shaded in a color or 
                        a manner as to be easily visible without 
                        obscuring the State boundaries and names; and
                            ``(iii) below the image of the map required 
                        under clause (ii), the following statement: `It 
                        is a violation of Federal law for this label to 
                        be removed, except by the owner and legal 
                        resident of any single-family home in which 
                        this product is installed.'.
                    ``(B) Energy-efficiency rating.--A product 
                manufactured that meets or exceeds all regional 
                standards established under this paragraph shall bear a 
                prominent label affixed to the product that includes at 
                the top of the label, in print of not less than 14-
                point type, the following statement: `This product has 
                achieved an energy-efficiency rating under Federal law 
                allowing its installation in any State.'.
            ``(4) Recordkeeping.--A manufacturer of space heating or 
        air conditioning equipment subject to regional standards 
        established under this subsection shall--
                    ``(A) obtain and retain records on the intended 
                installation locations of the equipment sold; and
                    ``(B) make such records available to the Secretary 
                on request.''.
    (b) Conforming Amendments.--Section 327 of the Energy Policy and 
Conservation Act (42 U.S.C. 6297) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (2), by striking ``subsection 
                (e)'' and inserting ``subsection (f)''; and
                    (B) in paragraph (3)--
                            (i) by striking ``subsection (f)(1)'' and 
                        inserting ``subsection (g)(1)''; and
                            (ii) by striking ``subsection (f)(2)'' and 
                        inserting ``subsection (g)(2)''; and
            (2) in subsection (c)(3), by striking ``subsection (f)(3)'' 
        and inserting ``subsection (g)(3)''.

                    Subtitle B--Building Efficiency

SEC. 5201. UPDATING STATE BUILDING ENERGY EFFICIENCY CODES.

    Section 304 of the Energy Conservation and Production Act (42 
U.S.C. 6833) is amended to read as follows:

``SEC. 304. UPDATING STATE BUILDING ENERGY EFFICIENCY CODES.

    ``(a) Updates.--
            ``(1) In general.--The Secretary shall support updating the 
        national model building energy codes and standards not later 
        than 3 years after the date of enactment of the America's 
        Climate Security Act of 2007, and not less frequently every 3 
        years thereafter, to achieve overall energy savings, as 
        compared to the IECC (2006) for residential buildings and 
        ASHRAE Standard 90.1 (2004) for commercial buildings, of at 
        least--
                    ``(A) 30 percent by 2010;
                    ``(B) 50 percent by 2020; and
                    ``(C) goals to be established by the Secretary in 
                intermediate and subsequent years, at the maximum level 
                of energy efficiency that is technologically feasible 
                and lifecycle cost effective.
            ``(2) Revisions to iecc and ashrae.--
                    ``(A) In general.--If the IECC or ASHRAE Standard 
                90.1 regarding building energy use is revised, not 
                later than 180 days after the date of the revision, the 
                Secretary shall determine whether the revision will--
                            ``(i) improve energy efficiency in 
                        buildings; and
                            ``(ii) meet the energy savings goals 
                        described in paragraph (1).
                    ``(B) Modifications.--
                            ``(i) In general.--If the Secretary makes a 
                        determination under subparagraph (A)(ii) that a 
                        code or standard does not meet the energy 
                        savings goals established under paragraph (1) 
                        or if a national model code or standard is not 
                        updated for more than 3 years, not later than 1 
                        year after the determination or the expiration 
                        of the 3-year period, the Secretary shall 
                        propose a modified code or standard that meets 
                        the energy savings goals.
                            ``(ii) Requirements.--
                                    ``(I) Energy savings.--A 
                                modification to a code or standard 
                                under clause (i) shall--
                                            ``(aa) achieve the maximum 
                                        level of energy savings that is 
                                        technically feasible and 
                                        economically justified; and
                                            ``(bb) incorporate 
                                        available appliances, 
                                        technologies, and construction 
                                        practices.
                                    ``(II) Treatment as baseline.--A 
                                modification to a code or standard 
                                under clause (i) shall serve as the 
                                baseline for the next applicable 
                                determination of the Secretary under 
                                subparagraph (A)(i).
                    ``(C) Public participation.--The Secretary shall--
                            ``(i) publish in the Federal Register a 
                        notice relating to each goal, determination, 
                        and modification under this paragraph; and
                            ``(ii) provide an opportunity for public 
                        comment regarding the goals, determinations, 
                        and modifications.
    ``(b) State Certification of Building Energy Code Updates.--
            ``(1) General certification.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of the America's Climate Security Act 
                of 2007, each State shall certify to the Secretary that 
                the State has reviewed and updated the provisions of 
                the residential and commercial building codes of the 
                State regarding energy efficiency.
                    ``(B) Energy savings.--A certification under 
                subparagraph (A) shall include a demonstration that the 
                applicable provisions of the State code meet or exceed, 
                as applicable--
                            ``(i)(I) the IECC (2006) for residential 
                        buildings; or
                            ``(II) the ASHRAE Standard 90.1 (2004) for 
                        commercial buildings; or
                            ``(ii) the quantity of energy savings 
                        represented by the provisions referred to in 
                        clause (i).
            ``(2) Revision of codes and standards.--
                    ``(A) In general.--If the Secretary makes an 
                affirmative determination under subsection (a)(2)(A)(i) 
                or proposes a modified code or standard under 
                subsection (a)(2)(B), not later than 2 years after the 
                determination or proposal, each State shall certify 
                that the State has reviewed and updated the provisions 
                of the residential and commercial building codes of the 
                State regarding energy efficiency.
                    ``(B) Energy savings.--A certification under 
                subparagraph (A) shall include a demonstration that the 
                applicable provisions of the State code meet or 
                exceed--
                            ``(i) the modified code or standard; or
                            ``(ii) the quantity of energy savings 
                        represented by the modified code or standard.
                    ``(C) Failure to determine.--If the Secretary fails 
                to make a determination under subsection (a)(2)(A)(i) 
                by the date specified in subsection (a)(2), or if the 
                Secretary makes a negative determination, not later 
                than 2 years after the specified date or the date of 
                the determination, each State shall certify that the 
                State has--
                            ``(i) reviewed the revised code or 
                        standard; and
                            ``(ii) updated the provisions of the 
                        residential and commercial building codes of 
                        the State as necessary to meet or exceed, as 
                        applicable--
                                    ``(I) any provisions of a national 
                                code or standard determined to improve 
                                energy efficiency in buildings; or
                                    ``(II) energy savings achieved by 
                                those provisions through other means.
    ``(c) Achievement of Compliance by States.--
            ``(1) In general.--Not later than 3 years after the date on 
        which a State makes a certification under subsection (b), the 
        State shall certify to the Secretary that the State has 
        achieved compliance with the national building energy code that 
        is the subject of the certification.
            ``(2) Rate of compliance.--The certification shall include 
        documentation of the rate of compliance based on independent 
        inspections of a random sample of the new and renovated 
        buildings covered by the State code during the preceding 
        calendar year.
            ``(3) Compliance.--A State shall be considered to achieve 
        compliance for purposes of paragraph (1) if--
                    ``(A) at least 90 percent of new and renovated 
                buildings covered by the State code during the 
                preceding calendar year substantially meet all the 
                requirements of the code; or
                    ``(B) the estimated excess energy use of new and 
                renovated buildings that did not meet the requirements 
                of the State code during the preceding calendar year, 
                as compared to a baseline of comparable buildings that 
                meet the requirements of the code, is not more than 10 
                percent of the estimated energy use of all new and 
                renovated buildings covered by the State code during 
                the preceding calendar year.
    ``(d) Failure to Certify.--
            ``(1) Extension of deadlines.--The Secretary shall extend a 
        deadline for certification by a State under subsection (b) or 
        (c) for not more than 1 additional year, if the State 
        demonstrates to the satisfaction of the Secretary that the 
        State has made--
                    ``(A) a good faith effort to comply with the 
                certification requirement; and
                    ``(B) significant progress with respect to the 
                compliance.
            ``(2) Noncompliance by state.--
                    ``(A) In general.--A State that fails to submit a 
                certification required under subsection (b) or (c), and 
                to which an extension is not provided under paragraph 
                (1), shall be considered to be out of compliance with 
                this section.
                    ``(B) Effect on local governments.--A local 
                government of a State that is out of compliance with 
                this section may be considered to be in compliance with 
                this section if the local government meets each 
                applicable certification requirement of this section.
    ``(e) Technical Assistance.--
            ``(1) In general.--The Secretary shall provide technical 
        assistance (including building energy analysis and design 
        tools, building demonstrations, and design assistance and 
        training) to ensure that national model building energy codes 
        and standards meet the goals described in subsection (a)(1).
            ``(2) Assistance to states.--The Secretary shall provide 
        technical assistance to States--
                    ``(A) to implement this section, including 
                procedures for States to demonstrate that the codes of 
                the States achieve equivalent or greater energy savings 
                than the national model codes and standards;
                    ``(B) to improve and implement State residential 
                and commercial building energy efficiency codes; and
                    ``(C) to otherwise promote the design and 
                construction of energy-efficient buildings.
    ``(f) Incentive Funding.--
            ``(1) In general.--The Secretary shall provide incentive 
        funding to States--
                    ``(A) to implement this section; and
                    ``(B) to improve and implement State residential 
                and commercial building energy efficiency codes, 
                including increasing and verifying compliance with the 
                codes.
            ``(2) Amount.--In determining whether, and in what amount, 
        to provide incentive funding under this subsection, the 
        Secretary shall take into consideration actions proposed by the 
        State--
                    ``(A) to implement this section;
                    ``(B) to implement and improve residential and 
                commercial building energy efficiency codes; and
                    ``(C) to promote building energy efficiency through 
                use of the codes.
            ``(3) Additional funding.--The Secretary shall provide 
        additional funding under this subsection for implementation of 
        a plan to demonstrate a rate of compliance with applicable 
        residential and commercial building energy efficiency codes at 
        a rate of not less than 90 percent, based on energy 
        performance--
                    ``(A) to a State that has adopted and is 
                implementing, on a statewide basis--
                            ``(i) a residential building energy 
                        efficiency code that meets or exceeds the 
                        requirements of the IECC (2006) (or a successor 
                        code that is the subject of an affirmative 
                        determination by the Secretary under subsection 
                        (a)(2)(A)(i)); and
                            ``(ii) a commercial building energy 
                        efficiency code that meets or exceeds the 
                        requirements of the ASHRAE Standard 90.1 (2004) 
                        (or a successor standard that is the subject of 
                        an affirmative determination by the Secretary 
                        under subsection (a)(2)(A)(i)); or
                    ``(B) in the case of a State in which no statewide 
                energy code exists for residential buildings or 
                commercial buildings, or in which the State code fails 
                to comply with subparagraph (A), to a local government 
                that has adopted and is implementing residential and 
                commercial building energy efficiency codes, as 
                described in subparagraph (A).
            ``(4) Training.--Of the amounts made available to carry out 
        this subsection, the Secretary may use not more than $500,000 
        for each State to train State and local officials to implement 
        State or local energy codes in accordance with a plan described 
        in paragraph (3).''.

SEC. 5202. CONFORMING AMENDMENT.

    Section 303 of the Energy Conservation and Production Act (42 
U.S.C. 6832) is amended by adding at the end the following new 
paragraph:
            ``(17) IECC.--The term `IECC' means the International 
        Energy Conservation Code.''.

       TITLE VI--GLOBAL EFFORT TO REDUCE GREENHOUSE GAS EMISSIONS

SEC. 6001. DEFINITIONS.

    In this title:
            (1) Baseline emission level.--The term ``baseline emission 
        level'' means, as determined by the Administrator, the total 
        average annual greenhouse gas emissions attributed to a 
        category of covered goods of a foreign country during the 
        period beginning on January 1, 2012, and ending on December 31, 
        2014, based on--
                    (A) relevant data available for that period; and
                    (B) 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.
            (2) Comparable action.--The term ``comparable action'' 
        means any greenhouse gas regulatory programs, requirements, and 
        other measures adopted by a foreign country that, in 
        combination, are comparable in effect to actions carried out by 
        the United States to limit greenhouse gas emissions pursuant to 
        this Act, as determined by the President, taking into 
        consideration the level of economic development of the foreign 
        country.
            (3) 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 foreign 
        country that is imported into the United States.
            (4) Covered foreign country.--The term ``covered foreign 
        country'' means a foreign country that is included on the 
        covered list prepared under section 6006(b)(3).
            (5) Covered good.--The term ``covered good'' means a good 
        that (as identified by the Administrator by rule)--
                    (A) is a primary product;
                    (B) generates, in the course of the manufacture of 
                the good, a substantial quantity of direct greenhouse 
                gas emissions and 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.
            (6) Foreign country.--The term ``foreign country'' means a 
        member of, or observer government to, the World Trade 
        Organization (WTO), other than the United States.
            (7) Indirect greenhouse gas emissions.--The term ``indirect 
        greenhouse gas emissions'' means any emissions of a greenhouse 
        gas resulting from the generation of electricity that is 
        consumed during the manufacture of a good.
            (8) International agreement.--The term ``international 
        agreement'' means any international agreement to which the 
        United States is a party, including the Marrakesh agreement 
        establishing the World Trade Organization, done at Marrakesh on 
        April 15, 1994.
            (9) 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 allowances 
                pursuant to section 6006(a)(2); and
                    (B) used for purposes of meeting the requirements 
                of section 6006.
            (10) Primary product.--The term ``primary product'' means--
                    (A) iron, steel, aluminum, cement, bulk glass, or 
                paper; 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, direct 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.

SEC. 6002. PURPOSES.

    The purposes of this title are--
            (1) to promote a strong global effort to significantly 
        reduce greenhouse gas emissions;
            (2) to ensure, to the maximum extent practicable, that 
        greenhouse gas emissions occurring outside the United States do 
        not undermine the objectives of the United States in addressing 
        global climate change; and
            (3) to encourage effective international action to achieve 
        those objectives through--
                    (A) agreements negotiated between the United States 
                and foreign countries; and
                    (B) measures carried out by the United States that 
                comply with applicable international agreements.

SEC. 6003. INTERNATIONAL NEGOTIATIONS.

    (a) Finding.--Congress finds that the purposes described in section 
6002 can be most effectively addressed and achieved through agreements 
negotiated between the United States and foreign countries.
    (b) Negotiating Objective.--
            (1) Statement of policy.--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 committing all major greenhouse 
        gas-emitting nations to contribute equitably to the reduction 
        of global greenhouse gas emissions.
            (2) Intent of congress regarding objective.--To the extent 
        that the agreements described in subsection (a) involve 
        measures that will affect international trade in any good or 
        service, it is the intent of 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 to advance achievement of the purposes 
        described in section 6002.

SEC. 6004. INTERAGENCY REVIEW.

    (a) Interagency Group.--
            (1) Establishment.--The President shall establish an 
        interagency group to carry out this section.
            (2) Chairperson.--The chairperson of the interagency group 
        established under paragraph (1) shall be the Secretary of 
        State.
            (3) Requirement.--The Administrator shall be a member of 
        the interagency group.
    (b) Determinations.--
            (1) In general.--Subject to paragraph (2), the interagency 
        group established under subsection (a)(1) shall determine 
        whether, and the extent to which, each foreign country has 
        taken comparable action to limit the greenhouse gas emissions 
        of the foreign country.
            (2) Exemption.--The interagency group may exempt from a 
        determination under paragraph (1) any foreign country on the 
        excluded list under section 6006(b)(2).
    (c) Report to President.--Not later than January 1, 2018, and 
annually thereafter, the interagency group shall submit to the 
President a report describing the determinations of the interagency 
group under subsection (b).

SEC. 6005. PRESIDENTIAL DETERMINATIONS.

    (a) In General.--Not later than January 1, 2019, and annually 
thereafter, the President shall determine whether each foreign country 
that is subject to interagency review under section 6004(b) has taken 
comparable action to limit the greenhouse gas emissions of the foreign 
country, taking into consideration--
            (1) the baseline emission levels of the foreign country; 
        and
            (2) applicable reports submitted under section 6004(c).
    (b) 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. 6006. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

    (a) Establishment.--
            (1) In general.--The Administrator shall establish a 
        program under which the Administrator, during the 1-year period 
        beginning on January 1, 2019, 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 
        allowances that is separate from, and established in addition 
        to, the quantity of allowances established under section 1201.
            (3) Price.--
                    (A) In general.--Subject to subparagraph (B), the 
                Administrator 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 allowances 
                established under section 1201 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 by the Corporation.
            (4) Serial number.--The Administrator shall assign a unique 
        serial number to each international reserve allowance issued 
        under this subsection.
            (5) Trading system.--The Administrator may establish, by 
        rule, a system for the sale, exchange, purchase, transfer, and 
        banking of international reserve allowances.
            (6) Regulated entities.--International reserve allowances 
        may not be submitted by regulated entities to comply with the 
        allowance submission requirements of section 1202.
            (7) Proceeds.--All proceeds from the sale of international 
        reserve allowances under this subsection shall be allocated to 
        a program that the Administrator, in coordination with the 
        Secretary of State, shall establish to mitigate the negative 
        impacts of global climate change on disadvantaged communities 
        in other countries.
    (b) Foreign Country Lists.--
            (1) In general.--Not later than January 1, 2020, and 
        annually thereafter, the President shall develop and publish in 
        the Federal Register 2 lists of foreign countries, in 
        accordance with this subsection.
            (2) Excluded list.--
                    (A) In general.--The President shall identify and 
                publish in a list, to be known as the ``excluded 
                list'', each foreign country the share of total global 
                greenhouse gas emissions of which is below the de 
                minimis percentage described in subparagraph (B).
                    (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 President, 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 
                foreign country that is a developing country.
            (3) Covered list.--
                    (A) In general.--The President shall identify and 
                publish in a list, to be known as the ``covered list'', 
                each foreign country the covered goods of which are 
                subject to the requirements of this section.
                    (B) Requirement.--The covered list shall include 
                each foreign country that is not included on the 
                excluded list under paragraph (2).
    (c) Written Declarations.--
            (1) In general.--Effective beginning January 1, 2020, a 
        United States importer of any covered good shall, as a 
        condition of importation or withdrawal for consumption from a 
        warehouse of the covered good, submit to the Administrator and 
        the appropriate office of the U.S. Customs and Border 
        Protection a written declaration with respect to each such 
        importation or withdrawal.
            (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 (d); or
                    (B) the covered good is from a foreign country on 
                the excluded list under subsection (b)(2).
            (3) Inclusion.--A written declaration described in 
        paragraph (2)(A) shall include the unique serial number of each 
        emission allowance associated with the importation of the 
        applicable covered good.
            (4) Failure to declare.--
                    (A) In general.--Except as provided in subparagraph 
                (B), an imported covered good that is not accompanied 
                by a written declaration under this subsection shall 
                not be permitted to enter the customs territory of the 
                United States.
                    (B) Exception for certain imports.--Subparagraph 
                (A) shall not apply to a covered good of a foreign 
                country if the President determines that--
                            (i) the foreign country has taken 
                        comparable action to limit the greenhouse gas 
                        emissions of the foreign country, in accordance 
                        with section 6005;
                            (ii) the United Nations has identified the 
                        foreign country as among the least-developed of 
                        developing countries; or
                            (iii) the foreign country is on the 
                        excluded list under subsection (b)(2).
            (5) 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 Administrator and the 
                office of the U.S. Customs and Border Protection to 
                which the original declaration was submitted.
    (d) Quantity of Allowances Required.--
            (1) Methodology.--
                    (A) In general.--The Administrator 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 (c), for each category of 
                covered goods of each covered foreign country.
                    (B) Formula.--The Administrator 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 foreign 
                country that is imported during each compliance year.
            (2) Initial compliance year.--
                    (A) In general.--Subject to subparagraph (B), the 
                methodology under paragraph (1) shall establish an 
                international reserve allowance requirement (per unit 
                imported into the United States) for the initial 
                compliance year for each category of covered goods of 
                each covered foreign country that is equal to the 
                quotient obtained by dividing--
                            (i) the excess, if any, of the total 
                        emissions from the covered foreign country that 
                        are attributable to the category of covered 
                        goods produced during the most recent year for 
                        which data are available, over the baseline 
                        emission level of the covered foreign country 
                        for that category; and
                            (ii) the total quantity of the covered good 
                        produced in the covered foreign country during 
                        the most recent calendar year.
                    (B) Adjustments.--The Administrator shall adjust 
                the requirement under subparagraph (A)--
                            (i) in accordance with the ratio that--
                                    (I) the quantity of allowances that 
                                were allocated at no cost to entities 
                                within the industry sector 
                                manufacturing the covered goods for the 
                                compliance year during which the 
                                covered goods were imported into the 
                                United States; bears to
                                    (II) the greenhouse gas emissions 
                                of that industry sector; and
                            (ii) to take into account the level of 
                        economic development of the covered foreign 
                        country in which the covered goods were 
                        produced.
            (3) Subsequent compliance years.--For each subsequent 
        compliance year, the Administrator shall revise, as 
        appropriate, the international reserve allowance requirement 
        applicable to each category of imported covered goods of each 
        covered foreign country to reflect changes in the factors 
        described in paragraph (2)(B).
            (4) Publication.--Not later than 90 days before the 
        beginning of each compliance year, the Administrator 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 foreign 
        country, as calculated under this subsection.
    (e) Foreign Allowances and Credits.--
            (1) Foreign allowances.--
                    (A) In general.--A United States importer may 
                submit, in lieu of an international reserve allowance 
                issued under this section, a foreign allowance or 
                similar compliance instrument distributed by a foreign 
                country pursuant to a cap and trade program that 
                represents a comparable action.
                    (B) Commensurate cap and trade program.--For 
                purposes of subparagraph (A), a cap and trade program 
                that represents a comparable action shall include any 
                greenhouse gas regulatory program adopted by a covered 
                foreign country to limit the greenhouse gas emissions 
                of the covered foreign country, if the President 
                certifies that the program--
                            (i)(I) places a quantitative limitation on 
                        the total quantity of greenhouse gas emissions 
                        of the covered foreign country (expressed in 
                        terms of tons emitted per calendar year); and
                            (II) achieves that limitation through an 
                        allowance trading system;
                            (ii) satisfies such criteria as the 
                        President may establish for requirements 
                        relating to the enforceability of the cap and 
                        trade program, including requirements for 
                        monitoring, reporting, verification procedures, 
                        and allowance tracking; and
                            (iii) is a comparable action.
            (2) Foreign credits.--
                    (A) In general.--A United States importer may 
                submit, in lieu of an international reserve allowance 
                issued under this section, a foreign credit or a credit 
                for an international offset project that the 
                Administrator has authorized for use under subtitle E 
                of title II.
                    (B) Application.--The limitation on the use of 
                international reserve allowances by regulated entities 
                under subsection (a)(6) shall not apply to a United 
                States importer for purposes of this paragraph.
    (f) Retirement of Allowances.--The Administrator shall retire each 
international reserve allowance, foreign allowance, and foreign credit 
submitted to achieve compliance with this section.
    (g) Consistency With International Agreements.--The Administrator, 
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 foreign 
country) as the Administrator determines to be necessary to ensure that 
the United States complies with all applicable international 
agreements.
    (h) Termination.--The international reserve allowance requirements 
of this section shall not apply to a covered good of a covered foreign 
country in any case in which the President makes a determination 
described in subsection (b)(2) with respect to the covered goods of 
that covered foreign country.
    (i) Final Regulations.--Not later than January 1, 2019, the 
Administrator shall promulgate such regulations as the Administrator 
determines to be necessary to carry out this section.

SEC. 6007. ADJUSTMENT OF INTERNATIONAL RESERVE ALLOWANCE REQUIREMENTS.

    (a) In General.--Not later than January 1, 2023, and annually 
thereafter, the President shall prepare and submit to Congress a report 
that assesses the effectiveness of the applicable international reserve 
allowance requirements under section 6006 with respect to the covered 
goods of each covered foreign country.
    (b) Inadequate Requirements.--If the President determines that an 
applicable international reserve allowance requirement is not adequate 
to achieve the purposes of this title, the President, simultaneously 
with the submission of the report under subsection (a), shall--
            (1) adjust the requirement; or
            (2) take such other action as the President determines to 
        be necessary to improve the effectiveness of the requirement, 
        in accordance with all applicable international agreements.
    (c) Effective Date.--An adjustment under subsection (b)(1) shall 
take effect beginning on January 1 of the compliance year immediately 
following the date on which the adjustment is made.

                           TITLE VII--REVIEWS

SEC. 7001. NATIONAL ACADEMY OF SCIENCES REVIEW.

    (a) Report.--
            (1) In general.--Not later than January 1, 2012, and every 
        3 years thereafter, the Administrator shall offer to enter into 
        a contract with the National Academy of Sciences under which 
        the Academy shall submit to Congress and the Administrator 
        reports evaluating the implementation of this Act.
            (2) Contents of report.--Each report submitted to Congress 
        under paragraph (1) shall include an analysis of--
                    (A) the extent to which the emission reductions 
                required under this Act are being achieved;
                    (B) the extent to which the emission reductions 
                achieved under this Act, taken together with actual 
                steps taken by other countries to reduce greenhouse gas 
                emissions, is predicted to stabilize atmospheric 
                greenhouse gas concentrations at a level adequate to 
                forestall dangerous anthropogenic interference with the 
                climate system;
                    (C) 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;
                    (D)(i) predicted changes in ocean acidity, the 
                extent of coral reefs, and other indicators of ocean 
                ecosystem health due to anthropogenic carbon dioxide; 
                and
                    (ii) any additional actions that should be taken by 
                the United States or other countries to protect the 
                health of the oceans;
                    (E) the status of the best available science and 
                the status of technologies to reduce, sequester, or 
                avoid greenhouse gas emissions;
                    (F) whether the percentage of allowances for any 
                calendar year that are auctioned, allocated, or devoted 
                to other purposes under this Act should be modified;
                    (G) the effectiveness of auction revenues in 
                meeting the stated purposes of this Act; and
                    (H) whether additional measures, including an 
                increase in the earned income tax credit, a reduction 
                in payroll taxes, or the implementation of electronic 
                benefit transfers by State health and human services 
                agencies to reach low-income individuals who are not 
                required to file Federal income tax returns, are needed 
                to help low- and moderate-income individuals respond to 
                changes in the cost of energy-related goods and 
                services.
    (b) Technology Reports.--
            (1) Definition.--In this subsection, the term 
        ``technologically infeasible,'' with respect to a technology, 
        means that the technology--
                    (A) will not be demonstrated beyond laboratory-
                scale conditions;
                    (B) would be unsafe;
                    (C) would not reliably reduce greenhouse gas 
                emissions; or
                    (D) would prevent the activity to which the 
                technology applies from meeting or performing the 
                primary purpose of the activity (such as generating 
                electricity or transporting goods or individuals).
            (2) Reports.--Not later than 180 days after the date of 
        enactment of this Act, the Administrator shall offer to enter 
        into a contract with the National Academy of Sciences under 
        which the Academy, not later than 2 years after the date of 
        enactment of this Act and every 3 years thereafter, shall 
        submit to Congress and the Administrator a report that 
        describes or analyzes--
                    (A) the status of current greenhouse gas emission 
                reduction technologies, including--
                            (i) technologies for capture and disposal 
                        of greenhouse gases;
                            (ii) efficiency improvement technologies;
                            (iii) zero-greenhouse gas emitting energy 
                        technologies; and
                            (iv) above- and below-ground biological 
                        sequestration technologies;
                    (B) whether the requirements of this Act (including 
                regulations promulgated under this Act)--
                            (i) promote the development and deployment 
                        of greenhouse gas emission reduction 
                        technologies; or
                            (ii) mandate a level of emission control or 
                        reduction that, based on available or expected 
                        technology, will be technologically infeasible 
                        at the time at which the requirements become 
                        effective;
                    (C) the projected date on which any technology 
                determined to be technologically infeasible will become 
                technologically feasible;
                    (D) whether any technology determined to be 
                technologically infeasible cannot reasonably be 
                expected to become technologically feasible prior to 
                calendar year 2050; and
                    (E) the costs of available alternative greenhouse 
                gas emission reduction strategies that could be used or 
                pursued in lieu of any technologies that are determined 
                to be technologically infeasible.

SEC. 7002. TRANSPORTATION SECTOR REVIEW.

    (a) Review.--Not later than January 1, 2010, the Administrator 
shall conduct a comprehensive review and analysis to determine whether 
any of the following have occurred:
            (1)(A) The motor vehicle fuel and motor vehicle and nonroad 
        regulations within the scope of Executive Order 13432 (72 Fed. 
        Reg. 27717; relating to cooperation among agencies in 
        protecting the environment with respect to greenhouse gas 
        emissions from motor vehicles, nonroad vehicles, and nonroad 
        engines) have been finalized and implemented by Federal 
        agencies and departments.
            (B) Any other transportation-related programs, including 
        corporate average fuel economy standard reform, greenhouse gas 
        vehicle emissions standards, renewable fuel volume mandates, 
        low carbon fuel standards, and activities to reduce vehicle 
        miles traveled have been finalized and implemented by a Federal 
        agency or department.
            (2) Any regulation or program described in paragraph (1) is 
        expected to achieve at least 1 of the following, as compared to 
        the baseline greenhouse gas emissions consistent with the 
        reference case contained in the report of the Energy 
        Information Administration entitled ``Annual Energy Outlook 
        2006'':
                    (A) At least a 6.2-percent reduction in cumulative 
                greenhouse gas emissions from the light-duty motor 
                vehicle sector, including light-duty vehicles and 
                light-duty trucks, during the period beginning on 
                January 1, 2010, and ending on December 31, 2020.
                    (B) A cumulative reduction of approximately 
                1,140,000 metric tons of carbon dioxide equivalent, 
                measured on a full fuel cycle basis.
    (b) Report.--If the Administrator determines that a reduction 
described in subsection (a)(2)(A) will not be achieved, the 
Administrator shall submit to Congress, not later than January 1, 2010, 
a report describing--
            (1) any additional action of the Administrator that will be 
        necessary to reduce greenhouse gas emissions from the light-
        duty motor vehicle sector; and
            (2) recommendations of the Administrator with respect to 
        actions that could be established by Congress to ensure that 
        the United States transportation sector will achieve--
                    (A) the reductions described in subsection 
                (a)(2)(B); and
                    (B) any additional reductions necessary for that 
                sector to assume an equitable share of responsibility 
                for reducing greenhouse gas emissions.

SEC. 7003. ADAPTATION REVIEW.

    (a) Regional Estimates.--
            (1) Estimates.--
                    (A) In general.--The Administrator, in consultation 
                with the officials described in paragraph (2) and 
                relevant State agencies, shall conduct 6 regional 
                infrastructure cost assessments in various regions of 
                the United States, and a national cost assessment, to 
                provide estimates of the range of costs that should be 
                anticipated for adaptation to the impacts of climate 
                change.
                    (B) Various probabilities.--The Administrator shall 
                develop the estimates under subparagraph (A) for low, 
                medium, and high probabilities of climate change and 
                the potential impacts of climate change.
            (2) Description of officials.--The officials referred to in 
        paragraph (1) are--
                    (A) the Secretary of Agriculture;
                    (B) the Secretary of Commerce;
                    (C) the Secretary of Defense;
                    (D) the Secretary of Energy;
                    (E) the Secretary of Health and Human Services;
                    (F) the Secretary of Homeland Security;
                    (G) the Secretary of Housing and Urban Development;
                    (H) the Secretary of the Interior;
                    (I) the Secretary of Transportation;
                    (J) the Director of United States Geological 
                Survey; and
                    (K) the heads of such other Federal agencies and 
                departments as the Administrator determines to be 
                necessary.
            (3) Submission to congress.--Not later than 1 year after 
        the date of enactment of this Act, the Administrator shall 
        submit to Congress a report describing the results of the 
        assessments conducted under this subsection.
    (b) Adaptation Plan.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Administrator shall submit to 
        Congress a climate change adaptation plan for the United 
        States, based on--
                    (A) assessments performed by the United Nations 
                Intergovernmental Panel on Climate Change in accordance 
                with the Global Change Research Act of 1990 (15 U.S.C. 
                2921 et seq.); and
                    (B) any other scientific, peer-reviewed regional 
                assessments.
            (2) Inclusions.--The adaptation plan under paragraph (1) 
        shall include--
                    (A) a prioritized list of vulnerable systems and 
                regions in the United States;
                    (B) requirements for coordination between Federal, 
                State, and local governments to ensure that key public 
                infrastructure, safety, health, and land use planning 
                and control issues are addressed;
                    (C) requirements for coordination among the Federal 
                Government, industry, and communities;
                    (D) an assessment of climate change science 
                research needs, including probabilistic assessments as 
                an aid to planning;
                    (E) an assessment of climate change technology 
                needs; and
                    (F) regional and national cost assessments for the 
                range of costs that should be anticipated for adapting 
                to the impacts of climate change.
    (c) Impacts of Climate Change on Low-Income Populations.--
            (1) In general.--The Administrator shall conduct research 
        on the impact of climate change on low-income populations in 
        all countries, including--
                    (A) an assessment of the adverse impact of climate 
                change on--
                            (i) low-income populations in the United 
                        States; and
                            (ii) developing countries;
                    (B)(i) an identification of appropriate climate 
                change adaptation measures and programs for developing 
                countries and low-income populations;
                    (ii) an assessment of the impact of the measures 
                and programs on low-income populations; and
                    (C) an estimate of the costs of developing and 
                implementing those climate change adaptation and 
                mitigation programs.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator shall submit to 
        Congress a report describing the results of the research 
        conducted under paragraph (1).

  TITLE VIII--FRAMEWORK FOR GEOLOGICAL SEQUESTRATION OF CARBON DIOXIDE

SEC. 8001. NATIONAL DRINKING WATER REGULATIONS.

    (a) In General.--Section 1421 of the Safe Drinking Water Act (42 
U.S.C. 300h) is amended--
            (1) in subsection (b)(1), by striking ``subsection (d)(2)'' 
        and inserting ``subsection (e)(2)'';
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting after subsection (c) the following:
    ``(d) Carbon Dioxide.--
            ``(1) Regulations.--Not later than 1 year after the date of 
        enactment of the America's Climate Security Act of 2007, the 
        Administrator shall promulgate regulations for permitting 
        commercial-scale underground injection of carbon dioxide for 
        purposes of geological sequestration to address climate change, 
        including provisions--
                    ``(A) for monitoring and controlling the long-term 
                storage of carbon dioxide and avoiding, to the maximum 
                extent practicable, any release of carbon dioxide into 
                the atmosphere, and for ensuring protection of 
                underground sources of drinking water, human health, 
                and the environment; and
                    ``(B) relating to long-term liability associated 
                with commercial-scale geological sequestration.
            ``(2) Subsequent reports.--Not later than 5 years after the 
        date on which regulations are promulgated pursuant to paragraph 
        (1), and not less frequently than once every 5 years 
        thereafter, the Administrator shall submit to Congress a report 
        that contains an evaluation of the effectiveness of the 
        regulations, based on current knowledge and experience, with 
        particular emphasis on any new information on potential impacts 
        of commercial-scale geological sequestration on drinking water, 
        human health, and the environment.
            ``(3) Revision.--If the Administrator determines, based on 
        a report under paragraph (2), that regulations promulgated 
        pursuant to paragraph (1) require revision, the Administrator 
        shall promulgate revised regulations not later than 1 year 
        after the date on which the applicable report is submitted to 
        Congress under paragraph (2).''.
    (b) Conforming Amendment.--Section 1447(a)(4) of the Safe Drinking 
Water Act (42 U.S.C. 300j-6(a)(4)) is amended by striking ``section 
1421(d)(2)'' and inserting ``section 1421(e)(2)''.

SEC. 8002. ASSESSMENT OF GEOLOGICAL STORAGE CAPACITY FOR CARBON 
              DIOXIDE.

    (a) Definitions.--In this section:
            (1) Assessment.--The term ``assessment'' means the national 
        assessment of capacity for carbon dioxide completed under 
        subsection (f).
            (2) Capacity.--The term ``capacity'' means the portion of a 
        storage formation that can retain carbon dioxide in accordance 
        with the requirements (including physical, geological, and 
        economic requirements) established under the methodology 
        developed under subsection (b).
            (3) Engineered hazard.--The term ``engineered hazard'' 
        includes the location and completion history of any well that 
        could affect a storage formation or capacity.
            (4) Risk.--The term ``risk'' includes any risk posed by a 
        geomechanical, geochemical, hydrogeological, structural, or 
        engineered hazard.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior, acting through the Director of the United 
        States Geological Survey.
            (6) Storage formation.--The term ``storage formation'' 
        means a deep saline formation, unmineable coal seam, or oil or 
        gas reservoir that is capable of accommodating a volume of 
        industrial carbon dioxide.
    (b) Methodology.--Not later than 1 year after the date of enactment 
of this Act, the Secretary shall develop a methodology for conducting 
an assessment under subsection (f), taking into consideration--
            (1) the geographical extent of all potential storage 
        formations in all States;
            (2) the capacity of the potential storage formations;
            (3) the injectivity of the potential storage formations;
            (4) an estimate of potential volumes of oil and gas 
        recoverable by injection and storage of industrial carbon 
        dioxide in potential storage formations;
            (5) the risk associated with the potential storage 
        formations; and
            (6) the work performed to develop the Carbon Sequestration 
        Atlas of the United States and Canada completed by the 
        Department of Energy in April 2006.
    (c) Coordination.--
            (1) Federal coordination.--
                    (A) Consultation.--The Secretary shall consult with 
                the Secretary of Energy and the Administrator regarding 
                data sharing and the format, development of 
                methodology, and content of the assessment to ensure 
                the maximum usefulness and success of the assessment.
                    (B) Cooperation.--The Secretary of Energy and the 
                Administrator shall cooperate with the Secretary to 
                ensure, to the maximum extent practicable, the 
                usefulness and success of the assessment.
            (2) State coordination.--The Secretary shall consult with 
        State geological surveys and other relevant entities to ensure, 
        to the maximum extent practicable, the usefulness and success 
        of the assessment.
    (d) External Review and Publication.--On completion of the 
methodology under subsection (b), the Secretary shall--
            (1) publish the methodology and solicit comments from the 
        public and the heads of affected Federal and State agencies;
            (2) establish a panel of individuals with expertise in the 
        matters described in paragraphs (1) through (5) of subsection 
        (b) composed, as appropriate, of representatives of Federal 
        agencies, institutions of higher education, nongovernmental 
        organizations, State organizations, industry, and international 
        geosciences organizations to review the methodology and 
        comments received under paragraph (1); and
            (3) on completion of the review under paragraph (2), 
        publish in the Federal Register the revised final methodology.
    (e) Periodic Updates.--The methodology developed under this section 
shall be updated periodically (including not less frequently than once 
every 5 years) to incorporate new data as the data becomes available.
    (f) National Assessment.--
            (1) In general.--Not later than 2 years after the date of 
        publication of the methodology under subsection (d)(3), the 
        Secretary, in consultation with the Secretary of Energy and 
        State geological surveys, shall complete a national assessment 
        of the capacity for carbon dioxide storage in accordance with 
        the methodology.
            (2) Geological verification.--As part of the assessment, 
        the Secretary shall carry out a drilling program to supplement 
        the geological data relevant to determining storage capacity in 
        carbon dioxide in geological storage formations, including--
                    (A) well log data;
                    (B) core data; and
                    (C) fluid sample data.
            (3) Partnership with other drilling programs.--As part of 
        the drilling program under paragraph (2), the Secretary shall 
        enter into partnerships, as appropriate, with other entities to 
        collect and integrate data from other drilling programs 
        relevant to the storage of carbon dioxide in geologic 
        formations.
            (4) Incorporation into natcarb.--
                    (A) In general.--On completion of the assessment, 
                the Secretary shall incorporate the results of the 
                assessment using, to the maximum extent practicable--
                            (i) the NatCarb database; or
                            (ii) a new database developed by the 
                        Secretary, as the Secretary determines to be 
                        necessary.
                    (B) Ranking.--The database shall include the data 
                necessary to rank potential storage sites--
                            (i) for capacity and risk;
                            (ii) across the United States;
                            (iii) within each State;
                            (iv) by formation; and
                            (v) within each basin.
            (5) Report.--Not later than 180 days after the date on 
        which the assessment is completed, the Secretary shall submit 
        to the Committee on Energy and Natural Resources of the Senate 
        and the Committee on Science and Technology of the House of 
        Representatives a report describing the results of the 
        assessment.
            (6) Periodic updates.--The assessment shall be updated 
        periodically (including not less frequently than once every 5 
        years) as necessary to support public and private sector 
        decisionmaking, as determined by the Secretary.

SEC. 8003. STUDY OF THE FEASIBILITY RELATING TO CONSTRUCTION OF 
              PIPELINES AND GEOLOGICAL CARBON DIOXIDE SEQUESTRATION 
              ACTIVITIES.

    (a) In General.--The Secretary of Energy, in coordination with the 
Administrator, the Federal Energy Regulatory Commission, the Secretary 
of Transportation, and the Secretary of the Interior, shall conduct a 
study to assess the feasibility of the construction of--
            (1) pipelines to be used for the transportation of carbon 
        dioxide for the purpose of sequestration or enhanced oil 
        recovery; and
            (2) geological carbon dioxide sequestration facilities.
    (b) Scope.--The study shall consider--
            (1) any barrier or potential barrier in existence as of the 
        date of enactment of this Act, including any technical, siting, 
        financing, or regulatory barrier, relating to--
                    (A) the construction of pipelines to be used for 
                the transportation of carbon dioxide for the purpose of 
                sequestration or enhanced oil recovery; or
                    (B) the geological sequestration of carbon dioxide;
            (2) any market risk (including throughput risk) relating 
        to--
                    (A) the construction of pipelines to be used for 
                the transportation of carbon dioxide for the purpose of 
                sequestration or enhanced oil recovery; or
                    (B) the geological sequestration of carbon dioxide;
            (3) any regulatory, financing, or siting option that, as 
        determined by the Secretary of Energy, would--
                    (A) mitigate any market risk described in paragraph 
                (2); or
                    (B) help ensure the construction of pipelines 
                dedicated to the transportation of carbon dioxide for 
                the purpose of sequestration or enhanced oil recovery;
            (4) the means by which to ensure the safe handling and 
        transportation of carbon dioxide;
            (5) any preventive measure to ensure the integration of 
        pipelines to be used for the transportation of carbon dioxide 
        for the purpose of sequestration or enhanced oil recovery; and
            (6) any other appropriate use, as determined by the 
        Secretary of Energy, in coordination with the Administrator, 
        the Federal Energy Regulatory Commission, the Secretary of 
        Transportation, and the Secretary of the Interior.
    (c) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary of Energy shall submit to the Congress a report 
describing the results of the study.

SEC. 8004. LIABILITIES FOR CLOSED GEOLOGICAL STORAGE SITES.

    (a) Establishment of Task Force.--As soon as practicable after the 
date of enactment of this Act, the Administrator shall establish a task 
force, to be composed of an equal number of stakeholders, the public, 
subject matter experts, and members of the private sector, to conduct a 
study of the legal framework, environmental and safety considerations, 
and cost implications of potential Federal assumption of liability with 
respect to closed geological storage sites.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the task force established under subsection (a) shall 
submit to Congress a report describing the results of the study 
conducted under subsection (a), including recommendations of the task 
force, if any, with respect to the framework described in that 
subsection.

                        TITLE IX--MISCELLANEOUS

SEC. 9001. 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 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 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 National Academy of Sciences;
            (2) the Secretary of Energy; and
            (3) 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. 9002. CORPORATE ENVIRONMENTAL DISCLOSURE OF CLIMATE CHANGE RISKS.

    (a) Regulations.--Not later than 2 years after the date of 
enactment of this Act, the Securities and Exchange Commission (referred 
to in this section as the ``Commission'') shall promulgate regulations 
in accordance with section 13 of the Securities Exchange Act of 1934 
(15 U.S.C. 78m) directing each issuer of securities under that Act, to 
inform, based on the current expectations and projections and knowledge 
of facts of the issuer, securities investors of material risks relating 
to--
            (1) the financial exposure of the issuer because of the net 
        global warming pollution emissions of the issuer; and
            (2) the potential economic impacts of global warming on the 
        interests of the issuer.
    (b) Uniform Format for Disclosure.--In carrying out subsection (a), 
the Commission shall enter into an agreement with the Financial 
Accounting Standards Board, or another appropriate organization that 
establishes voluntary standards, to develop a uniform format for 
disclosing to securities investors information on the risks described 
in subsection (a).
    (c) Interim Interpretive Release.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall issue an 
        interpretive release clarifying that under items 101 and 303 of 
        Regulation S-K of the Commission under part 229 of title 17, 
        Code of Federal Regulations (as in effect on the date of 
        enactment of this Act)--
                    (A) the commitments of the United States to reduce 
                emissions of global warming pollution under the United 
                Nations Framework Convention on Climate Change, done at 
                New York on May 9, 1992, are considered to be a 
                material effect; and
                    (B) global warming constitutes a known trend.
            (2) Period of effectiveness.--The interpretive release 
        issued under paragraph (1) shall remain in effect until the 
        effective date of the final regulations promulgated under 
        subsection (a).

SEC. 9003. 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, with the exception of 
sections 3101, 3201, 3301, and 3901, shall be subject to the rulemaking 
procedures described in sections 551 through 557 of title 5, United 
States Code.
    (b) Enforcement.--Each provision of this Act (including provisions 
relating to mandatory duties of the Administrator) shall be fully 
enforceable pursuant to sections 113, 303, and 304 of the Clean Air Act 
(42 U.S.C. 7413, 7603, 7604).
    (c) Recordkeeping, Inspections, Monitoring, Entry, and Subpoenas.--
The Administrator 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.
    (d) Judicial Review.--A petition for judicial review of any 
regulation promulgated, or final action carried out, by the 
Administrator pursuant to this Act may be filed only--
            (1) in the United States Court of Appeals for the District 
        of Columbia; and
            (2) in accordance with section 307(b) of the Clean Air Act 
        (42 U.S.C. 7607(b)).

SEC. 9004. 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 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.

SEC. 9005. TRIBAL AUTHORITY.

    For purposes of this Act, the Administrator 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. 9006. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this Act.
                                 <all>