[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2423 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2423

 To facilitate price transparency in markets for the sale of emission 
                  allowances, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 6, 2007

Mrs. Feinstein introduced the following bill; which was read twice and 
       referred to the Committee on Environment and Public Works

_______________________________________________________________________

                                 A BILL


 
 To facilitate price transparency in markets for the sale of emission 
                  allowances, 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.

    This Act may be cited as the ``Emission Allowance Market 
Transparency Act of 2007''.

SEC. 2. EMISSION ALLOWANCE MARKET TRANSPARENCY.

    (a) Purpose.--The purpose of this section is to facilitate price 
transparency in markets for the sale of emission allowances (including 
markets for real-time, forward, futures, and options) to the maximum 
extent practicable, taking into consideration--
            (1) the public interest;
            (2) the integrity of those markets;
            (3) fair competition; and
            (4) protection of consumers.
    (b) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Emission allowance.--The term ``emission allowance'' 
        means any allowance, credit, or other permit issued pursuant to 
        any Federal law (including regulations) to any individual or 
        entity for use in offsetting the emissions of any pollutant 
        (including any greenhouse gas) by the individual or entity.
    (c) Duties of Administrator.--
            (1) Regulations.--The Administrator shall promulgate such 
        regulations as the Administrator determines to be necessary to 
        achieve the purpose of this section, including regulations that 
        provide for the dissemination, on a timely basis, of 
        information regarding the availability and prices of emission 
        allowances with respect to--
                    (A) the Administrator;
                    (B) State regulatory authorities;
                    (C) buyers and sellers of the emission allowances; 
                and
                    (D) the public.
            (2) Obtaining information.--
                    (A) In general.--Subject to subparagraph (B), the 
                Administrator may--
                            (i) obtain the information described in 
                        paragraph (1) directly from any emission 
                        allowance market participant; or
                            (ii) enter into an agreement under which 
                        another entity obtains and makes public that 
                        information.
                    (B) Limitation.--Any activity carried out by the 
                Administrator or another entity to obtain information 
                pursuant to subparagraph (A) shall be subject to 
                applicable rules designed to prevent the disclosure of 
                information the disclosure of which would be 
                detrimental to the operation of an effective emission 
                allowance market, as determined by the Administrator.
            (3) Use of existing price publishers and service 
        providers.--In carrying out this subsection, the Administrator 
        shall--
                    (A) take into consideration the degree of relevant 
                price transparency provided by price publishers and 
                providers of trade processing services in operation on 
                the date of enactment of this Act; and
                    (B) use information and services provided by those 
                publishers and providers to the maximum extent 
                practicable.
    (d) Actions by Individuals and Entities.--
            (1) Prohibitions.--It shall be unlawful for any individual 
        or entity--
                    (A) to knowingly provide to the Administrator (or 
                another entity acting pursuant to an agreement 
                described in subsection (c)(2)(A)(ii)) any false 
                information relating to the price or quantity of 
                emission allowances sold, purchased, transferred, 
                banked, or borrowed by the individual or entity, with 
                the intent to fraudulently affect the data being 
                compiled by the Administrator or other entity;
                    (B) directly or indirectly, to use in connection 
                with the purchase or sale of an emission allowance any 
                manipulative or deceptive device or contrivance (within 
                the meaning of section 10(b) of the Securities Exchange 
                Act of 1934 (15 U.S.C. 78j(b))), in contravention of 
                such rules and regulations as the Administrator may 
                prescribe to protect the public interest or consumers; 
                or
                    (C) to cheat or defraud, or attempt to cheat or 
                defraud, another market participant, client, or 
                customer.
            (2) Monitoring.--The Administrator shall monitor trading to 
        prevent false reporting, manipulation, and fraud under this 
        section.
            (3) Effect of subsection.--Nothing in this subsection 
        creates any private right of action.
    (e) Excessive Speculation.--
            (1) Finding.--Congress finds that excessive speculation 
        relating to emission allowances--
                    (A) can cause sudden or unreasonable fluctuations 
                or unwarranted changes in the price of emission 
                allowances; and
                    (B) imposes an unnecessary burden on--
                            (i) the development of a well-functioning 
                        emission allowance market;
                            (ii) the planning decisions of businesses 
                        and industry; and
                            (iii) consumers.
            (2) Prevention of burdens.--
                    (A) In general.--To prevent, decrease, or eliminate 
                the burdens associated with excessive speculation 
                relating to emission allowances, the Administrator, in 
                accordance with subparagraph (B) and after providing 
                notice and an opportunity for public comment, shall 
                adopt position limitations or position accountability 
                for speculators as the Administrator determines to be 
                necessary on--
                            (i) the quantity of trading transactions 
                        allowed to be conducted, and the positions 
                        eligible to be held, by any individual or 
                        entity in any emission allowance market; and
                            (ii) any emission allowance auction 
                        conducted pursuant to Federal law (including 
                        regulations).
                    (B) Consultation.--In carrying out subparagraph 
                (A), the Administrator shall consult with--
                            (i) the Commodity Futures Trading 
                        Commission;
                            (ii) the Federal Trade Commission; and
                            (iii) the Federal Energy Regulatory 
                        Commission.
                    (C) Nonapplicability to bona fide hedging 
                transactions or positions.--
                            (i) In general.--No regulation promulgated 
                        pursuant to this paragraph shall apply to a 
                        transaction or position described in 
                        subparagraph (A)(i) that is a bona fide hedging 
                        transaction or position, as determined by the 
                        Administrator.
                            (ii) Regulations for definitions.--The 
                        Administrator shall promulgate such regulations 
                        as the Administrator determines to be necessary 
                        to define the term ``bona fide hedging 
                        transaction or position'' for purposes of 
                        clause (i), including regulations that permit 
                        individuals or entities to hedge any legitimate 
                        anticipated business need for any subsequent 
                        period during which an appropriate futures 
                        contract is open and available on an exchange 
                        or other emission allowance market or auction.
    (f) Penalties.--An individual or entity that, as determined by the 
Administrator, violates an applicable provision of this section or a 
regulation promulgated pursuant to this section shall be subject to a 
fine of $1,000,000, or imprisonment for not more than 10 years, or 
both, for each violation.
    (g) Jurisdiction of Commodity Futures Trading Commission.--Nothing 
in this section abrogates the jurisdiction of the Commodity Futures 
Trading Commission with respect to any contract, agreement, or 
transaction for future delivery of an emission allowance (including a 
carbon dioxide credit).
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