    [Congressional Bills 111th Congress]
    [From the U.S. Government Publishing Office]
    [H.R. 2454 Engrossed in House (EH)]

    111th CONGRESS
      1st Session
                                    H. R. 2454

    _______________________________________________________________________

                                     AN ACT

    To create clean energy jobs, achieve energy independence, reduce global
          warming pollution and transition to a clean energy economy.

        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 ``American Clean
    Energy and Security Act of 2009''.
        (b) Table of Contents.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title; table of contents.
    Sec. 2. Definitions.
    Sec. 3. International participation.
                             TITLE I--CLEAN ENERGY

       Subtitle A--Combined Efficiency and Renewable Electricity Standard

    Sec. 101. Combined efficiency and renewable electricity standard.
            ``Sec. 610. Combined efficiency and renewable electricity
                                standard.
    Sec. 102. Clarifying State authority to adopt renewable energy
                                incentives.
    Sec. 103. Federal renewable energy purchases.
                  Subtitle B--Carbon Capture and Sequestration

    Sec. 111. National strategy.
    Sec. 112. Regulations for geologic sequestration sites.
            ``Sec. 813. Geologic sequestration sites.
    Sec. 113. Studies and reports.
    Sec. 114. Carbon capture and sequestration demonstration and early
                                deployment program.
    Sec. 115. Commercial deployment of carbon capture and sequestration
                                technologies.
            ``Sec. 786. Commercial deployment of carbon capture and
                                sequestration technologies.
    Sec. 116. Performance standards for coal-fueled power plants.
            ``Sec. 812. Performance standards for new coal-fired power
                                plants.
                        Subtitle C--Clean Transportation

    Sec. 121. Electric vehicle infrastructure.
    Sec. 122. Large-scale vehicle electrification program.
    Sec. 123. Plug-in electric drive vehicle manufacturing.
    Sec. 124. Investment in clean vehicles.
    Sec. 125. Advanced technology vehicle manufacturing incentive loans.
    Sec. 126. Definition of renewable biomass.
    Sec. 127. Open fuel standard.
            ``Sec. 32920. Open fuel standard for transportation.
    Sec. 128. Diesel emissions reduction.
    Sec. 129. Loan guarantees for projects to construct renewable fuel
                                pipelines.
    Sec. 130. Fleet vehicles.
    Sec. 130A. Report on natural gas vehicle emissions reductions.
         Subtitle D--State Energy and Environment Development Accounts

    Sec. 131. Establishment of SEED Accounts.
    Sec. 132. Support of State renewable energy and energy efficiency
                                programs.
    Sec. 133. Support of Indian renewable energy and energy efficiency
                                programs.
                       Subtitle E--Smart Grid Advancement

    Sec. 141. Definitions.
    Sec. 142.  Assessment of Smart Grid cost effectiveness in products.
    Sec. 143. Inclusions of Smart Grid capability on appliance ENERGY GUIDE
                                labels.
    Sec. 144. Smart Grid peak demand reduction goals.
    Sec. 145.  Reauthorization of energy efficiency public information
                                program to include Smart Grid information.
    Sec. 146. Inclusion of Smart Grid features in appliance rebate program.
                       Subtitle F--Transmission Planning

    Sec. 151. Transmission planning and siting.
            ``Sec. 216A Transmission planning.
            ``Sec. 216B. Siting and construction in the Western
                                Interconnection.
    Sec. 152. Net metering for Federal agencies.
    Sec. 153. Support for qualified advanced electric transmission
                                manufacturing plants, qualified high
                                efficiency transmission property, and
                                qualified advanced electric transmission
                                property.
                Subtitle G--Technical Corrections to Energy Laws

    Sec. 161. Technical corrections to Energy Independence and Security Act
                                of 2007.
    Sec. 162. Technical corrections to Energy Policy Act of 2005.
             Subtitle H--Energy and Efficiency Centers and Research

    Sec. 171. Energy Innovation Hubs.
    Sec. 172. Advanced energy research.
    Sec. 173. Building Assessment Centers.
    Sec. 174. Centers for Energy and Environmental Knowledge and Outreach.
    Sec. 175. High efficiency gas turbine research, development, and
                                demonstration.
                 Subtitle I--Nuclear and Advanced Technologies

    Sec. 181. Revisions to loan guarantee program authority.
    Sec. 182. Purpose.
    Sec. 183. Definitions.
    Sec. 184. Clean energy investment fund.
    Sec. 185. Energy technology deployment goals.
    Sec. 186. Clean energy deployment administration.
    Sec. 187. Direct support.
    Sec. 188. Indirect support.
    Sec. 189. Federal credit authority.
    Sec. 190. General provisions.
    Sec. 191. Conforming amendments.
                           Subtitle J--Miscellaneous

    Sec. 195. Increased hydroelectric generation at existing Federal
                                facilities.
    Sec. 196. Clean technology business competition grant program.
    Sec. 197. National Bioenergy Partnership.
    Sec. 198. Office of Consumer Advocacy.
            ``Sec. 319. Office of Consumer Advocacy.
    Sec. 199. Development corporation for renewable power borrowing
                                authority.
    Sec. 199A. Study.
                          TITLE II--ENERGY EFFICIENCY

                Subtitle A--Building Energy Efficiency Programs

    Sec. 201. Greater energy efficiency in building codes.
            ``Sec. 304. Greater energy efficiency in building codes.
    Sec. 202. Building retrofit program.
    Sec. 203. Energy efficient manufactured homes.
    Sec. 204. Building energy performance labeling program.
    Sec. 205. Tree planting programs.
    Sec. 206. Energy efficiency for data center buildings.
    Sec. 207. Community building code administration grants.
    Sec. 208. Solar energy systems building permit requirements for receipt
                                of community development block grant funds.
    Sec. 209. Prohibition of restrictions on residential installation of
                                solar energy system.
         Subtitle B--Lighting and Appliance Energy Efficiency Programs

    Sec. 211. Lighting efficiency standards.
    Sec. 212. Other appliance efficiency standards.
    Sec. 213. Appliance efficiency determinations and procedures.
            ``Sec. 334. Jurisdiction and venue.
    Sec. 214. Best-in-Class Appliances Deployment Program.
    Sec. 215. WaterSense.
    Sec. 216. Federal procurement of water efficient products.
    Sec. 217. Early adopter water efficient product incentive programs.
    Sec. 218. Certified stoves program.
    Sec. 219. Energy Star standards.
                     Subtitle C--Transportation Efficiency

    Sec. 221. Emissions standards.
                            ``Part B--Mobile Sources

            ``Sec. 821. Greenhouse gas emission standards for mobile
                                sources.
    Sec. 222. Greenhouse gas emissions reductions through transportation
                                efficiency.
                       ``Part D--Transportation Emissions

            ``Sec. 841. Greenhouse gas emissions reductions through
                                transportation efficiency.
    Sec. 223. SmartWay transportation efficiency program.
            ``Sec. 822. SmartWay transportation efficiency program.
    Sec. 224. State vehicle fleets.
               Subtitle D--Industrial Energy Efficiency Programs

    Sec. 241. Industrial plant energy efficiency standards.
    Sec. 242. Electric and thermal waste energy recovery award program.
    Sec. 243. Clarifying election of waste heat recovery financial
                                incentives.
    Sec. 244. Motor market assessment and commercial awareness program.
    Sec. 245. Motor efficiency rebate program.
            ``Sec. 347. Motor efficiency rebate program.
    Sec. 246. Clean energy manufacturing revolving loan fund program.
            ``Sec. 27. Clean energy manufacturing revolving loan fund
                                program.
    Sec. 247. Clean energy and efficiency manufacturing partnerships.
    Sec. 248. Technical amendments.
       Subtitle E--Improvements in Energy Savings Performance Contracting

    Sec. 251. Energy savings performance contracts.
                        Subtitle F--Public Institutions

    Sec. 261. Public institutions.
    Sec. 262. Community energy efficiency flexibility.
    Sec. 263. Small community joint participation.
    Sec. 264. Low income community energy efficiency program.
    Sec. 265. Consumer behavior research.
                           Subtitle G--Miscellaneous

    Sec. 271. Energy efficient information and communications technologies.
            ``Sec. 543. Energy efficient information and communications
                                technologies.
    Sec. 272. National energy efficiency goals.
    Sec. 273. Affiliated island energy independence team.
    Sec. 274. Product carbon disclosure program.
    Sec. 275. Industrial energy efficiency education and training
                                initiative.
    Sec. 276. Sense of Congress.
         Subtitle H--Green Resources for Energy Efficient Neighborhoods

    Sec. 281. Short title.
    Sec. 282. Definitions.
    Sec. 283. Implementation of energy efficiency participation incentives
                                for HUD programs.
    Sec. 284. Basic HUD energy efficiency standards and standards for
                                additional credit.
    Sec. 285. Energy efficiency and conservation demonstration program for
                                multifamily housing projects assisted with
                                project-based rental assistance.
    Sec. 286. Additional credit for Fannie Mae and Freddie Mac housing
                                goals for energy-efficient and location-
                                efficient mortgages.
    Sec. 287. Duty to serve underserved markets for energy-efficient and
                                location-efficient mortgages.
    Sec. 288. Consideration of energy efficiency under FHA mortgage
                                insurance programs and Native American and
                                Native Hawaiian loan guarantee programs.
            ``Sec. 543. Consideration of energy efficiency.
    Sec. 289. Energy-efficient mortgages and location-efficient mortgages
                                education and outreach campaign.
    Sec. 290. Collection of information on energy-efficient and location-
                                efficient mortgages through Home Mortgage
                                Disclosure Act.
    Sec. 291. Ensuring availability of homeowners insurance for homes not
                                connected to electricity grid.
    Sec. 292. Mortgage incentives for energy-efficient multifamily housing.
    Sec. 293. Energy-efficient certifications for manufactured housing with
                                mortgages.
    Sec. 294. Assisted housing energy loan pilot program.
    Sec. 295. Making it green.
    Sec. 296. Residential energy efficiency block grant program.
            ``Sec. 123. Residential energy efficiency block grant program.
    Sec. 297. Including sustainable development and transportation
                                strategies in comprehensive housing
                                affordability strategies.
    Sec. 298. Grant program to increase sustainable low-income community
                                development capacity.
    Sec. 299. HOPE VI green developments requirement.
    Sec. 299A. Consideration of energy efficiency improvements in
                                appraisals.
    Sec. 299B. Housing Assistance Council.
    Sec. 299C. Rural housing and economic development assistance.
    Sec. 299D. Loans to States and Indian tribes to carry out renewable
                                energy sources activities.
    Sec. 299E. Green banking centers.
    Sec. 299F. GAO reports on availability of affordable mortgages.
    Sec. 299G. Public housing energy cost report.
    Sec. 299H. Secondary market for residential renewable energy lease
                                instruments.
    Sec. 299I. Green guarantees.
                  TITLE III--REDUCING GLOBAL WARMING POLLUTION

    Sec. 301. Short title.
                 Subtitle A--Reducing Global Warming Pollution

    Sec. 311. Reducing global warming pollution.
            ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

         ``Part A--Global Warming Pollution Reduction Goals and Targets

            ``Sec. 701. Findings and purpose.
            ``Sec. 702. Economy-wide reduction goals.
            ``Sec. 703. Reduction targets for specified sources.
            ``Sec. 704. Supplemental pollution reductions.
            ``Sec. 705. Review and program recommendations.
            ``Sec. 706. National Academy review.
            ``Sec. 707. Presidential response and recommendations.
           ``Part B--Designation and Registration of Greenhouse Gases

            ``Sec. 711. Designation of greenhouse gases.
            ``Sec. 712. Carbon dioxide equivalent value of greenhouse
                                gases.
            ``Sec. 713. Greenhouse gas registry.
                            ``Part C--Program Rules

            ``Sec. 721. Emission allowances.
            ``Sec. 722. Prohibition of excess emissions.
            ``Sec. 723. Penalty for noncompliance.
            ``Sec. 724. Trading.
            ``Sec. 725. Banking and borrowing.
            ``Sec. 726. Strategic reserve.
            ``Sec. 727. Permits.
            ``Sec. 728. International emission allowances.
                               ``Part D--Offsets

            ``Sec. 731. Offsets Integrity Advisory Board.
            ``Sec. 732. Establishment of offsets program.
            ``Sec. 733. Eligible project types.
            ``Sec. 734. Requirements for offset projects.
            ``Sec. 735. Approval of offset projects.
            ``Sec. 736. Verification of offset projects.
            ``Sec. 737. Issuance of offset credits.
            ``Sec. 738. Audits.
            ``Sec. 739. Program review and revision.
            ``Sec. 740. Early offset supply.
            ``Sec. 741. Environmental considerations.
            ``Sec. 742. Trading.
            ``Sec. 743. International offset credits.
     ``Part E--Supplemental Emissions Reductions From Reduced Deforestation

            ``Sec. 751. Definitions.
            ``Sec. 752. Findings.
            ``Sec. 753. Supplemental emissions reductions through reduced
                                deforestation.
            ``Sec. 754. Requirements for international deforestation
                                reduction program.
            ``Sec. 755. Reports and reviews.
            ``Sec. 756. Legal effect of part.
    Sec. 312. Definitions.
            ``Sec. 700. Definitions.
                     Subtitle B--Disposition of Allowances

    Sec. 321. Disposition of allowances for global warming pollution
                                reduction program.
                      ``Part H--Disposition of Allowances

            ``Sec. 781. Allocation of allowances for supplemental
                                reductions.
            ``Sec. 782. Allocation of emission allowances.
            ``Sec. 783. Electricity consumers.
            ``Sec. 784. Natural gas consumers.
            ``Sec. 785. Home heating oil, propane, and kerosene consumers.
            ``Sec. 787. Allocations to refineries.
            ``Sec. 788. Supplemental agriculture and renewable energy
                                incentives programs.
            ``Sec. 789. Climate change consumer refunds.
            ``Sec. 790. Exchange for State-issued allowances.
            ``Sec. 791. Auction procedures.
            ``Sec. 792. Auctioning allowances for other entities.
            ``Sec. 793. Establishment of funds.
            ``Sec. 794. Oversight of allocations.
            ``Sec. 795. Exchange for early action offset credits.
                Subtitle C--Additional Greenhouse Gas Standards

    Sec. 331. Greenhouse gas standards.
               ``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

            ``Sec. 801. Definitions.
                     ``Part A--Stationary Source Standards

            ``Sec. 811. Standards of performance.
                    ``Part C--Exemptions From Other Programs

            ``Sec. 831. Criteria pollutants.
            ``Sec. 832. International air pollution.
            ``Sec. 833. Hazardous air pollutants.
            ``Sec. 834. New source review.
            ``Sec. 835. Title V permits.
    Sec. 332. HFC Regulation.
            ``Sec. 619. Hydrofluorocarbons (HFCs).
    Sec. 333. Black carbon.
                             ``Part E--Black Carbon

            ``Sec. 851. Black carbon.
    Sec. 334. States.
    Sec. 335. State programs.
                            ``Part F--Miscellaneous

            ``Sec. 861. State programs.
            ``Sec. 862. Grants for support of air pollution control
                                programs.
    Sec. 336. Enforcement.
    Sec. 337. Conforming amendments.
    Sec. 338. Davis-Bacon compliance.
    Sec. 339. National strategy for domestic biological carbon
                                sequestration.
    Sec. 340. Reducing acid rain and mercury pollution.
                      Subtitle D--Carbon Market Assurance

    Sec. 341. Carbon market assurance.
                       ``Part IV--Carbon Market Assurance

            ``Sec. 401. Oversight and assurance of carbon markets.
            ``Sec. 402. Applicability of Part III provisions.
            ``Sec. 1041. Fraud and false statements in connection with
                                regulated allowances.
    Sec. 342. Carbon derivative markets.
                    Subtitle E--Additional Market Assurance

    Sec. 351. Regulation of certain transactions in derivatives involving
                                energy commodities.
    Sec. 352. No effect on authority of the Federal Energy Regulatory
                                Commission.
    Sec. 353. Inspector General of the Commodity Futures Trading
                                Commission.
    Sec. 354. Settlement and clearing through registered derivatives
                                clearing organizations.
    Sec. 355. Limitation on eligibility to purchase a credit default swap.
    Sec. 356. Transaction fees.
    Sec. 357. No effect on antitrust law or authority of the Federal Trade
                                Commission.
    Sec. 358. Effect of derivatives regulatory reform legislation.
    Sec. 359. Cease-and-desist authority.
    Sec. 360. Presidential review of regulations.
               TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

          Subtitle A--Ensuring Real Reductions in Industrial Emissions

    Sec. 401. Ensuring real reductions in industrial emissions.
           ``Part F--Ensuring Real Reductions in Industrial Emissions

            ``Sec. 761. Purposes.
            ``Sec. 762. Definitions.
                 ``subpart 1--emission allowance rebate program

            ``Sec. 763. Eligible industrial sectors.
            ``Sec. 764. Distribution of emission allowance rebates.
    ``subpart 2--promoting international reductions in industrial emissions

            ``Sec. 765. International negotiations.
            ``Sec. 766. United States negotiating objectives with respect
                                to multilateral environmental negotiations.
            ``Sec. 767. Presidential reports and determinations.
            ``Sec. 768. International reserve allowance program.
            ``Sec. 769. Iron and steel sector.
                  Subtitle B--Green Jobs and Worker Transition

                               Part 1--Green Jobs

    Sec. 421. Clean energy curriculum development grants.
    Sec. 422. Increased funding for energy worker training program.
    Sec. 423. Development of Information and Resources clearinghouse for
                                vocational education and job training in
                                renewable energy sectors.
    Sec. 424. Monitoring program effectiveness.
    Sec. 424A. Green construction careers demonstration project.
              Part 2--Climate Change Worker Adjustment Assistance

    Sec. 425. Petitions, eligibility requirements, and determinations.
    Sec. 426. Program benefits.
    Sec. 427. General provisions.
                        Subtitle C--Consumer Assistance

    Sec. 431. Energy refund program.
                      ``TITLE XXII--ENERGY REFUND PROGRAM

            ``Sec. 2201. Energy refund program.
    Sec. 432. Modification of earned income credit amount for individuals
                                with no qualifying children.
    Sec. 433. Protection of Social Security and Medicare trust funds.
                     Subtitle D--Exporting Clean Technology

    Sec. 441. Findings and purposes.
    Sec. 442. Definitions.
    Sec. 443. Governance.
    Sec. 444. Determination of eligible countries.
    Sec. 445. Qualifying activities.
    Sec. 446. Assistance.
                     Subtitle E--Adapting to Climate Change

                          Part 1--Domestic Adaptation

             subpart a--national climate change adaptation program

    Sec. 451. Global change research and data management.
    Sec. 452. National Climate Service.
    Sec. 453. State programs to build resilience to climate change impacts.
                  subpart b--public health and climate change

    Sec. 461. Sense of Congress on public health and climate change.
    Sec. 462. Relationship to other laws.
    Sec. 463. National strategic action plan.
    Sec. 464. Advisory board.
    Sec. 465. Reports.
    Sec. 466. Definitions.
    Sec. 467. Climate Change Health Protection and Promotion Fund.
                     subpart c--natural resource adaptation

    Sec. 471. Purposes.
    Sec. 472. Natural resources climate change adaptation policy.
    Sec. 473. Definitions.
    Sec. 474. Council on Environmental Quality.
    Sec. 475. Natural Resources Climate Change Adaptation Panel.
    Sec. 476. Natural Resources Climate Change Adaptation Strategy.
    Sec. 477. Natural resources adaptation science and information.
    Sec. 478. Federal natural resource agency adaptation plans.
    Sec. 479. State natural resources adaptation plans.
    Sec. 480. Natural Resources Climate Change Adaptation Fund.
    Sec. 481. National Wildlife Habitat and Corridors Information Program.
    Sec. 482. Additional provisions regarding Indian tribes.
            Part 2--International Climate Change Adaptation Program

    Sec. 491. Findings and purposes.
    Sec. 492. Definitions.
    Sec. 493. International Climate Change Adaptation Program.
    Sec. 494. Distribution of allowances.
    Sec. 495. Bilateral assistance.
               TITLE V--AGRICULTURAL AND FORESTRY RELATED OFFSETS

       Subtitle A--Offset Credit Program From Domestic Agricultural and
                                Forestry Sources

    Sec. 501. Definitions.
    Sec. 502. Establishment of offset credit program from domestic
                                agricultural and forestry sources.
    Sec. 503. List of eligible domestic agricultural and forestry offset
                                practice types.
    Sec. 504. Requirements for domestic agricultural and forestry
                                practices.
    Sec. 505. Project plan submission and approval.
    Sec. 506. Verification of offset practices.
    Sec. 507. Certification of offset credits.
    Sec. 508. Ownership and transfer of offset credits.
    Sec. 509. Program review and revision.
    Sec. 510. Environmental considerations.
    Sec. 511. Audits.
     Subtitle B--USDA Greenhouse Gas Emission Reduction and Sequestration
                               Advisory Committee

    Sec. 531. Establishment of USDA Greenhouse Gas Emission Reduction and
                                Sequestration Advisory Committee.
                           Subtitle C--Miscellaneous

    Sec. 551. International indirect land use changes.
    Sec. 552. Biomass-based diesel.
    Sec. 553. Modification of definition of renewable biomass.

    SEC. 2. DEFINITIONS.

        For purposes of this Act:
                (1) Administrator.--The term ``Administrator'' means the
            Administrator of the Environmental Protection Agency.
                (2) State.--The term ``State'' has the meaning given that
            term in section 302 of the Clean Air Act.

    SEC. 3. INTERNATIONAL PARTICIPATION.

        The Administrator, in consultation with the Department of State and
    the United States Trade Representative, shall annually prepare and
    certify a report to the Congress regarding whether China and India have
    adopted greenhouse gas emissions standards at least as strict as those
    standards required under this Act. If the Administrator determines that
    China and India have not adopted greenhouse gas emissions standards at
    least as stringent as those set forth in this Act, the Administrator
    shall notify each Member of Congress of his determination, and shall
    release his determination to the media.

                             TITLE I--CLEAN ENERGY

       Subtitle A--Combined Efficiency and Renewable Electricity Standard

    SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.

        (a) In General.--Title VI of the Public Utility Regulatory Policies
    Act of 1978 (16 U.S.C. 2601 and following) is amended by adding at the
    end the following:

    ``SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELECTRICITY STANDARD.

        ``(a) Definitions.--For purposes of this section:
                ``(1) CHP savings.--The term `CHP savings' means--
                        ``(A) CHP system savings from a combined heat and
                    power system that commences operation after the date of
                    enactment of this section; and
                        ``(B) the increase in CHP system savings from, at
                    any time after the date of the enactment of this
                    section, upgrading, replacing, expanding, or increasing
                    the utilization of a combined heat and power system
                    that commenced operation on or before the date of
                    enactment of this section.
                ``(2) CHP system savings.--The term `CHP system savings'
            means the increment of electric output of a combined heat and
            power system that is attributable to the higher efficiency of
            the combined system (as compared to the efficiency of separate
            production of the electric and thermal outputs).
                ``(3) Combined heat and power system.--The term `combined
            heat and power system' means a system that uses the same energy
            source both for the generation of electrical or mechanical
            power and the production of steam or another form of useful
            thermal energy, provided that--
                        ``(A) the system meets such requirements relating
                    to efficiency and other operating characteristics as
                    the Commission may promulgate by regulation; and
                        ``(B) the net sales of electricity by the facility
                    to customers not consuming the thermal output from that
                    facility will not exceed 50 percent of total annual
                    electric generation by the facility.
                ``(4) Customer facility savings.--The term `customer
            facility savings' means a reduction in end-use electricity
            consumption (including recycled energy savings) at a facility
            of an end-use consumer of electricity served by a retail
            electric supplier, as compared to--
                        ``(A) in the case of a new facility, consumption at
                    a reference facility of average efficiency;
                        ``(B) in the case of an existing facility,
                    consumption at such facility during a base period,
                    except as provided in subparagraphs (C) and (D);
                        ``(C) in the case of new equipment that replaces
                    existing equipment with remaining useful life, the
                    projected consumption of the existing equipment for the
                    remaining useful life of such equipment, and
                    thereafter, consumption of new equipment of average
                    efficiency of the same equipment type; and
                        ``(D) in the case of new equipment that replaces
                    existing equipment at the end of the useful life of the
                    existing equipment, consumption by new equipment of
                    average efficiency of the same equipment type.
                ``(5) Distributed renewable generation facility.--The term
            `distributed renewable generation facility' means a facility
            that--
                        ``(A) generates renewable electricity;
                        ``(B) primarily serves 1 or more electricity
                    consumers at or near the facility site; and
                        ``(C) is no greater than--
                                ``(i) 2 megawatts in capacity; or
                                ``(ii) 4 megawatts in capacity, in the case
                            of a facility that is placed in service after
                            the date of enactment of this section and
                            generates electricity from a renewable energy
                            resource other than by means of combustion.
                ``(6) Electricity savings.--The term `electricity savings'
            means reductions in electricity consumption, relative to
            business-as-usual projections, achieved through measures
            implemented after the date of enactment of this section,
            limited to--
                        ``(A) customer facility savings of electricity,
                    adjusted to reflect any associated increase in fuel
                    consumption at the facility;
                        ``(B) reductions in distribution system losses of
                    electricity achieved by a retail electricity
                    distributor, as compared to losses attributable to new
                    or replacement distribution system equipment of average
                    efficiency;
                        ``(C) CHP savings; and
                        ``(D) fuel cell savings.
                ``(7) Central procurement state.--The term `central
            procurement State' means a State that, as of January 1, 2009,
            had adopted and implemented a legally enforceable mandate that,
            in lieu of requiring utilities to submit credits or
            certificates issued based on generation of electricity from (or
            to purchase or generate electricity from) resources defined by
            the State as renewable, requires retail electric suppliers to
            collect payments from electricity ratepayers within the State
            that are used for central procurement, by a State agency or a
            public benefit corporation established pursuant to State law,
            of credits or certificates issued based on generation of
            electricity from resources defined by the State as renewable.
                ``(8) Federal renewable electricity credit.--The term
            `Federal renewable electricity credit' means a credit,
            representing one megawatt hour of renewable electricity, issued
            pursuant to subsection (e).
                ``(9) Fuel cell.--The term `fuel cell' means a device that
            directly converts the chemical energy of a fuel and an oxidant
            into electricity by electrochemical processes occurring at
            separate electrodes in the device.
                ``(10) Fuel cell savings.--The term `fuel cell savings'
            means the electricity saved by a fuel cell that is installed
            after the date of enactment of this section, or by upgrading a
            fuel cell that commenced operation on or before the date of
            enactment of this section, as a result of the greater
            efficiency with which the fuel cell transforms fuel into
            electricity as compared with sources of electricity delivered
            through the grid, provided that--
                        ``(A) the fuel cell meets such requirements
                    relating to efficiency and other operating
                    characteristics as the Commission may promulgate by
                    regulation; and
                        ``(B) the net sales of electricity from the fuel
                    cell to customers not consuming the thermal output from
                    the fuel cell, if any, do not exceed 50 percent of the
                    total annual electricity generation by the fuel cell.
                ``(11) Other qualifying energy resource.--The term `other
            qualifying energy resource' means any of the following:
                        ``(A) Landfill gas.
                        ``(B) Wastewater treatment gas.
                        ``(C) Coal mine methane used to generate
                    electricity at or near the mine mouth.
                        ``(D) Qualified waste-to-energy.
                ``(12) Qualified hydropower.--The term `qualified
            hydropower' means--
                        ``(A) energy produced from increased efficiency
                    achieved, or additions of capacity made, on or after
                    January 1, 1988, at a hydroelectric facility that was
                    placed in service before that date and does not include
                    additional energy generated as a result of operational
                    changes not directly associated with efficiency
                    improvements or capacity additions; or
                        ``(B) energy produced from generating capacity
                    added to a dam on or after January 1, 1988, provided
                    that the Commission certifies that--
                                ``(i) the dam was placed in service before
                            the date of the enactment of this section and
                            was operated for flood control, navigation, or
                            water supply purposes and was not producing
                            hydroelectric power prior to the addition of
                            such capacity;
                                ``(ii) the hydroelectric project installed
                            on the dam is licensed (or is exempt from
                            licensing) by the Commission and is in
                            compliance with the terms and conditions of the
                            license or exemption, and with other applicable
                            legal requirements for the protection of
                            environmental quality, including applicable
                            fish passage requirements; and
                                ``(iii) the hydroelectric project installed
                            on the dam is operated so that the water
                            surface elevation at any given location and
                            time that would have occurred in the absence of
                            the hydroelectric project is maintained,
                            subject to any license or exemption
                            requirements that require changes in water
                            surface elevation for the purpose of improving
                            the environmental quality of the affected
                            waterway.
                ``(13) Qualified waste-to-energy.--The term `qualified
            waste-to-energy' means energy from the combustion of municipal
            solid waste or construction, demolition, or disaster debris, or
            from the gasification or pyrolization of such waste or debris
            and the combustion of the resulting gas at the same facility,
            provided that--
                        ``(A) such term shall include only the energy
                    derived from the non-fossil biogenic portion of such
                    waste or debris;
                        ``(B) the Commission determines, with the
                    concurrence of the Administrator of the Environmental
                    Protection Agency, that the total lifecycle greenhouse
                    gas emissions attributable to the generation of
                    electricity from such waste or debris are lower than
                    those attributable to the likely alternative method of
                    disposing of such waste or debris; and
                        ``(C) the owner or operator of the facility
                    generating electricity from such energy provides to the
                    Commission, on an annual basis--
                                ``(i) a certification that the facility is
                            in compliance with all applicable State,
                            tribal, and Federal environmental permits;
                                ``(ii) in the case of a facility that
                            commenced operation before the date of
                            enactment of this section, a certification that
                            the facility meets emissions standards
                            promulgated under section 112 or 129 of the
                            Clean Air Act (42 U.S.C. 7412 or 7429) that
                            apply as of the date of enactment of this
                            section to new facilities within the relevant
                            source category; and
                                ``(iii) in the case of the combustion,
                            pyrolization, or gasification of municipal
                            solid waste, a certification that each local
                            government unit from which such waste
                            originates operates, participates in the
                            operation of, contracts for, or otherwise
                            provides for, recycling services for its
                            residents.
                ``(14) Recycled energy savings.--The term `recycled energy
            savings' means a reduction in electricity consumption that
            results from a modification of an industrial or commercial
            system that commenced operation before the date of enactment of
            this section, in order to recapture electrical, mechanical, or
            thermal energy that would otherwise be wasted.
                ``(15) Renewable biomass.--The term `renewable biomass'
            means any of the following:
                        ``(A) Materials, pre-commercial thinnings, or
                    removed invasive species from National Forest System
                    land and public lands (as defined in section 103 of the
                    Federal Land Policy and Management Act of 1976 (43
                    U.S.C. 1702)), including those that are byproducts of
                    preventive treatments (such as trees, wood, brush,
                    thinnings, chips, and slash), that are removed as part
                    of a federally recognized timber sale, or that are
                    removed to reduce hazardous fuels, to reduce or contain
                    disease or insect infestation, or to restore ecosystem
                    health, and that are--
                                ``(i) not from components of the National
                            Wilderness Preservation System, Wilderness
                            Study Areas, Inventoried Roadless Areas, old
                            growth stands, late-successional stands (except
                            for dead, severely damaged, or badly infested
                            trees), components of the National Landscape
                            Conservation System, National Monuments,
                            National Conservation Areas, Designated
                            Primitive Areas, or Wild and Scenic Rivers
                            corridors;
                                ``(ii) harvested in environmentally
                            sustainable quantities, as determined by the
                            appropriate Federal land manager; and
                                ``(iii) harvested in accordance with
                            Federal and State law, and applicable land
                            management plans.
                        ``(B) Any organic matter that is available on a
                    renewable or recurring basis from non-Federal land or
                    land belonging to an Indian or Indian tribe that is
                    held in trust by the United States or subject to a
                    restriction against alienation imposed by the United
                    States, including--
                                ``(i) renewable plant material, including--
                                        ``(I) feed grains;
                                        ``(II) other agricultural
                                    commodities;
                                        ``(III) other plants and trees; and
                                        ``(IV) algae; and
                                ``(ii) waste material, including--
                                        ``(I) crop residue;
                                        ``(II) other vegetative waste
                                    material (including wood waste and wood
                                    residues);
                                        ``(III) animal waste and byproducts
                                    (including fats, oils, greases, and
                                    manure);
                                        ``(IV) construction waste; and
                                        ``(V) food waste and yard waste.
                        ``(C) Residues and byproducts from wood, pulp, or
                    paper products facilities.
                ``(16) Renewable electricity.--The term `renewable
            electricity' means electricity generated (including by means of
            a fuel cell) from a renewable energy resource or other
            qualifying energy resources.
                ``(17) Renewable energy resource.--The term `renewable
            energy resource' means each of the following:
                        ``(A) Wind energy.
                        ``(B) Solar energy.
                        ``(C) Geothermal energy.
                        ``(D) Renewable biomass.
                        ``(E) Biogas derived exclusively from renewable
                    biomass.
                        ``(F) Biofuels derived exclusively from renewable
                    biomass.
                        ``(G) Qualified hydropower.
                        ``(H) Marine and hydrokinetic renewable energy, as
                    that term is defined in section 632 of the Energy
                    Independence and Security Act of 2007 (42 U.S.C.
                    17211).
                ``(18) Retail electric supplier.--
                        ``(A) In general.--The term `retail electric
                    supplier' means, for any given year, an electric
                    utility that sold not less than 4,000,000 megawatt
                    hours of electric energy to electric consumers for
                    purposes other than resale during the preceding
                    calendar year.
                        ``(B) Inclusions and limitations.--For purposes of
                    determining whether an electric utility qualifies as a
                    retail electric supplier under subparagraph (A)--
                                ``(i) the sales of any affiliate of an
                            electric utility to electric consumers, other
                            than sales to the affiliate's lessees or
                            tenants, for purposes other than resale shall
                            be considered to be sales of such electric
                            utility; and
                                ``(ii) sales by any electric utility to an
                            affiliate, lessee, or tenant of such electric
                            utility shall not be treated as sales to
                            electric consumers.
                        ``(C) Affiliate.--For purposes of this paragraph,
                    the term `affiliate' when used in relation to a person,
                    means another person that directly or indirectly owns
                    or controls, is owned or controlled by, or is under
                    common ownership or control with, such person, as
                    determined under regulations promulgated by the
                    Commission.
                ``(19) Retail electric supplier's base amount.--The term
            `retail electric supplier's base amount' means the total amount
            of electric energy sold by the retail electric supplier,
            expressed in megawatt hours, to electric customers for purposes
            other than resale during the relevant calendar year,
            excluding--
                        ``(A) electricity generated by a hydroelectric
                    facility that is not qualified hydropower;
                        ``(B) electricity generated by a nuclear generating
                    unit placed in service after the date of enactment of
                    this section; and
                        ``(C) the proportion of electricity generated by a
                    fossil-fueled generating unit that is equal to the
                    proportion of greenhouse gases produced by such unit
                    that are captured and geologically sequestered.
                ``(20) Retire and retirement.--The terms `retire' and
            `retirement' with respect to a Federal renewable electricity
            credit, means to disqualify such credit for any subsequent use
            under this section, regardless of whether the use is a sale,
            transfer, exchange, or submission in satisfaction of a
            compliance obligation.
                ``(21) Third-party efficiency provider.--The term `third-
            party efficiency provider' means any retailer, building owner,
            energy service company, financial institution or other
            commercial, industrial or nonprofit entity that is capable of
            providing electricity savings in accordance with the
            requirements of this section.
                ``(22) Total annual electricity savings.--The term `total
            annual electricity savings' means electricity savings during a
            specified calendar year from measures implemented since the
            date of the enactment of this section, taking into account
            verified measure lifetimes or verified annual savings attrition
            rates, as determined in accordance with such regulations as the
            Commission may promulgate and measured in megawatt hours.
        ``(b) Annual Compliance Obligation.--
                ``(1) In general.--For each of calendar years 2012 through
            2039, not later than March 31 of the following calendar year,
            each retail electric supplier shall submit to the Commission an
            amount of Federal renewable electricity credits and
            demonstrated total annual electricity savings that, in the
            aggregate, is equal to such retail electric supplier's annual
            combined target as set forth in subsection (d), except as
            otherwise provided in subsection (h).
                ``(2) Demonstration of savings.--For purposes of this
            subsection, submission of demonstrated total annual electricity
            savings means submission of a report that demonstrates, in
            accordance with the requirements of subsection (f), the total
            annual electricity savings achieved by the retail electric
            supplier within the relevant compliance year.
                ``(3) Renewable electricity credits portion.--Except as
            provided in paragraph (4), each retail electric supplier must
            submit Federal renewable electricity credits equal to at least
            three quarters of the retail electric supplier's annual
            combined target.
                ``(4) State petition.--
                        ``(A) In general.--Upon written request from the
                    Governor of any State (including, for purposes of this
                    paragraph, the Mayor of the District of Columbia), the
                    Commission shall increase, to not more than two fifths,
                    the proportion of the annual combined targets of retail
                    electric suppliers located within such State that may
                    be met through submission of demonstrated total annual
                    electricity savings, provided that such increase shall
                    be effective only with regard to the portion of a
                    retail electric supplier's annual combined target that
                    is attributable to electricity sales within such State.
                        ``(B) Contents.--A Governor's request under this
                    paragraph shall include an explanation of the
                    Governor's rationale for determining, after
                    consultation with the relevant State regulatory
                    authority and other retail electricity ratemaking
                    authorities within the State, to make such request. The
                    request shall specify the maximum proportion of annual
                    combined targets (not more than two fifths) that can be
                    met through demonstrated total annual electricity
                    savings, and the period for which such proportion shall
                    be effective.
                        ``(C) Revision.--The Governor of any State may,
                    after consultation with the relevant State regulatory
                    authority and other retail electricity ratemaking
                    authorities within the State, submit a written request
                    for revocation or revision of a previous request
                    submitted under this paragraph. The Commission shall
                    grant such request, provided that--
                                ``(i) any revocation or revision shall not
                            apply to the combined annual target for any
                            year that is any earlier than 2 calendar years
                            after the calendar year in which such request
                            is submitted, so as to provide retail electric
                            suppliers with adequate notice of such change;
                            and
                                ``(ii) any revision shall meet the
                            requirements of subparagraph (A).
        ``(c) Establishment of Program.--Not later than 1 year after the
    date of enactment of this section, the Commission shall promulgate
    regulations to implement and enforce the requirements of this section.
    In promulgating such regulations, the Commission shall, to the extent
    practicable--
                ``(1) preserve the integrity, and incorporate best
            practices, of existing State and tribal renewable electricity
            and energy efficiency programs;
                ``(2) rely upon existing and emerging State, tribal, or
            regional tracking systems that issue and track non-Federal
            renewable electricity credits; and
                ``(3) cooperate with the States and Indian tribes to
            facilitate coordination between State, tribal, and Federal
            renewable electricity and energy efficiency programs and to
            minimize administrative burdens and costs to retail electric
            suppliers.
        ``(d) Annual Compliance Requirement.--
                ``(1) Annual combined targets.--For each of calendar years
            2012 through 2039, a retail electric supplier's annual combined
            target shall be the product of--
                        ``(A) the required annual percentage for such year,
                    as set forth in paragraph (2); and
                        ``(B) the retail electric supplier's base amount
                    for such year.
                ``(2) Required annual percentage.--For each of calendar
            years 2012 through 2039, the required annual percentage shall
            be as follows:

                ``Calendar year                 Required annual percentage

    2012...................................  6.0
    2013...................................  6.0
    2014...................................  9.5
    2015...................................  9.5
    2016...................................  13.0
    2017...................................  13.0
    2018...................................  16.5
    2019...................................  16.5
    2020...................................  20.0
    2021 through 2039......................  20.0

        ``(e) Federal Renewable Electricity Credits.--
                ``(1) In general.--The regulations promulgated under this
            section shall include provisions governing the issuance,
            tracking, and verification of Federal renewable electricity
            credits. Except as provided in paragraphs (2), (3), and (4) of
            this subsection, the Commission shall issue to each generator
            of renewable electricity, 1 Federal renewable electricity
            credit for each megawatt hour of renewable electricity
            generated by such generator after December 31, 2011. The
            Commission shall assign a unique serial number to each Federal
            renewable electricity credit.
                ``(2) Generation from certain state renewable electricity
            programs.--(A) Except as provided in subparagraph (B), where
            renewable electricity is generated with the support of payments
            from a retail electric supplier pursuant to a State renewable
            electricity program (whether through State alternative
            compliance payments or through payments to a State renewable
            electricity procurement fund or entity), the Commission shall
            issue Federal renewable electricity credits to such retail
            electric supplier for the proportion of the relevant renewable
            electricity generation that is attributable to the retail
            electric supplier's payments, as determined pursuant to
            regulations issued by the Commission. For any remaining portion
            of the relevant renewable electricity generation, the
            Commission shall issue Federal renewable electricity credits to
            the generator, as provided in paragraph (1), except that in no
            event shall more than 1 Federal renewable electricity credit be
            issued for the same megawatt hour of electricity. In
            determining how Federal renewable electricity credits will be
            apportioned among retail electric suppliers and generators in
            such circumstances, the Commission shall consider information
            and guidance furnished by the relevant State or States.
                ``(B) In the case of a central procurement State that
            pursuant to subsection (g) has assumed responsibility for
            compliance with the requirements of subsection (b), the
            Commission shall issue directly to the State Federal renewable
            electricity credits for any renewable electricity for which the
            State, pursuant to a mandate described in subsection (a)(7),
            has centrally procured credits or certificates issued based on
            generation of such renewable electricity.
                ``(3) Certain power sales contracts.--Except as otherwise
            provided in paragraph (2), when a generator has sold renewable
            electricity to a retail electric supplier under a contract for
            power from a facility placed in service before the date of
            enactment of this section, and the contract does not provide
            for the determination of ownership of the Federal renewable
            electricity credits associated with such generation, the
            Commission shall issue such Federal renewable electricity
            credits to the retail electric supplier for the duration of the
            contract.
                ``(4) Credit multiplier for distributed renewable
            generation.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the Commission shall issue 3 Federal
                    renewable electricity credits for each megawatt hour of
                    renewable electricity generated by a distributed
                    renewable generation facility.
                        ``(B) Adjustment.--Except as provided in
                    subparagraph (C), not later than January 1, 2014, and
                    not less frequently than every 4 years thereafter, the
                    Commission shall review the effect of this paragraph
                    and shall, as necessary, reduce the number of Federal
                    renewable electricity credits per megawatt hour issued
                    under this paragraph for any given energy source or
                    technology, but not below 1, to ensure that such number
                    is no higher than the Commission determines is
                    necessary to make distributed renewable generation
                    facilities using such source or technology cost
                    competitive with other sources of renewable electricity
                    generation.
                        ``(C) Facilities placed in service after
                    enactment.--For any distributed renewable generation
                    facility placed in service after the date of enactment
                    of this section, subparagraph (B) shall not apply for
                    the first 10 years after the date on which the facility
                    is placed in service. For each year during such 10-year
                    period, the Commission shall issue to the facility the
                    same number of Federal renewable electricity credits
                    per megawatt hour as are issued to that facility in the
                    year in which such facility is placed in service. After
                    such 10-year period, the Commission shall issue Federal
                    renewable electricity credits to the facility in
                    accordance with the current multiplier as determined
                    pursuant to subparagraph (B).
                ``(5) Credits based on qualified hydropower.--For purposes
            of this subsection, the number of Federal renewable electricity
            credits issued for qualified hydropower shall be calculated--
                        ``(A) based solely on the increase in average
                    annual generation directly resulting from the
                    efficiency improvements or capacity additions described
                    in subsection (a)(13)(A); and
                        ``(B) using the same water flow information used to
                    determine a historic average annual generation baseline
                    for the hydroelectric facility, as certified by the
                    Commission.
                ``(6) Generation from qualified waste-to-energy.--In the
            case of electricity generated from the combustion of any
            municipal solid waste or construction, demolition, or disaster
            debris that is included in the definition of renewable biomass,
            or from the gasification or pyrolization of such waste or
            debris and the combustion of the resulting gas at the same
            facility, the Commission shall issue Federal renewable
            electricity credits only for electricity generated from
            qualified waste-to-energy.
                ``(7) Generation from mixed renewable and nonrenewable
            resources.--If electricity is generated using both a renewable
            energy resource or other qualifying energy resource and an
            energy source that is not a renewable energy resource or other
            qualifying energy resource (as, for example, in the case of co-
            firing of renewable biomass and fossil fuel), the Commission
            shall issue Federal renewable electricity credits based on the
            proportion of the electricity that is attributable to the
            renewable energy resource or other qualifying energy resource.
                ``(8) Prohibition against double-counting.--Except as
            provided in paragraph (4) of this subsection, the Commission
            shall ensure that no more than 1 Federal renewable electricity
            credit will be issued for any megawatt hour of renewable
            electricity and that no Federal renewable electricity credit
            will be used more than once for compliance with this section.
                ``(9) Trading.--The lawful holder of a Federal renewable
            electricity credit may sell, exchange, transfer, submit for
            compliance in accordance with subsection (b), or submit such
            credit for retirement by the Commission.
                ``(10) Banking.--A Federal renewable electricity credit may
            be submitted in satisfaction of the compliance obligation set
            forth in subsection (b) for the compliance year in which the
            credit was issued or for any of the 3 immediately subsequent
            compliance years. The Commission shall retire any Federal
            renewable electricity credit that has not been retired by April
            2 of the calendar year that is 3 years after the calendar year
            in which the credit was issued.
                ``(11) Retirement.--The Commission shall retire a Federal
            renewable electricity credit immediately upon submission by the
            lawful holder of such credit, whether in satisfaction of a
            compliance obligation under subsection (b) or on some other
            basis.
        ``(f) Electricity Savings.--
                ``(1) Standards for measurement of savings.--As part of the
            regulations promulgated under this section, the Commission
            shall prescribe standards and protocols for defining and
            measuring electricity savings and total annual electricity
            savings that can be counted towards the compliance obligation
            set forth in subsection (b). Such protocols and standards
            shall, at minimum--
                        ``(A) specify the types of energy efficiency and
                    energy conservation measures that can be counted;
                        ``(B) require that energy consumption estimates for
                    customer facilities or portions of facilities in the
                    applicable base and current years be adjusted, as
                    appropriate, to account for changes in weather, level
                    of production, and building area;
                        ``(C) account for the useful life of measures;
                        ``(D) include deemed savings values for specific,
                    commonly used measures;
                        ``(E) allow for savings from a program to be
                    estimated based on extrapolation from a representative
                    sample of participating customers;
                        ``(F) include procedures for counting CHP savings,
                    recycled energy savings, and fuel cell savings;
                        ``(G) include procedures for documenting measurable
                    and verifiable electricity savings achieved as a result
                    of market transformation efforts;
                        ``(H) include procedures for counting electricity
                    savings achieved by solar water heating and solar light
                    pipe technology that has the capability to provide
                    measurable data on the amount of megawatt-hours
                    displaced;
                        ``(I) avoid double-counting of savings used for
                    compliance with this section, including savings that
                    are transferred pursuant to paragraph (3);
                        ``(J) ensure that, except as provided in
                    subparagraph (L), the retail electric supplier claiming
                    the savings played a significant role in achieving the
                    savings (including through the activities of a
                    designated agent of the supplier or through the
                    purchase of transferred savings);
                        ``(K) include savings from programs administered by
                    a retail electric supplier (or a retail electricity
                    distributor that is not a retail electric supplier)
                    that are funded by State, Federal, or other sources;
                        ``(L) in any State in which the State regulatory
                    authority has designated 1 or more entities to
                    administer electric ratepayer-funded efficiency
                    programs approved by such State regulatory authority,
                    provide that electricity savings achieved through such
                    programs shall be distributed equitably among retail
                    electric suppliers in accordance with the direction of
                    the relevant State regulatory authority; and
                        ``(M) exclude savings achieved as a result of
                    compliance with mandatory appliance and equipment
                    efficiency standards or building codes.
                ``(2) Standards for third-party verification of savings.--
            The regulations promulgated under this section shall establish
            procedures and standards requiring third-party verification of
            all reported electricity savings, including requirements for
            accreditation of third-party verifiers to ensure that such
            verifiers are professionally qualified and have no conflicts of
            interest.
                ``(3) Transfers of savings.--
                        ``(A) Bilateral contracts for savings transfers.--
                    Subject to the limitations of this paragraph, a retail
                    electric supplier may use electricity savings
                    transferred, pursuant to a bilateral contract, from
                    another retail electric supplier, an owner of an
                    electric distribution facility that is not a retail
                    electric supplier, a State, or a third-party efficiency
                    provider to meet the applicable compliance obligation
                    under subsection (b).
                        ``(B) Requirements.--Electricity savings
                    transferred and used for compliance pursuant to this
                    paragraph shall be--
                                ``(i) measured and verified in accordance
                            with the procedures specified under this
                            subsection;
                                ``(ii) reported in accordance with
                            paragraph (4) of this subsection; and
                                ``(iii) achieved within the same State as
                            is served by the retail electric supplier.
                        ``(C) Regulatory approval.--Nothing in this
                    paragraph shall limit or affect the authority of a
                    State regulatory authority to require a retail electric
                    supplier that is regulated by such authority to obtain
                    such authority's authorization or approval of a
                    contract for transfer of savings under this paragraph.
                ``(4) Reporting savings.--
                        ``(A) Requirements.--The regulations promulgated
                    under this section shall establish requirements
                    governing the submission of reports to demonstrate, in
                    accordance with the protocols and standards for
                    measurement and third-party verification established
                    under this subsection, the total annual electricity
                    savings achieved by a retail electric supplier within
                    the relevant year.
                        ``(B) Review and approval.--The Commission shall
                    review each report submitted to the Commission by a
                    retail electric supplier and shall exclude any
                    electricity savings that have not been adequately
                    demonstrated in accordance with the requirements of
                    this subsection.
                ``(5) State administration.--
                        ``(A) Delegation of authority.--Upon receipt of an
                    application from the Governor of a State (including,
                    for purposes of this subsection, the Mayor of the
                    District of Columbia), the Commission may delegate to
                    the State the authority to review and verify reported
                    electricity savings for purposes of determining
                    demonstrated total annual electricity savings that may
                    be counted towards a retail electric supplier's
                    compliance obligation under subsection (b). The
                    Commission shall make a substantive determination
                    approving or disapproving a State application under
                    this subparagraph, after notice and comment, within 180
                    days of receipt of a complete application.
                        ``(B) Alternative measurement and verification
                    procedures and standards.--As part of an application
                    submitted under subparagraph (A), a State may request
                    to use alternative measurement and verification
                    procedures and standards to those specified in
                    paragraphs (1) and (2), provided the State demonstrates
                    that such alternative procedures and standards provide
                    a level of accuracy of measurement and verification at
                    least equivalent to the Federal procedures and
                    standards promulgated under paragraphs (1) and (2).
                        ``(C) Review of state implementation.--The
                    Commission shall, not less frequently than once every 4
                    years, review each State's implementation of delegated
                    authority under this paragraph to ensure conformance
                    with the requirements of this section. The Commission
                    may, at any time, revoke the delegation of authority
                    under this section upon a finding that the State is not
                    implementing its delegated responsibilities in
                    conformity with this paragraph. As a condition of
                    maintaining its delegated authority under this
                    paragraph, the Commission may require a State to submit
                    a revised application under subparagraph (A) if the
                    Commission has--
                                ``(i) promulgated new or substantially
                            revised measurement and verification procedures
                            and standards under this subsection; or
                                ``(ii) otherwise substantially revised the
                            program established under this section.
        ``(g) Alternative Compliance Payments.--
                ``(1) In general.--A retail electric supplier, or a central
            procurement State that, pursuant to subsection (g), has assumed
            responsibility for compliance with the requirements of
            subsection (b), may satisfy the requirements of subsection (b)
            in whole or in part by submitting in accordance with this
            subsection, in lieu of each Federal renewable electricity
            credit or megawatt hour of demonstrated total annual
            electricity savings that would otherwise be due, a payment
            equal to $25, adjusted for inflation on January 1 of each year
            following calendar year 2009, in accordance with such
            regulations as the Commission may promulgate.
                ``(2) Payment to state funds.--Except as otherwise provided
            in this paragraph and paragraph (4), payments made under this
            subsection shall be made directly to the State or States in
            which the retail electric supplier is located, in proportion to
            the portion of the retail electric supplier's base amount that
            is sold within each relevant State, provided that such payments
            are deposited directly into a fund in the State treasury
            established for this purpose and that the State uses such funds
            in accordance with paragraphs (3) and (5) and with paragraph
            (4), where applicable. If the Commission determines at any time
            that a State is in substantial noncompliance with paragraph (3)
            or (5), or with paragraph (4), where applicable, the Commission
            shall direct that any future alternative compliance payments
            that would otherwise be paid to such State under this
            subsection shall instead be paid to the Commission and
            deposited in the United States Treasury.
                ``(3) State use of funds.--As a condition of continued
            receipt of alternative compliance payments pursuant to this
            subsection, a State shall use such payments exclusively for the
            purposes of--
                        ``(A) deploying technologies that generate
                    electricity from renewable energy resources; or
                        ``(B) implementing cost-effective energy efficiency
                    programs to achieve electricity savings.
                ``(4) Central procurement states.--
                        ``(A) In general.--A central procurement State
                    that, pursuant to subsection (g), has assumed
                    responsibility for compliance with the requirements of
                    subsection (b) shall deposit any alternative compliance
                    payments under this subsection in a unique fund in the
                    State treasury created and used solely for this
                    purpose.
                        ``(B) Requirements.--As a precondition of making
                    alternative compliance payments under this subsection,
                    a central procurement State shall certify to the
                    Commission, in accordance with such requirements as the
                    Commission may prescribe, that--
                                ``(i) making such payments is the lowest
                            cost alternative to meet the requirements of
                            subsection (b); and
                                ``(ii) moneys used by the State to make
                            such payments are in addition to any spending
                            that the State, and any separate entity charged
                            with administering the State central
                            procurement requirement identified under
                            subsection (a)(7), otherwise collectively would
                            direct to the purposes identified in paragraph
                            (3).
                        ``(C) Uses.--A central procurement State that makes
                    alternative compliance payments under this subsection
                    shall certify to the Commission that, in using such
                    payments in accordance with paragraph (3), it has, to
                    the extent practicable, maximized the level of
                    deployment of renewable electricity generation
                    (measured in megawatt hours) and electricity savings
                    per dollar that are achieved through such expenditures.
                ``(5) Reporting.--As a condition of continued receipt of
            alternative compliance payments pursuant to this subsection, a
            State shall, within 12 months of receipt of any such payments
            and at 12-month intervals thereafter until such payments are
            expended, provide a report to the Commission, in accordance
            with such regulations as the Commission may prescribe, giving a
            full accounting of the use of such payments, including a
            detailed description of the activities funded thereby and
            demonstrating compliance with the requirements of this
            subsection.
        ``(g) Central Procurement States.--
                ``(1) In general.--A central procurement State may, upon
            submission of a written request by the Governor of such State
            to the Commission, assume responsibility for compliance with
            the requirements of subsection (b) on behalf of retail electric
            suppliers located in such State, exclusively with regard to the
            portion of such retail electric suppliers' base amount that is
            sold within the State.
                ``(2) Demonstration of electricity savings.--If a central
            procurement State opts to meet any part of the requirements of
            subsection (b) based on the achievement of demonstrated total
            annual electricity savings, regardless of whether such State
            has received delegated authority pursuant to subsection (f)(5),
            such State shall submit such demonstrated total annual
            electricity savings to the Commission through an annual report
            in accordance with requirements prescribed by the Commission by
            regulation, which shall be of equivalent stringency to those
            applicable to retail electric suppliers under subsection (f).
                ``(3) Noncompliance.--If a central procurement State that
            pursuant to this subsection has assumed responsibility for
            compliance with the requirements of subsection (b), fails to
            satisfy the requirements of subsection (b) or (h) for any year,
            the State's assumption of responsibility under this subsection
            shall be discontinued immediately, and retail electric
            suppliers located in such State henceforth shall be directly
            subject to the requirements of this section.
        ``(h) Information Collection.--The Commission may require any
    retail electric supplier, renewable electricity generator, or such
    other entities as the Commission deems appropriate, to provide any
    information the Commission determines appropriate to carry out this
    section. Failure to submit such information or submission of false or
    misleading information under this subsection shall be a violation of
    this section.
        ``(i) Enforcement and Judicial Review.--
                ``(1) Failure to submit credits or demonstrate savings.--If
            any person, other than any central procurement State that
            pursuant to subsection (g) has assumed responsibility for
            compliance with the requirements of subsection (b), fails to
            comply with the requirements of subsection (b) or (h), such
            person shall be liable to pay to the Commission a civil penalty
            equal to the product of--
                        ``(A) double the alternative compliance payment
                    calculated under subsection (h)(1), and
                        ``(B) the aggregate quantity of Federal renewable
                    electricity credits, total annual electricity savings,
                    or equivalent alternative compliance payments that the
                    person failed to submit in violation of the
                    requirements of subsections (b) and (h).
                ``(2) Enforcement.--The Commission shall assess a civil
            penalty under paragraph (1) in accordance with the procedures
            described in section 31(d) of the Federal Power Act (16 U.S.C.
            823b(d)).
                ``(3) Violation of requirement of regulations or orders.--
            Any person, other than any central procurement State that
            pursuant to subsection (g) has assumed responsibility for
            compliance with the requirements of subsection (b), who
            violates, or fails or refuses to comply with, any requirement
            of a regulation promulgated or order issued under this section
            shall be subject to a civil penalty under section 316A(b) of
            the Federal Power Act (16 U.S.C. 825o-1). Such penalty shall be
            assessed by the Commission in the same manner as in the case of
            a violation referred to in section 316A(b) of such Act.
        ``(j) Judicial Review.--Any person aggrieved by a final action
    taken by the Commission under this section, other than the assessment
    of a civil penalty under subsection (j), may use the procedures for
    review described in section 313 of the Federal Power Act (16 U.S.C.
    825l). For purposes of this paragraph, references to an order in
    section 313 of such Act shall be deemed to refer also to all other
    final actions of the Commission under this section other than the
    assessment of a civil penalty under subsection (i).
        ``(k) Savings Provisions.--Nothing in this section shall--
                ``(1) diminish or qualify any authority of a State, a
            political subdivision of a State, or an Indian tribe to--
                        ``(A) adopt or enforce any law or regulation
                    respecting renewable electricity or energy efficiency,
                    including any law or regulation establishing
                    requirements more stringent than those established by
                    this section, provided that no such law or regulation
                    may relieve any person of any requirement otherwise
                    applicable under this section; or
                        ``(B) regulate the acquisition and disposition of
                    Federal renewable electricity credits by retail
                    electric suppliers within the jurisdiction of such
                    State, political subdivision, or Indian tribe,
                    including the authority to require such retail electric
                    supplier to acquire and submit to the Secretary for
                    retirement Federal renewable electricity credits in
                    excess of those submitted under this section; or
                ``(2) affect the application of, or the responsibility for
            compliance with, any other provision of law or regulation,
            including environmental and licensing requirements.
        ``(l) Sunset.--This section expires on December 31, 2040.''.
        (b) Conforming Amendment.--The table of contents set forth in
    section 1(b) of the Public Utility Regulatory Policies Act of 1978 (16
    U.S.C. 2601 and following) is amended by inserting after the item
    relating to section 609 the following:

    ``Sec. 610. Combined efficiency and renewable electricity standard.''.

    SEC. 102. CLARIFYING STATE AUTHORITY TO ADOPT RENEWABLE ENERGY
                  INCENTIVES.

         Section 210 of the Public Utility Regulatory Policies Act of 1978
    is amended by adding at the end thereof:
        ``(o) Clarification of State Authority to Adopt Renewable Energy
    Incentives.--Notwithstanding any other provision of this Act or the
    Federal Power Act, a State legislature or regulatory authority may set
    the rates for a sale of electric energy by a facility generating
    electric energy from renewable energy sources pursuant to a State-
    approved production incentive program under which the facility
    voluntarily sells electric energy. For purposes of this subsection,
    `State-approved production incentive program' means a requirement
    imposed pursuant to State law, or by a State regulatory authority
    acting within its authority under State law, that an electric utility
    purchase renewable energy (as defined in section 609 of this Act) at a
    specified rate.''.

    SEC. 103. FEDERAL RENEWABLE ENERGY PURCHASES.

        (a) Requirement.--For each of calendar years 2012 through 2039, the
    President shall ensure that, of the total amount of electricity Federal
    agencies consume in the United States during each calendar year, the
    following percentage shall be renewable electricity:

                 Calendar year                  Required annual percentage

    2012...................................  6.0
    2013...................................  6.0
    2014...................................  9.5
    2015...................................  9.5
    2016...................................  13.0
    2017...................................  13.0
    2018...................................  16.5
    2019...................................  16.5
    2020...................................  20.0
    2021 through 2039......................  20.0

        (b) Definitions.--For purposes of this section:
                (1) Renewable electricity.--The term ``renewable
            electricity'' shall have the meaning given in section 610 of
            the Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
            2601 and following).
                (2) Renewable energy resource.--The term ``renewable energy
            resource'' shall have the meaning given in section 610 of the
            Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601
            and following).
        (c) Modification of Requirement.--If the President determines that
    the Federal Government cannot feasibly meet the requirement established
    in subsection (a) in a specific calendar year, the President may, by
    written order, reduce such requirement for such calendar year to a
    percentage the President determines the Federal Government can feasibly
    meet.
        (d) Reports.--Not later than April 1, 2013, and each year
    thereafter, the Secretary of Energy shall provide a report to Congress
    on the percentage of each Federal agency's electricity consumption in
    the United States that was renewable electricity in the previous
    calendar year.
        (e) Contracts for Renewable Energy.--(1) Notwithstanding section
    501(b)(1)(B) of title 40, United States Code, a contract for the
    acquisition of electricity generated from a renewable energy resource
    for the Federal Government may be made for a period of not more than 20
    years.
        (2) Not later than 90 days after the date of enactment of this
    subsection, the Secretary of Energy, through the Federal Energy
    Management Program, shall publish a standardized renewable energy
    purchase agreement, setting forth commercial terms and conditions, that
    Federal agencies may use to acquire electricity generated from a
    renewable energy resource.
        (3) The Secretary of Energy shall provide technical assistance to
    assist Federal agencies in implementing this subsection.

                  Subtitle B--Carbon Capture and Sequestration

    SEC. 111. NATIONAL STRATEGY.

        (a) In General.--Not later than 1 year after the date of enactment
    of this Act, the Administrator, in consultation with the Secretary of
    Energy, the Secretary of the Interior, and the heads of such other
    relevant Federal agencies as the President may designate, shall submit
    to Congress a report setting forth a unified and comprehensive strategy
    to address the key legal, regulatory and other barriers to the
    commercial-scale deployment of carbon capture and sequestration.
        (b) Barriers.-- The report under this section shall--
                (1) identify those regulatory, legal, and other gaps and
            barriers that could be addressed by a Federal agency using
            existing statutory authority, those, if any, that require
            Federal legislation, and those that would be best addressed at
            the State, tribal, or regional level;
                (2) identify regulatory implementation challenges,
            including those related to approval of State and tribal
            programs and delegation of authority for permitting; and
                (3) recommend rulemakings, Federal legislation, or other
            actions that should be taken to further evaluate and address
            such barriers.

    SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION SITES.

        (a) Coordinated Certification and Permitting Process.--Title VIII
    of the Clean Air Act, as added by section 331 of this Act, is amended
    by adding after section 812 (as added by section 116 of this Act) the
    following:

    ``SEC. 813. GEOLOGIC SEQUESTRATION SITES.

        ``(a) Coordinated Process.--The Administrator shall establish a
    coordinated approach to certifying and permitting geologic
    sequestration, taking into consideration all relevant statutory
    authorities. In establishing such approach, the Administrator shall--
                ``(1) take into account, and reduce redundancy with, the
            requirements of section 1421 of the Safe Drinking Water Act (42
            U.S.C. 300h), as amended by section 112(b) of the American
            Clean Energy and Security Act of 2009, including the rulemaking
            for geologic sequestration wells described at 73 Fed. Reg.
            43491-541 (July 25, 2008); and
                ``(2) to the extent practicable, reduce the burden on
            certified entities and implementing authorities.
        ``(b) Regulations.--Not later than 2 years after the date of
    enactment of this title, the Administrator shall promulgate regulations
    to protect human health and the environment by minimizing the risk of
    escape to the atmosphere of carbon dioxide injected for purposes of
    geologic sequestration.
        ``(c) Requirements.--The regulations under subsection (b) shall
    include--
                ``(1) a process to obtain certification for geologic
            sequestration under this section; and
                ``(2) requirements for--
                        ``(A) monitoring, record keeping, and reporting for
                    emissions associated with injection into, and escape
                    from, geologic sequestration sites, taking into account
                    any requirements or protocols developed under section
                    713;
                        ``(B) public participation in the certification
                    process that maximizes transparency;
                        ``(C) the sharing of data between States, Indian
                    tribes, and the Environmental Protection Agency; and
                        ``(D) other elements or safeguards necessary to
                    achieve the purpose set forth in subsection (b).
        ``(d) Report.--Not later than 2 years after the promulgation of
    regulations under subsection (b), and at 3-year intervals thereafter,
    the Administrator shall deliver to the Committee on Energy and Commerce
    of the House of Representatives and the Committee on Environment and
    Public Works of the Senate a report on geologic sequestration in the
    United States, and, to the extent relevant, other countries in North
    America. Such report shall include--
                ``(1) data regarding injection, emissions to the
            atmosphere, if any, and performance of active and closed
            geologic sequestration sites, including those where enhanced
            hydrocarbon recovery operations occur;
                ``(2) an evaluation of the performance of relevant Federal
            environmental regulations and programs in ensuring
            environmentally protective geologic sequestration practices;
                ``(3) recommendations on how such programs and regulations
            should be improved or made more effective; and
                ``(4) other relevant information.''.
        (b) Safe Drinking Water Act Standards.--Section 1421 of the Safe
    Drinking Water Act (42 U.S.C. 300h) is amended by inserting after
    subsection (d) the following:
        ``(e) Carbon Dioxide Geologic Sequestration Wells.--
                ``(1) In general.--Not later than 1 year after the date of
            enactment of this subsection, the Administrator shall
            promulgate regulations under subsection (a) for carbon dioxide
            geologic sequestration wells.
                ``(2) Financial responsibility.--The regulations referred
            to in paragraph (1) shall include requirements for maintaining
            evidence of financial responsibility, including financial
            responsibility for emergency and remedial response, well
            plugging, site closure, and post-injection site care. Financial
            responsibility may be established for carbon dioxide geologic
            sequestration wells in accordance with regulations promulgated
            by the Administrator by any one, or any combination, of the
            following: insurance, guarantee, trust, standby trust, surety
            bond, letter of credit, qualification as a self-insurer, or any
            other method satisfactory to the Administrator.''.

    SEC. 113. STUDIES AND REPORTS.

        (a) Study of Legal Framework for Geologic Sequestration Sites.--
                (1) Establishment of task force.--As soon as practicable,
            but not later than 6 months after the date of enactment of this
            Act, the Administrator shall establish a task force to be
            composed of an equal number of subject matter experts,
            nongovernmental organizations with expertise in environmental
            policy, academic experts with expertise in environmental law,
            State and tribal officials with environmental expertise,
            representatives of State and tribal Attorneys General,
            representatives from the Environmental Protection Agency, the
            Department of the Interior, the Department of Energy, the
            Department of Transportation, and other relevant Federal
            agencies, and members of the private sector, to conduct a study
            of--
                        (A) existing Federal environmental statutes, State
                    environmental statutes, and State common law that apply
                    to geologic sequestration sites for carbon dioxide,
                    including the ability of such laws to serve as risk
                    management tools;
                        (B) the existing statutory framework, including
                    Federal and State laws, that apply to harm and damage
                    to the environment or public health at closed sites
                    where carbon dioxide injection has been used for
                    enhanced hydrocarbon recovery;
                        (C) the statutory framework, environmental health
                    and safety considerations, implementation issues, and
                    financial implications of potential models for Federal,
                    State, or private sector assumption of liabilities and
                    financial responsibilities with respect to closed
                    geologic sequestration sites;
                        (D) private sector mechanisms, including insurance
                    and bonding, that may be available to manage
                    environmental, health and safety risk from closed
                    geologic sequestration sites; and
                        (E) the subsurface mineral rights, water rights, or
                    property rights issues associated with geologic
                    sequestration of carbon dioxide, including issues
                    specific to Federal lands.
                (2) Report.--Not later than 18 months after the date of
            enactment of this Act, the task force established under
            paragraph (1) shall submit to Congress a report describing the
            results of the study conducted under that paragraph including
            any consensus recommendations of the task force.
        (b) Environmental Statutes.--
                (1) Study.--The Administrator shall conduct a study
            examining how, and under what circumstances, the environmental
            statutes for which the Environmental Protection Agency has
            responsibility would apply to carbon dioxide injection and
            geologic sequestration activities.
                (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 study conducted
            under paragraph (1).

    SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEMONSTRATION AND EARLY
                  DEPLOYMENT PROGRAM.

        (a) Definitions.--For purposes of this section:
                (1) Secretary.--The term ``Secretary'' means the Secretary
            of Energy.
                (2) Distribution utility.--The term ``distribution
            utility'' means an entity that distributes electricity directly
            to retail consumers under a legal, regulatory, or contractual
            obligation to do so.
                (3) Electric utility.--The term ``electric utility'' has
            the meaning provided by section 3(22) of the Federal Power Act
            (16 U.S.C. 796(22)).
                (4) Fossil fuel-based electricity.--The term ``fossil fuel-
            based electricity'' means electricity that is produced from the
            combustion of fossil fuels.
                (5) Fossil fuel.--The term ``fossil fuel'' means coal,
            petroleum, natural gas or any derivative of coal, petroleum, or
            natural gas.
                (6) Corporation.--The term ``Corporation'' means the Carbon
            Storage Research Corporation established in accordance with
            this section.
                (7) Qualified industry organization.--The term ``qualified
            industry organization'' means the Edison Electric Institute,
            the American Public Power Association, the National Rural
            Electric Cooperative Association, a successor organization of
            such organizations, or a group of owners or operators of
            distribution utilities delivering fossil fuel-based electricity
            who collectively represent at least 20 percent of the volume of
            fossil fuel-based electricity delivered by distribution
            utilities to consumers in the United States.
                (8) Retail consumer.--The term ``retail consumer'' means an
            end-user of electricity.
        (b) Carbon Storage Research Corporation.--
                (1) Establishment.--
                        (A) Referendum.--Qualified industry organizations
                    may conduct, at their own expense, a referendum among
                    the owners or operators of distribution utilities
                    delivering fossil fuel-based electricity for the
                    creation of a Carbon Storage Research Corporation. Such
                    referendum shall be conducted by an independent
                    auditing firm agreed to by the qualified industry
                    organizations. Voting rights in such referendum shall
                    be based on the quantity of fossil fuel-based
                    electricity delivered to consumers in the previous
                    calendar year or other representative period as
                    determined by the Secretary pursuant to subsection (f).
                    Upon approval of those persons representing two-thirds
                    of the total quantity of fossil fuel-based electricity
                    delivered to retail consumers, the Corporation shall be
                    established unless opposed by the State regulatory
                    authorities pursuant to subparagraph (B). All
                    distribution utilities voting in the referendum shall
                    certify to the independent auditing firm the quantity
                    of fossil fuel-based electricity represented by their
                    vote.
                        (B) State regulatory authorities.--Upon its own
                    motion or the petition of a qualified industry
                    organization, each State regulatory authority shall
                    consider its support or opposition to the creation of
                    the Corporation under subparagraph (A). State
                    regulatory authorities may notify the independent
                    auditing firm referred to in subparagraph (A) of their
                    views on the creation of the Corporation within 180
                    days after the date of enactment of this Act. If 40
                    percent or more of the State regulatory authorities
                    submit to the independent auditing firm written notices
                    of opposition, the Corporation shall not be established
                    notwithstanding the approval of the qualified industry
                    organizations as provided in subparagraph (A).
                (2) Termination.--The Corporation shall be authorized to
            collect assessments and conduct operations pursuant to this
            section for a 10-year period from the date 6 months after the
            date of enactment of this Act. After such 10-year period, the
            Corporation is no longer authorized to collect assessments and
            shall be dissolved on the date 15 years after such date of
            enactment, unless the period is extended by an Act of Congress.
                (3) Governance.--The Corporation shall operate as a
            division or affiliate of the Electric Power Research Institute
            (referred to in this section as ``EPRI'') and be managed by a
            Board of not more than 15 voting members responsible for its
            operations, including compliance with this section. EPRI, in
            consultation with the Edison Electric Institute, the American
            Public Power Association and the National Rural Electric
            Cooperative Association shall appoint the Board members under
            clauses (i), (ii), and (iii) of subparagraph (A) from among
            candidates recommended by those organizations. At least a
            majority of the Board members appointed by EPRI shall be
            representatives of distribution utilities subject to
            assessments under subsection (d).
                        (A) Members.--The Board shall include at least one
                    representative of each of the following:
                                (i) Investor-owned utilities.
                                (ii) Utilities owned by a State agency, a
                            municipality, and an Indian tribe.
                                (iii) Rural electric cooperatives.
                                (iv) Fossil fuel producers.
                                (v) Nonprofit environmental organizations.
                                (vi) Independent generators or wholesale
                            power providers.
                                (vii) Consumer groups.
                        (B) Nonvoting members.--The Board shall also
                    include as additional nonvoting Members the Secretary
                    of Energy or his designee and 2 representatives of
                    State regulatory authorities as defined in section
                    3(17) of the Public Utility Regulatory Policies Act of
                    1978 (16 U.S.C. 2602(17)), each designated by the
                    National Association of State Regulatory Utility
                    Commissioners from States that are not within the same
                    transmission interconnection.
                (4) Compensation.--Corporation Board members shall receive
            no compensation for their services, nor shall Corporation Board
            members be reimbursed for expenses relating to their service.
                (5) Terms.--Corporation Board members shall serve terms of
            4 years and may serve not more than 2 full consecutive terms.
            Members filling unexpired terms may serve not more than a total
            of 8 consecutive years. Former members of the Corporation Board
            may be reappointed to the Corporation Board if they have not
            been members for a period of 2 years. Initial appointments to
            the Corporation Board shall be for terms of 1, 2, 3, and 4
            years, staggered to provide for the selection of 3 members each
            year.
                (6) Status of corporation.--The Corporation shall not be
            considered to be an agency, department, or instrumentality of
            the United States, and no officer or director or employee of
            the Corporation shall be considered to be an officer or
            employee of the United States Government, for purposes of title
            5 or title 31 of the United States Code, or for any other
            purpose, and no funds of the Corporation shall be treated as
            public money for purposes of chapter 33 of title 31, United
            States Code, or for any other purpose.
        (c) Functions and Administration of the Corporation.--
                (1) In general.--The Corporation shall establish and
            administer a program to accelerate the commercial availability
            of carbon dioxide capture and storage technologies and methods,
            including technologies which capture and store, or capture and
            convert, carbon dioxide. Under such program competitively
            awarded grants, contracts, and financial assistance shall be
            provided and entered into with eligible entities. Except as
            provided in paragraph (8), the Corporation shall use all funds
            derived from assessments under subsection (d) to issue grants
            and contracts to eligible entities.
                (2) Purpose.--The purposes of the grants, contracts, and
            assistance under this subsection shall be to support
            commercial-scale demonstrations of carbon capture or storage
            technology projects capable of advancing the technologies to
            commercial readiness. Such projects should encompass a range of
            different coal and other fossil fuel varieties, be
            geographically diverse, involve diverse storage media, and
            employ capture or storage, or capture and conversion,
            technologies potentially suitable either for new or for
            retrofit applications. The Corporation shall seek, to the
            extent feasible, to support at least 5 commercial-scale
            demonstration projects integrating carbon capture and
            sequestration or conversion technologies.
                (3) Eligible entities.--Entities eligible for grants,
            contracts or assistance under this subsection may include
            distribution utilities, electric utilities and other private
            entities, academic institutions, national laboratories, Federal
            research agencies, State and tribal research agencies,
            nonprofit organizations, or consortiums of 2 or more entities.
            Pilot-scale and similar small-scale projects are not eligible
            for support by the Corporation. Owners or developers of
            projects supported by the Corporation shall, where appropriate,
            share in the costs of such projects.
                (4) Grants for early movers.--Fifty percent of the funds
            raised under this section shall be provided in the form of
            grants to electric utilities that had, prior to the award of
            any grant under this section, committed resources to deploy a
            large scale electricity generation unit with integrated carbon
            capture and sequestration or conversion applied to a
            substantial portion of the unit's carbon dioxide emissions.
            Grant funds shall be provided to defray costs incurred by such
            electricity utilities for at least 5 such electricity
            generation units.
                (5) Administration.--The members of the Board of Directors
            of the Corporation shall elect a Chairman and other officers as
            necessary, may establish committees and subcommittees of the
            Corporation, and shall adopt rules and bylaws for the conduct
            of business and the implementation of this section. The Board
            shall appoint an Executive Director and professional support
            staff who may be employees of the Electric Power Research
            Institute (EPRI). After consultation with the Technical
            Advisory Committee established under subsection (j), the
            Secretary, and the Director of the National Energy Technology
            Laboratory to obtain advice and recommendations on plans,
            programs, and project selection criteria, the Board shall
            establish priorities for grants, contracts, and assistance;
            publish requests for proposals for grants, contracts, and
            assistance; and award grants, contracts, and assistance
            competitively, on the basis of merit, after the establishment
            of procedures that provide for scientific peer review by the
            Technical Advisory Committee. The Board shall give preference
            to applications that reflect the best overall value and
            prospect for achieving the purposes of the section, such as
            those which demonstrate an integrated approach for capture and
            storage or capture and conversion technologies. The Board
            members shall not participate in making grants or awards to
            entities with whom they are affiliated.
                (6) Uses of grants, contracts, and assistance.--A grant,
            contract, or other assistance provided under this subsection
            may be used to purchase carbon dioxide when needed to conduct
            tests of carbon dioxide storage sites, in the case of
            established projects that are storing carbon dioxide emissions,
            or for other purposes consistent with the purposes of this
            section. The Corporation shall make publicly available at no
            cost information learned as a result of projects which it
            supports financially.
                (7) Intellectual property.--The Board shall establish
            policies regarding the ownership of intellectual property
            developed as a result of Corporation grants and other forms of
            technology support. Such policies shall encourage individual
            ingenuity and invention.
                (8) Administrative expenses.--Up to 5 percent of the funds
            collected in any fiscal year under subsection (d) may be used
            for the administrative expenses of operating the Corporation
            (not including costs incurred in the determination and
            collection of the assessments pursuant to subsection (d)).
                (9) Programs and budget.--Before August 1 each year, the
            Corporation, after consulting with the Technical Advisory
            Committee and the Secretary and the Director of the
            Department's National Energy Technology Laboratory and other
            interested parties to obtain advice and recommendations, shall
            publish for public review and comment its proposed plans,
            programs, project selection criteria, and projects to be funded
            by the Corporation for the next calendar year. The Corporation
            shall also publish for public review and comment a budget plan
            for the next calendar year, including the probable costs of all
            programs, projects, and contracts and a recommended rate of
            assessment sufficient to cover such costs. The Secretary may
            recommend programs and activities the Secretary considers
            appropriate. The Corporation shall include in the first
            publication it issues under this paragraph a strategic plan or
            roadmap for the achievement of the purposes of the Corporation,
            as set forth in paragraph (2).
                (10) Records; audits.--The Corporation shall keep minutes,
            books, and records that clearly reflect all of the acts and
            transactions of the Corporation and make public such
            information. The books of the Corporation shall be audited by a
            certified public accountant at least once each fiscal year and
            at such other times as the Corporation may designate. Copies of
            each audit shall be provided to the Congress, all Corporation
            board members, all qualified industry organizations, each State
            regulatory authority and, upon request, to other members of the
            industry. If the audit determines that the Corporation's
            practices fail to meet generally accepted accounting principles
            the assessment collection authority of the Corporation under
            subsection (d) shall be suspended until a certified public
            accountant renders a subsequent opinion that the failure has
            been corrected. The Corporation shall make its books and
            records available for review by the Secretary or the
            Comptroller General of the United States.
                (11) Public access.--The Corporation Board's meetings shall
            be open to the public and shall occur after at least 30 days
            advance public notice. Meetings of the Board of Directors may
            be closed to the public where the agenda of such meetings
            includes only confidential matters pertaining to project
            selection, the award of grants or contracts, personnel matters,
            or the receipt of legal advice. The minutes of all meetings of
            the Corporation shall be made available to and readily
            accessible by the public.
                (12) Annual report.--Each year the Corporation shall
            prepare and make publicly available a report which includes an
            identification and description of all programs and projects
            undertaken by the Corporation during the previous year. The
            report shall also detail the allocation or planned allocation
            of Corporation resources for each such program and project. The
            Corporation shall provide its annual report to the Congress,
            the Secretary, each State regulatory authority, and upon
            request to the public. The Secretary shall, not less than 60
            days after receiving such report, provide to the President and
            Congress a report assessing the progress of the Corporation in
            meeting the objectives of this section.
        (d) Assessments.--
                (1) Amount.--(A) In all calendar years following its
            establishment, the Corporation shall collect an assessment on
            distribution utilities for all fossil fuel-based electricity
            delivered directly to retail consumers (as determined under
            subsection (f)). The assessments shall reflect the relative
            carbon dioxide emission rates of different fossil fuel-based
            electricity, and initially shall be not less than the following
            amounts for coal, natural gas, and oil:

    Fuel type                               Rate of assessment per kilowatt
                                             hour
      Coal................................  $0.00043
      Natural Gas.........................  $0.00022
      Oil.................................  $0.00032.

                (B) The Corporation is authorized to adjust the assessments
            on fossil fuel-based electricity to reflect changes in the
            expected quantities of such electricity from different fuel
            types, such that the assessments generate not less than $1.0
            billion and not more than $1.1 billion annually. The
            Corporation is authorized to supplement assessments through
            additional financial commitments.
                (2) Investment of funds.--Pending disbursement pursuant to
            a program, plan, or project, the Corporation may invest funds
            collected through assessments under this subsection, and any
            other funds received by the Corporation, only in obligations of
            the United States or any agency thereof, in general obligations
            of any State or any political subdivision thereof, in any
            interest-bearing account or certificate of deposit of a bank
            that is a member of the Federal Reserve System, or in
            obligations fully guaranteed as to principal and interest by
            the United States.
                (3) Reversion of unused funds.--If the Corporation does not
            disburse, dedicate or assign 75 percent or more of the
            available proceeds of the assessed fees in any calendar year 7
            or more years following its establishment, due to an absence of
            qualified projects or similar circumstances, it shall reimburse
            the remaining undedicated or unassigned balance of such fees,
            less administrative and other expenses authorized by this
            section, to the distribution utilities upon which such fees
            were assessed, in proportion to their collected assessments.
        (e)  ERCOT.--
                (1) Assessment, collection, and remittance.--(A)
            Notwithstanding any other provision of this section, within
            ERCOT, the assessment provided for in subsection (d) shall be--
                        (i) levied directly on qualified scheduling
                    entities, or their successor entities;
                        (ii) charged consistent with other charges imposed
                    on qualified scheduling entities as a fee on energy
                    used by the load-serving entities; and
                        (iii) collected and remitted by ERCOT to the
                    Corporation in the amounts and in the same manner as
                    set forth in subsection (d).
                (B) The assessment amounts referred to in subparagraph (A)
            shall be--
                        (i) determined by the amount and types of fossil
                    fuel-based electricity delivered directly to all retail
                    customers in the prior calendar year beginning with the
                    year ending immediately prior to the period described
                    in subsection (b)(2); and
                        (ii) take into account the number of renewable
                    energy credits retired by the load-serving entities
                    represented by a qualified scheduling entity within the
                    prior calendar year.
                (2) Administration expenses.--Up to 1 percent of the funds
            collected in any fiscal year by ERCOT under the provisions of
            this subsection may be used for the administrative expenses
            incurred in the determination, collection and remittance of the
            assessments to the Corporation.
                (3) Audit.--ERCOT shall provide a copy of its annual audit
            pertaining to the administration of the provisions of this
            subsection to the Corporation.
                (4) Definitions.--For the purposes of this subsection:
                        (A) The term ``ERCOT'' means the Electric
                    Reliability Council of Texas.
                        (B) The term ``load-serving entities'' has the
                    meaning adopted by ERCOT Protocols and in effect on the
                    date of enactment of this Act.
                        (C) The term ``qualified scheduling entities'' has
                    the meaning adopted by ERCOT Protocols and in effect on
                    the date of enactment of this Act.
                        (D) The term ``renewable energy credit'' has the
                    meaning as promulgated and adopted by the Public
                    Utility Commission of Texas pursuant to section
                    39.904(b) of the Public Utility Regulatory Act of 1999,
                    and in effect on the date of enactment of this Act.
        (f) Determination of Fossil Fuel-based Electricity Deliveries.--
                (1) Findings.--The Congress finds that:
                        (A) The assessments under subsection (d) are to be
                    collected based on the amount of fossil fuel-based
                    electricity delivered by each distribution utility.
                        (B) Since many distribution utilities purchase all
                    or part of their retail consumer's electricity needs
                    from other entities, it may not be practical to
                    determine the precise fuel mix for the power sold by
                    each individual distribution utility.
                        (C) It may be necessary to use average data, often
                    on a regional basis with reference to Regional
                    Transmission Organization (``RTO'') or NERC regions, to
                    make the determinations necessary for making
                    assessments.
                (2) DOE proposed rule.--The Secretary, acting in close
            consultation with the Energy Information Administration, shall
            issue for notice and comment a proposed rule to determine the
            level of fossil fuel electricity delivered to retail customers
            by each distribution utility in the United States during the
            most recent calendar year or other period determined to be most
            appropriate. Such proposed rule shall balance the need to be
            efficient, reasonably precise, and timely, taking into account
            the nature and cost of data currently available and the nature
            of markets and regulation in effect in various regions of the
            country. Different methodologies may be applied in different
            regions if appropriate to obtain the best balance of such
            factors.
                (3) Final rule.--Within 6 months after the date of
            enactment of this Act, and after opportunity for comment, the
            Secretary shall issue a final rule under this subsection for
            determining the level and type of fossil fuel-based electricity
            delivered to retail customers by each distribution utility in
            the United States during the appropriate period. In issuing
            such rule, the Secretary may consider opportunities and costs
            to develop new data sources in the future and issue
            recommendations for the Energy Information Administration or
            other entities to collect such data. After notice and
            opportunity for comment the Secretary may, by rule,
            subsequently update and modify the methodology for making such
            determinations.
                (4) Annual determinations.--Pursuant to the final rule
            issued under paragraph (3), the Secretary shall make annual
            determinations of the amounts and types for each such utility
            and publish such determinations in the Federal Register. Such
            determinations shall be used to conduct the referendum under
            subsection (b) and by the Corporation in applying any
            assessment under this subsection.
                (5) Rehearing and judicial review.--The owner or operator
            of any distribution utility that believes that the Secretary
            has misapplied the methodology in the final rule in determining
            the amount and types of fossil fuel electricity delivered by
            such distribution utility may seek rehearing of such
            determination within 30 days of publication of the
            determination in the Federal Register. The Secretary shall
            decide such rehearing petitions within 30 days. The Secretary's
            determinations following rehearing shall be final and subject
            to judicial review in the United States Court of Appeals for
            the District of Columbia.
        (g) Compliance With Corporation Assessments.--The Corporation may
    bring an action in the appropriate court of the United States to compel
    compliance with an assessment levied by the Corporation under this
    section. A successful action for compliance under this subsection may
    also require payment by the defendant of the costs incurred by the
    Corporation in bringing such action.
        (h) Midcourse Review.--Not later than 5 years following
    establishment of the Corporation, the Comptroller General of the United
    States shall prepare an analysis, and report to Congress, assessing the
    Corporation's activities, including project selection and methods of
    disbursement of assessed fees, impacts on the prospects for
    commercialization of carbon capture and storage technologies, adequacy
    of funding, and administration of funds. The report shall also make
    such recommendations as may be appropriate in each of these areas. The
    Corporation shall reimburse the Government Accountability Office for
    the costs associated with performing this midcourse review.
        (i) Recovery of Costs.--
                (1) In general.--A distribution utility whose transmission,
            delivery, or sales of electric energy are subject to any form
            of rate regulation shall not be denied the opportunity to
            recover the full amount of the prudently incurred costs
            associated with complying with this section, consistent with
            applicable State or Federal law.
                (2) Ratepayer rebates.--Regulatory authorities that approve
            cost recovery pursuant to paragraph (1) may order rebates to
            ratepayers to the extent that distribution utilities are
            reimbursed undedicated or unassigned balances pursuant to
            subsection (d)(3).
        (j) Technical Advisory Committee.--
                (1) Establishment.--There is established an advisory
            committee, to be known as the ``Technical Advisory Committee''.
                (2) Membership.--The Technical Advisory Committee shall be
            comprised of not less than 7 members appointed by the Board
            from among academic institutions, national laboratories,
            independent research institutions, and other qualified
            institutions. No member of the Committee shall be affiliated
            with EPRI or with any organization having members serving on
            the Board. At least one member of the Committee shall be
            appointed from among officers or employees of the Department of
            Energy recommended to the Board by the Secretary of Energy.
                (3) Chairperson and vice chairperson.--The Board shall
            designate one member of the Technical Advisory Committee to
            serve as Chairperson of the Committee and one to serve as Vice
            Chairperson of the Committee.
                (4) Compensation.--The Board shall provide compensation to
            members of the Technical Advisory Committee for travel and
            other incidental expenses and such other compensation as the
            Board determines to be necessary.
                (5) Purpose.--The Technical Advisory Committee shall
            provide independent assessments and technical evaluations, as
            well as make non-binding recommendations to the Board,
            concerning Corporation activities, including but not limited to
            the following:
                        (A) Reviewing and evaluating the Corporation's
                    plans and budgets described in subsection (c)(9), as
                    well as any other appropriate areas, which could
                    include approaches to prioritizing technologies,
                    appropriateness of engineering techniques, monitoring
                    and verification technologies for storage, geological
                    site selection, and cost control measures.
                        (B) Making annual non-binding recommendations to
                    the Board concerning any of the matters referred to in
                    subparagraph (A), as well as what types of investments,
                    scientific research, or engineering practices would
                    best further the goals of the Corporation.
                (6) Public availability.--All reports, evaluations, and
            other materials of the Technical Advisory Committee shall be
            made available to the public by the Board, without charge, at
            time of receipt by the Board.
        (k) Lobbying Restrictions.--No funds collected by the Corporation
    shall be used in any manner for influencing legislation or elections,
    except that the Corporation may recommend to the Secretary and the
    Congress changes in this section or other statutes that would further
    the purposes of this section.
        (l) Davis-Bacon Compliance.--The Corporation shall ensure that
    entities receiving grants, contracts, or other financial support from
    the Corporation for the project activities authorized by this section
    are in compliance with the Davis-Bacon Act (40 U.S.C. 276a-276a-5).

    SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION
                  TECHNOLOGIES.

        Part H of title VII of the Clean Air Act (as added by section 321
    of this Act) is amended by adding the following new section after
    section 785:

    ``SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAPTURE AND SEQUESTRATION
                  TECHNOLOGIES.

        ``(a) Regulations.--Not later than 2 years after the date of
    enactment of this title, the Administrator shall promulgate regulations
    providing for the distribution of emission allowances allocated
    pursuant to section 782(f), pursuant to the requirements of this
    section, to support the commercial deployment of carbon capture and
    sequestration technologies in both electric power generation and
    industrial operations.
        ``(b) Eligibility Criteria.--For an owner or operator of a project
    to be eligible to receive emission allowances under this section, the
    project must--
                ``(1) implement carbon capture and sequestration
            technology--
                        ``(A) at an electric generating unit that--
                                ``(i) has a nameplate capacity of 200
                            megawatts or more;
                                ``(ii) in the case of a retrofit
                            application, applies the carbon capture and
                            sequestration technology to the flue gas from
                            at least 200 megawatts of the total nameplate
                            generating capacity of the unit, provided that
                            clause (i) shall apply without exception;
                                ``(iii) derives at least 50 percent of its
                            annual fuel input from coal, petroleum coke, or
                            any combination of these 2 fuels; and
                                ``(iv) upon implementation of capture and
                            sequestration technology, will achieve an
                            emission limit that is at least a 50 percent
                            reduction in emissions of the carbon dioxide
                            produced by--
                                        ``(I) the unit, measured on an
                                    annual basis, determined in accordance
                                    with section 812(b)(2); or
                                        ``(II) in the case of retrofit
                                    applications under clause (ii), the
                                    treated portion of flue gas from the
                                    unit, measured on an annual basis,
                                    determined in accordance with section
                                    812(b)(2); or
                        ``(B) at an industrial source that--
                                ``(i) absent carbon capture and
                            sequestration, would emit greater than 50,000
                            tons per year of carbon dioxide;
                                ``(ii) upon implementation, will achieve an
                            emission limit that is at least a 50 percent
                            reduction in emissions of the carbon dioxide
                            produced by the emission point, measured on an
                            annual basis, determined in accordance with
                            section 812(b)(2); and
                                ``(iii) does not produce a liquid
                            transportation fuel from a solid fossil-based
                            feedstock;
                ``(2) geologically sequester carbon dioxide at a site that
            meets all applicable permitting and certification requirements
            for geologic sequestration, or, pursuant to such requirements
            as the Administrator may prescribe by regulation, convert
            captured carbon dioxide to a stable form that will safely and
            permanently sequester such carbon dioxide;
                ``(3) meet all other applicable State, tribal, and Federal
            permitting requirements; and
                ``(4) be located in the United States.
        ``(c) Phase I Distribution to Electric Generating Units.--
                ``(1) Application.--This subsection shall apply only to
            projects at the first 6 gigawatts of electric generating units,
            measured in cumulative generating capacity of such units, that
            receive allowances under this section.
                ``(2) Distribution.--The Administrator shall distribute
            emission allowances allocated under section 782(f) to the owner
            or operator of each eligible project at an electric generating
            unit in a quantity equal to the quotient obtained by dividing--
                        ``(A) the product obtained by multiplying--
                                ``(i) the number of metric tons of carbon
                            dioxide emissions avoided through capture and
                            sequestration of emissions by the project, as
                            determined pursuant to such methodology as the
                            Administrator shall prescribe by regulation;
                            and
                                ``(ii) a bonus allowance value, pursuant to
                            paragraph (3); by
                        ``(B) the average fair market value of an emission
                    allowance during the preceding year.
                ``(3) Bonus allowance values.--
                        ``(A) For a generating unit achieving the capture
                    and sequestration of 85 percent or more of the carbon
                    dioxide that otherwise would be emitted by such unit,
                    the bonus allowance value shall be $90 per ton.
                        ``(B) The Administrator shall by regulation
                    establish a bonus allowance value for each rate of
                    lower capture and sequestration achieved by a
                    generating unit, from a minimum of $50 per ton for a 50
                    percent rate and varying directly with increasing rates
                    of capture and sequestration up to $90 per ton for an
                    85 percent rate.
                        ``(C) For a generating unit that achieves the
                    capture and sequestration of at least 50 percent of the
                    carbon dioxide that otherwise would be emitted by such
                    unit by not later than January 1, 2017, the otherwise
                    applicable bonus allowance value under this paragraph
                    shall be increased by $10, provided that the owner of
                    such unit notifies the Administrator by not later than
                    January 1, 2012, of its intent to achieve such rate of
                    capture and sequestration.
                        ``(D) For a carbon capture and sequestration
                    project sequestering in a geological formation for
                    purposes of enhanced hydrocarbon recovery, the
                    Administrator shall, by regulation, reduce the
                    applicable bonus allowance value under this paragraph
                    to reflect the lower net cost of the project when
                    compared to sequestration into geological formations
                    solely for purposes of sequestration.
                        ``(E) The Administrator shall annually adjust for
                    inflation the bonus allowance values established under
                    this paragraph.
        ``(d) Phase II Distribution to Electric Generating Units.--
                ``(1) Application.--This subsection shall apply only to the
            distribution of emission allowances for carbon capture and
            sequestration projects at electric generating units after the
            capacity threshold identified in subsection (c)(1) is reached.
                ``(2) Regulations.--Not later than 2 years prior to the
            date on which the capacity threshold identified in subsection
            (c)(1) is projected to be reached, the Administrator shall
            promulgate regulations to govern the distribution of emission
            allowances to the owners or operators of eligible projects
            under this subsection.
                ``(3) Reverse auctions.--
                        ``(A) In general.--Except as provided in paragraph
                    (4), the regulations promulgated under paragraph (2)
                    shall provide for the distribution of emission
                    allowances to the owners or operators of eligible
                    projects under this subsection through reverse
                    auctions, which shall be held no less frequently than
                    once each calendar year. The Administrator may
                    establish a separate auction for each of no more than 5
                    different project categories, defined on the basis of
                    coal type, capture technology, geological formation
                    type, new unit versus retrofit application, such other
                    factors as the Administrator may prescribe, or any
                    combination thereof. The Administrator may establish
                    appropriate minimum rates of capture and sequestration
                    in implementing this paragraph.
                        ``(B) Auction process.--At each reverse auction--
                                ``(i) the Administrator shall solicit bids
                            from eligible projects;
                                ``(ii) eligible projects participating in
                            the auction shall submit a bid including the
                            desired level of carbon dioxide sequestration
                            incentive per ton and the estimated quantity of
                            carbon dioxide that the project will
                            permanently sequester over 10 years; and
                                ``(iii) the Administrator shall select
                            bids, within each auction, for the
                            sequestration amount submitted, beginning with
                            the eligible project submitting the bid for the
                            lowest level of sequestration incentive on a
                            per ton basis and meeting such other
                            requirements as the Administrator may specify,
                            until the amount of funds available for the
                            reverse auction is committed.
                        ``(C) Form of distribution.--The Administrator
                    shall distribute emission allowances to the owners or
                    operators of eligible projects selected through a
                    reverse auction under this paragraph pursuant to a
                    formula equivalent to that described in subsection
                    (c)(2), except that the bonus allowance value that is
                    bid by the entity shall be substituted for the bonus
                    allowance values set forth in subsection (c)(3).
                ``(4) Alternative distribution method.--
                        ``(A) In general.--If the Administrator determines
                    that reverse auctions would not provide for efficient
                    and cost-effective commercial deployment of carbon
                    capture and sequestration technologies, the
                    Administrator may instead, through regulations
                    promulgated under paragraph (2) or (5), prescribe a
                    schedule for the award of bonus allowances to the
                    owners or operators of eligible projects under this
                    subsection, in accordance with the requirements of this
                    paragraph.
                        ``(B) Multiple tranches.--The Administrator shall
                    divide emission allowances available for distribution
                    to the owners or operators of eligible projects into a
                    series of tranches, each supporting the deployment of a
                    specified quantity of cumulative electric generating
                    capacity utilizing carbon capture and sequestration
                    technology, each of which shall not be greater than 6
                    gigawatts.
                        ``(C) Method of distribution.--The Administrator
                    shall distribute emission allowances within each
                    tranche, on a first-come, first-served basis--
                                ``(i) based on the date of full-scale
                            operation of capture and sequestration
                            technology; and
                                ``(ii) pursuant to a formula, similar to
                            that set forth in subsection (c)(2) (except
                            that the Administrator shall prescribe bonus
                            allowance values different than those set forth
                            in subsection (c)(3)), establishing the number
                            of allowances to be distributed per ton of
                            carbon dioxide sequestered by the project.
                        ``(D) Requirements.--For each tranche established
                    pursuant to subparagraph (B), the Administrator shall
                    establish a schedule for distributing emission
                    allowances that--
                                ``(i) is based on a sliding scale that
                            provides higher bonus allowance values for
                            projects achieving higher rates of capture and
                            sequestration;
                                ``(ii) for each capture and sequestration
                            rate, establishes a bonus allowance value that
                            is lower than that established for such rate in
                            the previous tranche (or, in the case of the
                            first tranche, than that established for such
                            rate under subsection (c)(3)); and
                                ``(iii) may establish different bonus
                            allowance levels for no more than 5 different
                            project categories, defined by coal type,
                            capture technology, geological formation type,
                            new unit versus retrofit application, such
                            other factors as the Administrator may
                            prescribe, or any combination thereof.
                        ``(E) Criteria for establishing bonus allowance
                    values.--In setting bonus allowance values under this
                    paragraph, the Administrator shall seek to cover no
                    more than the reasonable incremental capital and
                    operating costs of a project that are attributable to
                    implementation of carbon capture, transportation, and
                    sequestration technologies, taking into account--
                                ``(i) the reduced cost of compliance with
                            section 722 of this Act;
                                ``(ii) the reduced cost associated with
                            sequestering in a geological formation for
                            purposes of enhanced hydrocarbon recovery when
                            compared to sequestration into geological
                            formations solely for purposes of
                            sequestration;
                                ``(iii) the relevant factors defining the
                            project category; and
                                ``(iv) such other factors as the
                            Administrator determines are appropriate.
                ``(5) Revision of regulations.--The Administrator shall
            review, and as appropriate revise, the applicable regulations
            under this subsection no less frequently than every 8 years.
        ``(e) Limits for Certain Electric Generating Units.--
                ``(1) Definitions.--For purposes of this subsection, the
            terms `covered EGU' and `initially permitted' shall have the
            meaning given those terms in section 812 of this Act.
                ``(2) Covered egus initially permitted from 2009 through
            2014.--For a covered EGU that is initially permitted on or
            after January 1, 2009, and before January 1, 2015, the
            Administrator shall reduce the quantity of emission allowances
            that the owner or operator of such covered EGU would otherwise
            be eligible to receive under this section as follows:
                        ``(A) In the case of a unit commencing operation on
                    or before January 1, 2019, if the date in clause
                    (ii)(I) is earlier than the date in clause (ii)(II), by
                    the product of--
                                ``(i) 20 percent; and
                                ``(ii) the number of years, if any, that
                            have elapsed between--
                                        ``(I) the earlier of January 1,
                                    2020, or the date that is 5 years after
                                    the commencement of operation of such
                                    covered EGU; and
                                        ``(II) the first year that such
                                    covered EGU achieves (and thereafter
                                    maintains) an emission limit that is at
                                    least a 50 percent reduction in
                                    emissions of the carbon dioxide
                                    produced by the unit, measured on an
                                    annual basis, as determined in
                                    accordance with section 812(b)(2).
                        ``(B) In the case of a unit commencing operation
                    after January 1, 2019, by the product of--
                                ``(i) 20 percent; and
                                ``(ii) the number of years between--
                                        ``(I) the commencement of operation
                                    of such covered EGU; and
                                        ``(II) the first year that such
                                    covered EGU achieves (and thereafter
                                    maintains) an emission limit that is at
                                    least a 50 percent reduction in
                                    emissions of the carbon dioxide
                                    produced by the unit, measured on an
                                    annual basis, as determined in
                                    accordance with section 812(b)(2).
                ``(3) Covered egus initially permitted from 2015 through
            2019.--The owner or operator of a covered EGU that is initially
            permitted on or after January 1, 2015, and before January 1,
            2020, shall be ineligible to receive emission allowances
            pursuant to this section if such unit, upon commencement of
            operations (and thereafter), does not achieve and maintain an
            emission limit that is at least a 50 percent reduction in
            emissions of the carbon dioxide produced by the unit, measured
            on an annual basis, as determined in accordance with section
            812(b)(2).
        ``(f) Industrial Sources.--
                ``(1) Allowances.--The Administrator may distribute not
            more than 15 percent of the allowances allocated under section
            782(f) for any vintage year to the owners or operators of
            eligible industrial sources to support the commercial-scale
            deployment of carbon capture and sequestration technologies at
            such sources.
                ``(2) Distribution.--The Administrator shall, by
            regulation, prescribe requirements for the distribution of
            emission allowances to the owners or operators of industrial
            sources under this subsection, based on a bonus allowance
            formula that awards allowances to qualifying projects on the
            basis of tons of carbon dioxide captured and permanently
            sequestered. The Administrator may provide for the distribution
            of emission allowances pursuant to--
                        ``(A) a reverse auction method, similar to that
                    described under subsection (d)(3), including the use of
                    separate auctions for different project categories; or
                        ``(B) an incentive schedule, similar to that
                    described under subsection (d)(4), which shall ensure
                    that incentives are set so as to satisfy the
                    requirement described in subsection (d)(4)(E).
                ``(3) Revision of regulations.--The Administrator shall
            review, and as appropriate revise, the applicable regulations
            under this subsection no less frequently than every 8 years.
        ``(g) Limitations.--Allowances may be distributed under this
    section only for tons of carbon dioxide emissions that have already
    been captured and sequestered. A qualifying project may receive annual
    emission allowances under this section only for the first 10 years of
    operation. No greater than 72 gigawatts of total cumulative generating
    capacity (including industrial applications, measured by such
    equivalent metric as the Administrator may designate) may receive
    emission allowances under this section. Upon reaching the limit
    described in the preceding sentence, any emission allowances that are
    allocated for carbon capture and sequestration deployment under section
    782(f) and are not yet obligated under this section shall be treated as
    allowances not designated for distribution for purposes of section
    782(r).
        ``(h) Exhaustion of Account and Annual Roll-over of Surplus
    Allowances.--
                ``(1) In distributing emission allowances under this
            section, the Administrator shall ensure that qualifying
            projects receiving allowances receive distributions for 10
            years.
                ``(2) If the Administrator determines that the emission
            allowances allocated under section 782(f) with a vintage year
            that matches the year of distribution will be exhausted once
            the estimated full 10-year distributions will be provided to
            current eligible participants, the Administrator shall provide
            to new eligible projects allowances from vintage years after
            the year of the distribution.
        ``(i) Retrofit Applications.--(1) In calculating bonus allowance
    values for retrofit applications eligible under subsection
    (b)(1)(A)(ii) and (iv)(II), the Administrator shall apply the required
    capture rates with respect to the treated portion of flue gas from the
    unit.
        ``(2) No additional projects shall be eligible for allowances under
    subsection (b)(1)(A)(ii) and (iv)(II) as of such time as the
    Administrator reports, pursuant to section 812(d), that carbon capture
    and sequestration retrofit projects at electric generating units that
    are eligible for allowances under this section have been applied, in
    the aggregate, to the flue gas generated by 1 gigawatt of total
    cumulative generating capacity. The limitation in the preceding
    sentence shall not apply to projects that meet the eligibility criteria
    in subsection (b)(1)(A)(iv)(I).
        ``(j) Davis-Bacon Compliance.--All laborers and mechanics employed
    on projects funded directly by or assisted in whole or in part by this
    section through the use of emission allowances shall be paid wages at
    rates not less than those prevailing on projects of a character similar
    in the locality as determined by the Secretary of Labor in accordance
    with subchapter IV, chapter 31, part A of subtitle II of title 40,
    United States Code. With respect to the labor standards specified in
    this subsection, the Secretary of Labor shall have the authority and
    functions set forth in Reorganization Plan Numbered 14 of 1950 (64
    Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States
    Code.''.

    SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED POWER PLANTS.

        (a) In General.--Title VIII of the Clean Air Act (as added by
    section 331 of this Act) is amended by adding the following new section
    after section 811:

    ``SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL-FIRED POWER PLANTS.

        ``(a) Definitions.--For purposes of this section:
                ``(1) Covered egu.--The term `covered EGU' means a utility
            unit that is required to have a permit under section 503(a) and
            is authorized under state or federal law to derive at least 30
            percent of its annual heat input from coal, petroleum coke, or
            any combination of these fuels.
                ``(2) Initially permitted.--The term `initially permitted'
            means that the owner or operator has received a Clean Air Act
            preconstruction approval or permit, for the covered EGU as a
            new (not a modified) source, but administrative review or
            appeal of such approval or permit has not been exhausted. A
            subsequent modification of any such approval or permits,
            ongoing administrative or court review, appeals, or challenges,
            or the existence or tolling of any time to pursue further
            review, appeals, or challenges shall not affect the date on
            which a covered EGU is considered to be initially permitted
            under this paragraph.
        ``(b) Standards.--(1) A covered EGU that is initially permitted on
    or after January 1, 2020, shall achieve an emission limit that is a 65
    percent reduction in emissions of the carbon dioxide  produced by the
    unit, as measured on an annual basis, or meet such more stringent
    standard as the Administrator may establish pursuant to subsection (c).
        ``(2) A covered EGU that is initially permitted after January 1,
    2009, and before January 1, 2020, shall, by the applicable compliance
    date established under this paragraph, achieve an emission limit that
    is a 50 percent reduction in emissions of the carbon dioxide produced
    by the  unit, as measured on an annual basis. Compliance with the
    requirement set forth in this paragraph shall be required by the
    earliest of the following:
                ``(A) Four years after the date the Administrator has
            published pursuant to subsection (d) a report that there are in
            commercial operation in the United States electric generating
            units or other stationary sources equipped with carbon capture
            and sequestration technology that, in the aggregate--
                        ``(i) have a total of at least 4 gigawatts of
                    nameplate generating capacity of which--
                                ``(I) at least 3 gigawatts must be electric
                            generating units; and
                                ``(II) up to 1 gigawatt may be industrial
                            applications, for which capture and
                            sequestration of 3 million tons of carbon
                            dioxide per year on an aggregate annualized
                            basis shall be considered equivalent to 1
                            gigawatt;
                        ``(ii) include at least 2 electric generating
                    units, each with a nameplate generating capacity of 250
                    megawatts or greater, that capture, inject, and
                    sequester carbon dioxide into geologic formations other
                    than oil and gas fields; and
                        ``(iii) are capturing and sequestering in the
                    aggregate at least 12 million tons of carbon dioxide
                    per year, calculated on an aggregate annualized basis.
                ``(B) January 1, 2025.
        ``(3) If the deadline for compliance with paragraph (2) is January
    1, 2025, the Administrator may extend the deadline for compliance by a
    covered EGU by up to 18 months if the Administrator makes a
    determination, based on a showing by the owner or operator of the unit,
    that it will be technically infeasible for the unit to meet the
    standard by the deadline. The owner or operator must submit a request
    for such an extension by no later than January 1, 2022, and the
    Administrator shall provide for public notice and comment on the
    extension request.
        ``(c) Review and Revision of Standards.--Not later than 2025 and at
    5-year intervals thereafter, the Administrator shall review the
    standards for new covered EGUs under this section and shall, by rule,
    reduce the maximum carbon dioxide emission rate for new covered EGUs to
    a rate which reflects the degree of emission limitation achievable
    through the application of the best system of emission reduction which
    (taking into account the cost of achieving such reduction and any
    nonair quality health and environmental impact and energy requirements)
    the Administrator determines has been adequately demonstrated.
        ``(d)  Reports.--Not later than the date 18 months after the date
    of enactment of this title and semiannually thereafter, the
    Administrator shall publish a report on the nameplate capacity of units
    (determined pursuant to subsection (b)(2)(A)) in commercial operation
    in the United States equipped with carbon capture and sequestration
    technology, including the information described in subsection (b)(2)(A)
    (including the cumulative generating capacity to which carbon capture
    and sequestration retrofit projects meeting the criteria described in
    section 786(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied and the
    quantities of carbon dioxide captured and sequestered by such
    projects).
        ``(e) Regulations.--Not later than 2 years after the date of
    enactment of this title, the Administrator shall promulgate regulations
    to carry out the requirements of this section.''.

                        Subtitle C--Clean Transportation

    SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE.

        (a) Amendment of PURPA.--Section 111(d) of the Public Utility
    Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by
    adding at the end the following:
                ``(20) Plug-in electric drive vehicle infrastructure.--
                        ``(A) Utility plan for infrastructure.--Each
                    electric utility shall develop a plan to support the
                    use of plug-in electric drive vehicles, including
                    heavy-duty hybrid electric vehicles. The plan may
                    provide for deployment of electrical charging stations
                    in public or private locations, including street
                    parking, parking garages, parking lots, homes, gas
                    stations, and highway rest stops. Any such plan may
                    also include--
                                ``(i) battery exchange, fast charging
                            infrastructure and other services;
                                ``(ii) triggers for infrastructure
                            deployment based upon market penetration of
                            plug-in electric drive vehicles; and
                                ``(iii) such other elements as the State
                            determines necessary to support plug-in
                            electric drive vehicles.
                    Each plan under this paragraph shall provide for the
                    deployment of the charging infrastructure or other
                    infrastructure necessary to adequately support the use
                    of plug-in electric drive vehicles.
                        ``(B) Support requirements.--Each State regulatory
                    authority (in the case of each electric utility for
                    which it has ratemaking authority) and each utility (in
                    the case of a nonregulated utility) shall--
                                ``(i) require that charging infrastructure
                            deployed is interoperable with products of all
                            auto manufacturers to the extent possible; and
                                ``(ii) consider adopting minimum
                            requirements for deployment of electrical
                            charging infrastructure and other appropriate
                            requirements necessary to support the use of
                            plug-in electric drive vehicles.
                        ``(C) Cost recovery.--Each State regulatory
                    authority (in the case of each electric utility for
                    which it has ratemaking authority) and each utility (in
                    the case of a nonregulated utility) shall consider
                    whether, and to what extent, to allow cost recovery for
                    plans and implementation of plans.
                        ``(D) Smart grid integration.--The State regulatory
                    authority (in the case of each electric utility for
                    which it has ratemaking authority) and each utility (in
                    the case of a nonregulated utility) shall, in
                    accordance with regulations issued by the Federal
                    Energy Regulatory Commission pursuant to section
                    1305(d) of the Energy Independence and Security Act of
                    2007--
                                ``(i) establish any appropriate protocols
                            and standards for integrating plug-in electric
                            drive vehicles into an electrical distribution
                            system, including Smart Grid systems and
                            devices as described in title XIII of the
                            Energy Independence and Security Act of 2007;
                                ``(ii) include, to the extent feasible, the
                            ability for each plug-in electric drive vehicle
                            to be identified individually and to be
                            associated with its owner's electric utility
                            account, regardless of the location that the
                            vehicle is plugged in, for purposes of
                            appropriate billing for any electricity
                            required to charge the vehicle's batteries as
                            well as any crediting for electricity provided
                            to the electric utility from the vehicle's
                            batteries; and
                                ``(iii) review the determination made in
                            response to section 1252 of the Energy Policy
                            Act of 2005 in light of this section, including
                            whether time-of-use pricing should be employed
                            to enable the use of plug-in electric drive
                            vehicles to contribute to meeting peak-load and
                            ancillary service power needs.''.
        (b) Compliance.--
                (1) Time limitations.--Section 112(b) of the Public Utility
            Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended
            by adding the following at the end thereof:
        ``(7)(A) Not later than 3 years after the date of enactment of this
    paragraph, each State regulatory authority (with respect to each
    electric utility for which it has ratemaking authority) and each
    nonregulated utility shall commence the consideration referred to in
    section 111, or set a hearing date for consideration, with respect to
    the standard established by paragraph (20) of section 111(d).
        ``(B) Not later than 4 years after the date of enactment of the
    this paragraph, each State regulatory authority (with respect to each
    electric utility for which it has ratemaking authority), and each
    nonregulated electric utility, shall complete the consideration, and
    shall make the determination, referred to in section 111 with respect
    to the standard established by paragraph (20) of section 111(d).''.
                (2) Failure to comply.--Section 112(c) of the Public
            Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is
            amended by adding the following at the end: ``In the case of
            the standards established by paragraph (20) of section 111(d),
            the reference contained in this subsection to the date of
            enactment of this Act shall be deemed to be a reference to the
            date of enactment of such paragraph.''.
                (3) Prior state actions.--Section 112(d) of the Public
            Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(d)) is
            amended by striking ``(19)'' and inserting ``(20)'' before ``of
            section 111(d)''.

    SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PROGRAM.

        (a) Deployment Program.--The Secretary of Energy shall establish a
    program to deploy and integrate plug-in electric drive vehicles into
    the electricity grid in multiple regions. In carrying out the program,
    the Secretary may provide financial assistance described under
    subsection (d), consistent with the goals under subsection (b). The
    Secretary shall select regions based upon applications for assistance
    received pursuant to subsection (c).
        (b) Goals.--The goals of the program established pursuant to
    subsection (a) shall be--
                (1) to demonstrate the viability of a vehicle-based
            transportation system that is not overly dependent on petroleum
            as a fuel and contributes to lower carbon emissions than a
            system based on conventional vehicles;
                (2) to facilitate the integration of advanced vehicle
            technologies into electricity distribution areas to improve
            system performance and reliability;
                (3) to demonstrate the potential benefits of coordinated
            investments in vehicle electrification on personal mobility and
            a regional grid;
                (4) to demonstrate protocols and standards that facilitate
            vehicle integration into the grid; and
                (5) to investigate differences in each region and
            regulatory environment regarding best practices in implementing
            vehicle electrification.
        (c) Applications.--Any State, Indian tribe, or local government (or
    group of State, Indian tribe, or local governments) may apply to the
    Secretary of Energy for financial assistance in furthering the regional
    deployment and integration into the electricity grid of plug-in
    electric drive vehicles. Such applications may be jointly sponsored by
    electric utilities, automobile manufacturers, technology providers, car
    sharing companies or organizations, or other persons or entities.
        (d) Use of Funds.--Pursuant to applications received under
    subsection (c), the Secretary may make financial assistance available
    to any applicant or joint sponsor of the application to be used for any
    of the following:
                (1) Assisting persons located in the regional deployment
            area, including fleet owners, in the purchase of new plug-in
            electric drive vehicles by offsetting in whole or in part the
            incremental cost of such vehicles above the cost of comparable
            conventionally fueled vehicles.
                (2) Supporting the use of plug-in electric drive vehicles
            by funding projects for the deployment of any of the following:
                        (A) Electrical charging infrastructure for plug-in
                    electric drive vehicles, including battery exchange,
                    fast charging infrastructure, and other services, in
                    public or private locations, including street parking,
                    parking garages, parking lots, homes, gas stations, and
                    highway rest stops.
                        (B) Smart Grid equipment and infrastructure, as
                    described in title XIII of the Energy Independence and
                    Security Act of 2007, to facilitate the charging and
                    integration of plug-in electric drive vehicles.
                (3) Such other projects as the Secretary determines
            appropriate to support the large-scale deployment of plug-in
            electric drive vehicles in regional deployment areas.
        (e) Program Requirements.--The Secretary, in consultation with the
    Administrator and the Secretary of Transportation, shall determine
    design elements and requirements of the program established pursuant to
    subsection (a), including--
                (1) the type of financial mechanism with which to provide
            financial assistance;
                (2) criteria for evaluating applications submitted under
            subsection (c), including the anticipated ability to promote
            deployment and market penetration of vehicles that are less
            dependent on petroleum as a fuel source; and
                (3) reporting requirements for entities that receive
            financial assistance under this section, including a
            comprehensive set of performance data characterizing the
            results of the deployment program.
        (f) Information Clearinghouse.--The Secretary shall, as part of the
    program established pursuant to subsection (a), collect and make
    available to the public information regarding the cost, performance,
    and other technical data regarding the deployment and integration of
    plug-in electric drive vehicles.
        (g) Authorization.--There are authorized to be appropriated to
    carry out this section such sums as may be necessary.

    SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFACTURING.

        (a) Vehicle Manufacturing Assistance Program.--The Secretary of
    Energy shall establish a program to provide financial assistance to
    automobile manufacturers to facilitate the manufacture of plug-in
    electric drive vehicles, as defined in section 131(a)(5) of the Energy
    Independence and Security Act of 2007, that are developed and produced
    in the United States.
        (b) Financial Assistance.--The Secretary of Energy may provide
    financial assistance to an automobile manufacturer under the program
    established pursuant to subsection (a) for the reconstruction or
    retooling of facilities for the manufacture of plug-in electric drive
    vehicles or batteries for such vehicles that are developed and produced
    in the United States.
        (c) Coordination With Regional Deployment.--The Secretary may
    provide financial assistance under subsection (b) in conjunction with
    the award of financial assistance under the large scale vehicle
    electrification program established pursuant to section 122 of this
    Act.
        (d) Program Requirements.--The Secretary shall determine design
    elements and requirements of the program established pursuant to
    subsection (a), including--
                (1) the type of financial mechanism with which to provide
            financial assistance;
                (2) criteria, in addition to the criteria described under
            subsection (e), for evaluating applications for financial
            assistance; and
                (3) reporting requirements for automobile manufacturers
            that receive financial assistance under this section.
        (e) Criteria.--In selecting recipients of financial assistance from
    among applicant automobile manufacturers, the Secretary shall give
    preference to proposals that--
                (1) are most likely to be successful; and
                (2) are located in local markets that have the greatest
            need for the facility.
        (f) Reports.--The Secretary shall annually submit to Congress a
    report on the program established pursuant to this section.
        (g) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    SEC. 124. INVESTMENT IN CLEAN VEHICLES.

        (a) Definitions.--In this section:
                (1) Advanced technology vehicles and qualifying
            components.--The terms ``advanced technology vehicles'' and
            ``qualifying components'' shall have the definition of such
            terms in section 136 of the Energy Independence and Security
            Act of 2007, except that for purposes of this section, the
            average base year as described in such section 136(a)(1)(C)
            shall be the following:
                        (A) In each of the years 2012 through 2016, model
                    year 2009.
                        (B) In 2017, the Administrator shall,
                    notwithstanding such section 136(a)(1)(C), determine an
                    appropriate baseline based on technological and
                    economic feasibility.
                (2) Plug-in electric drive vehicle.--The term ``plug-in
            electric drive vehicle'' shall have the definition of such term
            in section 131 of the Energy Independence and Security Act of
            2007.
        (b) Distribution of Allowances.--The Administrator shall, in
    accordance with this section, distribute emission allowances allocated
    pursuant to section 782(i) of the Clean Air Act not later than
    September 30 of 2012 and each calendar year thereafter through 2025.
        (c) Plug-in Electric Drive Vehicle Manufacturing and Deployment.--
                (1) In general.--The Administrator shall, at the direction
            of the Secretary of Energy, provide emission allowances
            allocated pursuant to section 782(i) to applicants, joint
            sponsors and automobile manufacturers pursuant to sections 122
            and 123 of this Act.
                (2) Annual amount.--In each of the years 2012 through 2017,
            one-quarter of the portion of the emission allowances allocated
            pursuant to section 782(i) of the Clean Air Act shall be
            available to carry out paragraph (1) such that--
                        (A) one-eighth of the portion shall be available to
                    carry out section 122; and
                        (B) one-eighth of the portion shall be available to
                    carry out section 123.
                (3) Preference.--In directing the provision of emission
            allowances under this subsection to carry out section 122, the
            Secretary shall give preference to applications under section
            122(c) that are jointly sponsored by one or more automobile
            manufacturers.
                (4) Multi-year commitments.--The Administrator shall commit
            to providing emission allowances to an applicant, joint
            sponsor, or automobile manufacturer for up to five consecutive
            years if--
                        (A) an application under section 122 or 123 of this
                    Act requests a multi-year commitment;
                        (B) such application meets the criteria for support
                    established by the Secretary of Energy under section
                    122 or 123 of this Act;
                        (C) the Administrator confirms to the Secretary
                    that emission allowances will be available for a multi-
                    year commitment;
                        (D) the Secretary of Energy determines that a
                    multi-year commitment for such application will advance
                    the goals of section 122 or 123; and
                        (E) the Secretary of Energy directs the
                    Administrator to make a multi-year commitment.
                (5) Insufficient applications.--If, in any year, emission
            allowances available under paragraph (2) cannot be provided
            because of insufficient numbers of submitted applications that
            meet the criteria for support established by the Secretary of
            Energy under section 122 or 123 of this Act, the remaining
            emission allowances shall be distributed according to
            subsection (d).
        (d) Advanced Technology Vehicles.--
                (1) In general.--The Administrator shall, at the direction
            of the Secretary of Energy, provide any emission allowances
            allocated pursuant to section 782(i) of the Clean Air Act that
            are not provided under subsection (c) to automobile
            manufacturers and component suppliers to pay not more than 30
            percent of the cost of--
                        (A) reequipping, expanding, or establishing a
                    manufacturing facility in the United States to
                    produce--
                                (i) qualifying advanced technology
                            vehicles; or
                                (ii) qualifying components; and
                        (B) engineering integration performed in the United
                    States of qualifying vehicles and qualifying
                    components.
                (2) Preference.--In directing the provision of emission
            allowances under this subsection during the years 2012 through
            2017, the Secretary shall give preference to applications for
            projects that save the maximum number of gallons of fuel.

    SEC. 125. ADVANCED TECHNOLOGY VEHICLE MANUFACTURING INCENTIVE LOANS.

        Section 136(d)(1) of the Energy Independence and Security Act of
    2007 (42 U.S.C. 17013(d)(1)) is amended by striking ``$25,000,000,000''
    and inserting ``$50,000,000,000''.

    SEC. 126. DEFINITION OF RENEWABLE BIOMASS.

        (a) In General.--Section 211(o)(1)(I) of the Clean Air Act (42
    U.S.C. 7545(o)(1)(I)) is amended to read as follows:
                        ``(I) Renewable biomass.--The term `renewable
                    biomass' means any of the following:
                                ``(i) Materials, pre-commercial thinnings,
                            or removed invasive species from National
                            Forest System land and public lands (as defined
                            in section 103 of the Federal Land Policy and
                            Management Act of 1976 (43 U.S.C. 1702)),
                            including those that are byproducts of
                            preventive treatments (such as trees, wood,
                            brush, thinnings, chips, and slash), that are
                            removed as part of a federally recognized
                            timber sale, or that are removed to reduce
                            hazardous fuels, to reduce or contain disease
                            or insect infestation, or to restore ecosystem
                            health, and that are--
                                        ``(I) not from components of the
                                    National Wilderness Preservation
                                    System, Wilderness Study Areas,
                                    Inventoried Roadless Areas, old growth
                                    stands, late-successional stands
                                    (except for dead, severely damaged, or
                                    badly infested trees), components of
                                    the National Landscape Conservation
                                    System, National Monuments, National
                                    Conservation Areas, Designated
                                    Primitive Areas, or Wild and Scenic
                                    Rivers corridors;
                                        ``(II) harvested in environmentally
                                    sustainable quantities, as determined
                                    by the appropriate Federal land
                                    manager; and
                                        ``(III) harvested in accordance
                                    with Federal and State law, and
                                    applicable land management plans.
                                ``(ii) Any organic matter that is available
                            on a renewable or recurring basis from non-
                            Federal land or land belonging to an Indian or
                            Indian tribe that is held in trust by the
                            United States or subject to a restriction
                            against alienation imposed by the United
                            States, including--
                                        ``(I) renewable plant material,
                                    including--
                                                ``(aa) feed grains;
                                                ``(bb) other agricultural
                                            commodities;
                                                ``(cc) other plants and
                                            trees; and
                                                ``(dd) algae; and
                                        ``(II) waste material, including--
                                                ``(aa) crop residue;
                                                ``(bb) other vegetative
                                            waste material (including wood
                                            waste and wood residues);
                                                ``(cc) animal waste and
                                            byproducts (including fats,
                                            oils, greases, and manure);
                                                ``(dd) construction waste;
                                                ``(ee) food waste and yard
                                            waste; and
                                                ``(ff) the non-fossil
                                            biogenic portion of municipal
                                            solid waste and construction,
                                            demolition, and disaster
                                            debris.
                                ``(iii) Residues and byproducts from wood,
                            pulp, or paper products facilities.''.
        (b) Reduction.--The last sentence of section 211(o)(7)(D) of the
    Clean Air Act (42 U.S.C. 7545(o)(7)(D)) is amended to read as follows:
    ``For any calendar year in which the Administrator makes such a
    reduction, the Administrator shall also reduce the applicable volume of
    renewable fuel and advanced biofuels requirement established under
    paragraph (2)(B) by the same volume.''.

    SEC. 127. OPEN FUEL STANDARD.

        (a) Findings.--The Congress finds that--
                (1) the status of oil as a strategic commodity, which
            derives from its domination of the transportation sector,
            presents a clear and present danger to the United States;
                (2) in a prior era, when salt was a strategic commodity,
            salt mines conferred national power and wars were fought over
            the control of such mines;
                (3) technology, in the form of electricity and
            refrigeration, decisively ended salt's monopoly of meat
            preservation and greatly reduced its strategic importance;
                (4) fuel competition and consumer choice would similarly
            serve to end oil's monopoly in the transportation sector and
            strip oil of its strategic status;
                (5) the current closed fuel market has allowed a cartel of
            petroleum exporting countries to inflate fuel prices,
            effectively imposing a harmful tax on the economy of the United
            States;
                (6) much of the inflated petroleum revenues the oil cartel
            earns at the expense of the people of the United States are
            used for purposes antithetical to the interests of the United
            States and its allies;
                (7) alcohol fuels, including ethanol and methanol, could
            potentially provide significant supplies of additional fuels
            that could be produced in the United States and in many other
            countries in the Western Hemisphere that are friendly to the
            United States;
                (8) alcohol fuels can only play a major role in securing
            the energy independence of the United States if a substantial
            portion of vehicles in the United States are capable of
            operating on such fuels;
                (9) it is not in the best interest of United States
            consumers or the United States Government to be constrained to
            depend solely upon petroleum resources for vehicle fuels if
            alcohol fuels are potentially available;
                (10) existing technology, in the form of flexible fuel
            vehicles, allows internal combustion engine cars and trucks to
            be produced at little or no additional cost, which are capable
            of operating on conventional gasoline, alcohol fuels, or any
            combination of such fuels, as availability or cost advantage
            dictates, providing a platform on which fuels can compete;
                (11) the necessary distribution system for such alcohol
            fuels will not be developed in the United States until a
            substantial fraction of the vehicles in the United States are
            capable of operating on such fuels;
                (12) the establishment of such a vehicle fleet and
            distribution system would provide a large market that would
            mobilize private resources to substantially advance the
            technology and expand the production of alcohol fuels in the
            United States and abroad;
                (13) the United States has an urgent national security
            interest to develop alcohol fuels technology, production, and
            distribution systems as rapidly as possible;
                (14) new cars sold in the United States that are equipped
            with an internal combustion engine should allow for fuel
            competition by being flexible fuel vehicles, and new diesel
            cars should be capable of operating on biodiesel; and
                (15) such an open fuel standard would help to protect the
            United States economy from high and volatile oil prices and
            from the threats caused by global instability, terrorism, and
            natural disaster.
        (b) Open Fuel Standard for Transportation.--(1) Chapter 329 of
    title 49, United States Code, is amended by adding at the end the
    following:
    ``Sec. 32920. Open fuel standard for transportation
        ``(a) Definitions.--In this section:
                ``(1) E85.--The term `E85' means a fuel mixture containing
            85 percent ethanol and 15 percent gasoline by volume.
                ``(2) Flexible fuel automobile.--The term `flexible fuel
            automobile' means an automobile that has been warranted by its
            manufacturer to operate on gasoline, E85, and M85.
                ``(3) Fuel choice-enabling automobile.--The term `fuel
            choice-enabling automobile' means--
                        ``(A) a flexible fuel automobile; or
                        ``(B) an automobile that has been warranted by its
                    manufacturer to operate on biodiesel.
                ``(4) Light-duty automobile.--The term `light-duty
            automobile' means--
                        ``(A) a passenger automobile; or
                        ``(B) a non-passenger automobile.
                ``(5) Light-duty automobile manufacturer's annual covered
            inventory.--The term `light-duty automobile manufacturer's
            annual covered inventory' means the number of light-duty
            automobiles powered by an internal combustion engine that a
            manufacturer, during a given calendar year, manufactures in the
            United States or imports from outside of the United States for
            sale in the United States.
                ``(6) M85.--The term `M85' means a fuel mixture containing
            85 percent methanol and 15 percent gasoline by volume.
        ``(b) Open Fuel Standard for Transportation.--
                ``(1) In general.--The Secretary may promulgate regulations
            to require each light-duty automobile manufacturer's annual
            covered inventory to be comprised of a minimum percentage of
            fuel-choice enabling automobiles, with sufficient lead time, if
            the Secretary, in coordination with the Secretary of Energy and
            the Administrator of the Environmental Protection Agency,
            determines such requirement is a cost-effective way to achieve
            the Nation's energy independence and environmental objectives.
            The cost-effective determination shall consider the future
            availability of both alternative fuel supply and infrastructure
            to deliver the alternative fuel to the fuel-choice enabling
            vehicles.
                ``(2) Temporary exemption from requirements.--
                        ``(A) Application.--A manufacturer may request an
                    exemption from the requirement described in paragraph
                    (1) by submitting an application to the Secretary, at
                    such time, in such manner, and containing such
                    information as the Secretary may require by regulation.
                    Each such application shall specify the models, lines,
                    and types of automobiles affected.
                        ``(B) Evaluation.--After evaluating an application
                    received from a manufacturer, the Secretary may at any
                    time, under such terms and conditions, and to such
                    extent as the Secretary considers appropriate,
                    temporarily exempt, or renew the exemption of, a light-
                    duty automobile from the requirement described in
                    paragraph (1) if the Secretary determines that
                    unavoidable events not under the control of the
                    manufacturer prevent the manufacturer of such
                    automobile from meeting its required production volume
                    of fuel choice-enabling automobiles, including--
                                ``(i) a disruption in the supply of any
                            component required for compliance with the
                            regulations;
                                ``(ii) a disruption in the use and
                            installation by the manufacturer of such
                            component; or
                                ``(iii) application to plug-in electric
                            drive vehicles causing such vehicles to fail to
                            meet State air quality requirements.
                        ``(C) Consolidation.--The Secretary may consolidate
                    applications received from multiple manufacturers under
                    subparagraph (A) if they are of a similar nature.
                        ``(D) Conditions.--Any exemption granted under
                    subparagraph (B) shall be conditioned upon the
                    manufacturer's commitment to recall the exempted
                    automobiles for installation of the omitted components
                    within a reasonable time proposed by the manufacturer
                    and approved by the Secretary after such components
                    become available in sufficient quantities to satisfy
                    both anticipated production and recall volume
                    requirements.
                        ``(E) Notice.--The Secretary shall publish in the
                    Federal Register--
                                ``(i) notice of each application received
                            from a manufacturer;
                                ``(ii) notice of each decision to grant or
                            deny a temporary exemption; and
                                ``(iii) the reasons for granting or denying
                            such exemptions.''.
        (2) The table of contents in chapter 329 of such title is amended
    adding at the end the following:

    ``32920. Open fuel standard for transportation.''.

    SEC. 128. DIESEL EMISSIONS REDUCTION.

        Subtitle G of title VII of the Energy Policy Act of 2005 (42 U.S.C.
    16131 et seq.) is amended--
                (1) in the matter preceding clause (i) in section
            791(3)(B), by inserting ``in any State'' after ``nonprofit
            organization or institution'';
                (2) in section 791(9), by striking ``The term `State'
            includes the District of Columbia.'' and inserting ``The term
            `State' includes the District of Columbia, American Samoa,
            Guam, the Commonwealth of the Northern Mariana Islands, Puerto
            Rico, and the Virgin Islands.'';
                (3) in section 793(c)--
                        (A) in paragraph (2)(A), by striking ``51 States''
                    and inserting ``56 States'';
                        (B) in paragraph (2)(A), by striking ``1.96
                    percent'' and inserting ``1.785 percent'';
                        (C) in paragraph (2)(B), by striking ``51 States''
                    and inserting ``56 States''; and
                        (D) in paragraph (2)(B), by amending clause (ii) to
                    read as follows:
                                ``(ii) the amount of funds remaining after
                            each State described in paragraph (1) receives
                            the 1.785-percent allocation under this
                            paragraph.''; and
                (4) in section 797, by striking ``2011'' and inserting
            ``2016''.

    SEC. 129. LOAN GUARANTEES FOR PROJECTS TO CONSTRUCT RENEWABLE FUEL
                  PIPELINES.

        (a) Definitions.--Section 1701 of the Energy Policy Act of 2005 (42
    U.S.C. 16511) is amended by adding at the end the following:
                ``(6) Renewable fuel.--The term `renewable fuel' has the
            meaning given the term in section 211(o)(1) of the Clean Air
            Act (42 U.S.C. 7545(o)(1)), except that the term shall include
            all ethanol and biodiesel.
                ``(7) Renewable fuel pipeline.--The term `renewable fuel
            pipeline' means a common carrier pipeline for transporting
            renewable fuel.''.
        (b) Renewable Fuel Pipeline Eligibility.--Section 1703(b) the
    Energy Policy Act of 2005 (42 U.S.C. 16513) is amended by adding at the
    end the following:
                ``(11) Renewable fuel pipelines.''.

    SEC. 130. FLEET VEHICLES.

        Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is
    amended as follows:
                (1) By adding the following new paragraph at the end of
            subsection (a):
                ``(6) Repowered or converted alternative fueled vehicles.--
            As used in this paragraph, the term `repowered or converted
            alternative fueled vehicle' includes light-, medium- or heavy-
            duty motor vehicles that have been modified with an EPA or CARB
            compliant engine or vehicle or aftermarket system so that the
            vehicle or engine is capable of operating on an alternative
            fuel.''.
                (2) By adding the following new paragraph at the end of
            subsection (b):
                ``(3) Repowered or converted vehicles. Not later than
            January 1, 2010, the Secretary shall allocate credits to fleets
            that repower or convert an existing vehicle so that it is
            capable of operating on an alternative fuel. In the case of any
            medium- or heavy-duty vehicle that is repowered or converted so
            that it is capable of operating on an alternative fuel, the
            Secretary shall allocate additional credits for such vehicles
            if he determines that such vehicles displace more petroleum
            than light duty alternative fueled vehicles. Such rules shall
            also include a requirement that such vehicles remain in the
            fleet for a period of no less than 2 years in order to continue
            to qualify for credit. The Secretary also shall extend the
            flexibility afforded in this paragraph to Federal fleets
            subject to the purchase provisions contained in section 303 of
            this Act.''.

    SEC. 130A. REPORT ON NATURAL GAS VEHICLE EMISSIONS REDUCTIONS.

        Within 360 days after the date of enactment of this Act, the
    Administrator, in consultation with the Secretaries of Energy and
    Transportation, and the Administrator of the General Services
    Administration, and after an examination of available scientific
    studies or analysis, shall submit to the Congress a report on--
                (1) the contribution that light and heavy duty natural gas
            vehicles, by category and State, have made during the last
            decade to the reduction of greenhouse gases and criteria
            pollutants under the Clean Air Act, and the reduced consumption
            of petroleum-based fuels;
                (2) the contribution that light and heavy duty natural gas
            vehicles are expected to make from 2010 to 2020 in reducing
            greenhouse gas and criteria pollutants under the Clean Air Act
            based, among other things, on additional Federal incentives for
            the manufacture and deployment of natural gas vehicles provided
            in this Act, and other Federal legislation; and
                (3) additional Federal measures, including legislation,
            that could, if implemented, maximize the potential for natural
            gas used in both stationary and mobile sources to contribute to
            the reduction of greenhouse gases and criteria pollutants under
            the Clean Air Act.

         Subtitle D--State Energy and Environment Development Accounts

    SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS.

        (a) Definitions.--In this section:
                (1) SEED account.--The term ``SEED Account'' means a State
            Energy and Environment Development Account established pursuant
            to this section.
                (2) State energy office.--The term ``State Energy Office''
            means a State entity eligible for grants under part D of title
            III of the Energy Policy and Conservation Act (42 U.S.C. 6321
            et seq.).
        (b) Establishment of Program.--The Administrator shall establish a
    program under which a State, through its State Energy Office or other
    State agency designated by the State, may operate a State Energy and
    Environment Development Account.
        (c) Purpose.--The purpose of each SEED Account is to serve as a
    common State-level repository for managing and accounting for emission
    allowances provided to States designated for renewable energy and
    energy efficiency purposes.
        (d) Regulations.--Not later than 1 year after the date of enactment
    of this Act, the Administrator shall promulgate regulations to carry
    out this section, including regulations--
                (1) to ensure that each State operates its SEED Account and
            any subaccounts thereof efficiently and in accordance with this
            Act and applicable State and Federal laws;
                (2) to prevent waste, fraud, and abuse;
                (3) to indicate the emission allowances that may be
            deposited in a State's SEED Account pending distribution or
            use;
                (4) to indicate the programs and objectives authorized by
            Federal law for which emission allowances in a SEED Account may
            be distributed or used;
                (5) to identify the forms of financial assistance and
            incentives that States may provide through distribution or use
            of SEED Accounts; and
                (6) to prescribe the form and content of reports that the
            States are required to submit under this section on the use of
            SEED Accounts.
        (e) Operation.--
                (1) Deposits.--
                        (A) In general.--In the allowance tracking system
                    established pursuant to section 724(d) of the Clean Air
                    Act, the Administrator shall establish a SEED Account
                    for each State and place in it the allowances allocated
                    pursuant to section 782(g) of the Clean Air Act to be
                    distributed to States pursuant to sections 132 and 201
                    of this Act.
                        (B) Financial account.--A State may create a
                    financial account associated with its SEED Account to
                    deposit, retain, and manage any proceeds of any sale of
                    any allowance provided pursuant to this Act pending
                    expenditure or disbursement of those proceeds for
                    purposes permitted under this section. The funds in
                    such an account shall not be commingled with other
                    funds not derived from the sale of allowances provided
                    to the State; however, loans made by the State from
                    such funds pursuant to paragraph (2)(C)(i) may be
                    repaid into such a financial account, including any
                    interest charged.
                (2) Withdrawals.--
                        (A) In general.--All allowances distributed
                    pursuant to sections 132 and 201, including the
                    proceeds of any sale of such allowances, shall support
                    renewable energy and energy efficiency programs
                    authorized or approved by the Federal Government.
                        (B) Dedicated allowances.--Allowances distributed
                    pursuant to sections 132 and 201 that are required by
                    law to be used for specific purposes for a specified
                    period shall be used according to those requirements
                    during that period.
                        (C) Undedicated allowances.--To the extent that
                    allowances distributed pursuant to sections 132 and 201
                    are not required by law to be used for specific
                    purposes for a specified period as described in
                    subparagraph (B), such allowances or the proceeds of
                    their sale may be used for any of the following
                    purposes:
                                (i) Loans.--Loans of allowances, or the
                            proceeds from the sale of allowances, may be
                            provided, interest on commercial loans may be
                            subsidized at an interest rate as low as zero,
                            and other credit support may be provided to
                            support programs authorized to use SEED Account
                            allowance value or any other renewable energy
                            or energy efficiency purpose authorized or
                            approved by the Federal Government.
                                (ii) Grants.--Grants of allowances or the
                            proceeds of their sale may be provided to
                            support programs authorized to use SEED Account
                            allowance value or any other renewable energy
                            or energy efficiency purpose authorized or
                            approved by the Federal Government.
                                (iii) Other forms of support.--Allowances
                            or the proceeds of the sale of allowances may
                            be provided for other forms of support for
                            programs authorized to use SEED Account
                            allowance value or any other renewable energy
                            or energy efficiency purpose authorized or
                            approved by the Federal Government.
                                (iv) Administrative costs.--Except to the
                            extent provided in Federal law authorizing or
                            allocating allowances deposited in a SEED
                            Account, not more than 5 percent of the
                            allowance value in a SEED Account in any year
                            may be used to cover administrative expenses of
                            the SEED Account.
                        (D) Subaccounts.--A State may request that the
                    Administrator establish accounts for local governments
                    that request such subaccounts to hold allowances
                    distributed to local governments for renewable energy
                    or energy efficiency programs authorized or approved by
                    the Federal Government.
                        (E) Intended use plans.--
                                (i) In general.--After providing for public
                            review and comment, each State administering a
                            SEED Account shall annually prepare a plan that
                            identifies the intended uses of the allowances
                            or proceeds from the sale of allowances in its
                            SEED Account.
                                (ii) Contents.--An intended use plan shall
                            include--
                                        (I) a list of the projects or
                                    programs for which withdrawals from the
                                    SEED Account are intended in the next
                                    fiscal year that begins after the date
                                    of the plan, including a description of
                                    each project;
                                        (II) the relationship of each of
                                    the projects or programs to an
                                    identified Federal purpose authorized
                                    by this Act, or any other Federal
                                    statute;
                                        (III) the expected terms of use of
                                    allowance value to provide assistance;
                                        (IV) the criteria and methods
                                    established for the distribution of
                                    allowances or allowance value;
                                        (V) a description of the equivalent
                                    financial value and status of the SEED
                                    Account; and
                                        (VI) a statement of the mid-term
                                    and long-term goals of the State for
                                    use of its SEED Account.
                (3) Accountability and transparency.--
                        (A) Controls and procedures.--Any State that has a
                    SEED Account shall establish fiscal controls and
                    recordkeeping and accounting procedures for the SEED
                    Account sufficient to ensure proper accounting during
                    appropriate accounting periods for distributions into
                    the SEED Account, transfers from the SEED Account, and
                    SEED Account balances, including any related financial
                    accounts. Such controls and procedures shall conform to
                    generally accepted government accounting principles.
                    Any State that has a SEED Account shall retain records
                    for a period of at least 5 years.
                        (B) Audits.--Any State that has a SEED Account
                    shall have an annual audit conducted of the SEED
                    Account by an independent public accountant in
                    accordance with generally accepted auditing standards,
                    and shall transmit the results of that audit to the
                    Administrator.
                        (C) State report.--Each State administering a SEED
                    Account shall make publicly available and submit to the
                    Administrator a report every 2 years on its activities
                    related to its SEED Account.
                        (D) Public information.--Any--
                                (i) controls and procedures established
                            under subparagraph (A); and
                                (ii) information obtained through audits
                            conducted under subparagraph (B), except to the
                            extent that it would be protected from
                            disclosure, if it were information held by the
                            Federal Government, under section 552(b) of
                            title 5, United States Code,
                    shall be made publicly available.
                        (E) Other protections.--The Administrator shall
                    require such additional procedures and protections as
                    are necessary to ensure that any State that has a SEED
                    Account will operate the SEED Account in an accountable
                    and transparent manner.
        (f) Requirements for Eligibility.--A State's eligibility to receive
    allowances in its SEED Account shall depend on that State's compliance
    with the requirements of this Act (and the amendments made by this
    Act).
        (g) Authorization of Appropriations.--There are authorized to be
    appropriated to the Administrator such sums as may be necessary for
    SEED Account operations.

    SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND ENERGY EFFICIENCY
                  PROGRAMS.

        (a) Definitions.--For purposes of this section:
                (1) Allowance.--The term ``allowance'' means an emission
            allowance established under section 721 of the Clean Air Act
            (as added by section 311 of this Act).
                (2) Cost-effective.--The term ``cost-effective'', with
            respect to an energy efficiency program, means that the program
            meets the Total Resource Cost Test, which requires that the net
            present value of economic benefits over the life of the program
            or measure, including avoided supply and delivery costs and
            deferred or avoided investments, is greater than the net
            present value of the economic costs over the life of the
            program, including program costs and incremental costs borne by
            the energy consumer.
                (3) Renewable energy resource.--The term ``renewable energy
            resource'' shall have the meaning given that term in section
            610 of the Public Utility Regulatory Policies Act of 1978 (as
            added by section 101 of this Act).
                (4) Vintage year.--The term ``vintage year'' shall the
            meaning given that term in section 700 of the Clean Air Act (as
            added by section 311 of this Act).
        (b) Distribution Among States.--Not later than September 30 of each
    calendar year from 2011 through 2049, the Administrator shall, in
    accordance with this section, distribute allowances allocated pursuant
    to section 782(g)(1) of the Clean Air Act (as added by section 311 of
    this Act) for the following vintage year. The Administrator shall
    distribute 0.5 percent of such allowances pursuant to section 133 of
    this Act. The Administrator shall distribute the remaining allowances
    to States for renewable energy and energy efficiency programs to be
    deposited in and administered through the State Energy and Environment
    Development (SEED) Accounts established pursuant to section 131. The
    Administrator shall distribute allowances among the States under this
    section each year in accordance with the following formula:
                (1) One third of the allowances shall be divided equally
            among the States.
                (2) One third of the allowances shall be distributed
            ratably among the States based on the population of each State,
            as contained in the most recent reliable census data available
            from the Bureau of the Census, Department of Commerce, for all
            States at the time the Administrator calculates the formula for
            distribution.
                (3) One third of the allowances for shall be distributed
            ratably among the States on the basis of the energy consumption
            of each State as contained in the most recent State Energy Data
            Report available from the Energy Information Administration (or
            such alternative reliable source as the Administrator may
            designate).
        (c) Uses.--The allowances distributed to each State pursuant to
    this section shall be used exclusively in accordance with the following
    requirements:
                (1) Not less than 12.5 percent shall be distributed by the
            State to units of local government within such State to be used
            exclusively to support the energy efficiency and renewable
            energy purposes listed in paragraphs (2) and (3).
                (2) Not less than 20 percent shall be used exclusively for
            the following energy efficiency purposes, provided that not
            less than 1 percent shall be used for the purpose described in
            subparagraph (D) and not less than 5.5 percent shall be used
            for the purpose described in subparagraph (E):
                        (A) Implementation and enforcement of building
                    codes adopted in compliance with section 201.
                        (B) Implementation of the energy efficient
                    manufactured homes program established pursuant to
                    section 203.
                        (C) Implementation of the building energy
                    performance labeling program established pursuant to
                    section 204.
                        (D) Low-income community energy efficiency programs
                    that are consistent with the grant program established
                    under section 264 of this Act.
                        (E) Implementation of the Retrofit for Energy and
                    Environmental Performance (REEP) program established
                    pursuant to section 202.
                (3) Not less than 20 percent shall be used exclusively for
            capital grants, tax credits, production incentives, loans, loan
            guarantees, forgivable loans, direct provision of allowances,
            and interest rate buy-downs for--
                        (A) re-equipping, expanding, or establishing a
                    manufacturing facility that receives certification from
                    the Secretary of Energy pursuant to section 1302 of the
                    American Recovery and Reinvestment Act of 2009 for the
                    production of--
                                (i) property designed to be used to produce
                            energy from renewable energy sources; and
                                (ii) electricity storage systems;
                        (B) deployment of technologies to generate
                    electricity from renewable energy sources; and
                        (C) deployment of facilities or equipment, such as
                    solar panels, to generate electricity or thermal energy
                    from renewable energy resources in and on buildings in
                    an urban environment.
                (4) The remaining 47.5 percent shall be used exclusively
            for any of the following purposes:
                        (A) Energy efficiency purposes described in
                    paragraph (2).
                        (B) Renewable energy purposes described in
                    paragraph (3)(B) and (C).
                        (C) Cost-effective energy efficiency programs for
                    end-use consumers of electricity, natural gas, home
                    heating oil, or propane, including, where appropriate,
                    programs or mechanisms administered by local
                    governments and entities other than the State.
                        (D) Enabling the development of a Smart Grid (as
                    described in section 1301 of the Energy Independence
                    and Security Act of 2007 (42 U.S.C. 17381)) for State,
                    local government, and other public buildings and
                    facilities, including integration of renewable energy
                    resources and distributed generation, demand response,
                    demand side management, and systems analysis.
                        (E) Providing the non-Federal share of support for
                    surface transportation capital projects under--
                                (i) sections 5307, 5308, 5309, 5310, 5311
                            and 5319 of title 49, United States Code; and
                                (ii) sections 142, 146, and 149 of title
                            23, United States Code,
                    provided that not more than 10 percent of allowances
                    distributed to each State pursuant to this section
                    shall be used for such purpose.
                (5) For any allowances used for the purpose described in
            paragraph (4)(C), the State shall--
                        (A) prioritize expansion of existing energy
                    efficiency programs approved and overseen by the State
                    or the appropriate State regulatory authority; and
                        (B) demonstrate that such allowances have been used
                    to supplement, and not to supplant, existing and
                    otherwise available State, local, and ratepayer funding
                    for such purpose.
        (d) Reporting.--Each State receiving allowances under this section
    shall include in its biennial reports required under section 131, in
    accordance with such requirements as the Administrator may prescribe--
                (1) a list of entities receiving allowances or allowance
            value under this section, including entities receiving such
            allowances or allowance value from units of local government
            pursuant to subsection (c)(1);
                (2) the amount and nature of allowances or allowance value
            received by each such recipient;
                (3) the specific purposes for which such allowances or
            allowance value was conveyed to each such recipient;
                (4) documentation of the amount of energy savings, emission
            reductions, renewable energy deployment, and new or retooled
            manufacturing capacity resulting from the use of such
            allowances or allowance value; and
                (5) for any energy efficiency program supported under
            subsection (c)(4)(C)--
                        (A) an assessment demonstrating the cost-
                    effectiveness of such program; and
                        (B) a demonstration that the requirements set forth
                    in subsection (c)(5) have been satisfied.
        (e) Enforcement.--If the Administrator determines that a State is
    not in compliance with this section, the Administrator may withhold up
    to twice the number of allowances that the State failed to use in
    accordance with the requirements of this section, that such State would
    otherwise be eligible to receive under this section in later years.
    Allowances withheld pursuant to this subsection shall be distributed
    among the remaining States in accordance with the requirements of
    subsection (b).

    SEC. 133. SUPPORT OF INDIAN RENEWABLE ENERGY AND ENERGY EFFICIENCY
                  PROGRAMS.

        (a) Definitions.--For purposes of this section:
                (1) Allowance; cost-effective; renewable energy resource.--
            The terms ``allowance'', ``cost-effective'', and ``renewable
            energy resource'' have the meaning given those terms in section
            132 of this Act.
                (2) 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).
                (3) Secretary.--The term ``Secretary'' means the Secretary
            of Energy.
        (b) Establishment.--Not later than 18 months after the date of
    enactment of this Act, the Secretary shall, in consultation with the
    Administrator and the Secretary of the Interior, promulgate regulations
    establishing a program to distribute allowances to Indian tribes on a
    competitive basis for the following purposes:
                (1) Energy efficiency.--Cost-effective energy efficiency
            programs for end-use consumers of electricity, natural gas,
            home heating oil, or propane.
                (2) Renewable energy.--Deployment of technologies to
            generate electricity from renewable energy resources.
        (c) Requirements.--The regulations promulgated pursuant to
    subsection (b) shall prescribe design elements and requirements of the
    program established under this section, including--
                (1) objective criteria for evaluating proposals submitted
            by Indian tribes, and for selecting projects and programs to
            receive support, under this section;
                (2) reporting requirements for Indian tribes that receive
            allowances under this section; and
                (3) other appropriate elements and requirements.
        (d) Distribution.--The Administrator shall, at the direction of the
    Secretary, distribute to Indian tribes allowances that are set aside,
    pursuant to section 132, for use under this section.

                       Subtitle E--Smart Grid Advancement

    SEC. 141. DEFINITIONS.

        For purposes of this subtitle:
                (1) The term ``applicable baseline'' means the average of
            the highest three annual peak demands a load-serving entity has
            experienced during the 5 years immediately prior to the date of
            enactment of this Act.
                (2) The term ``Commission'' means Federal Energy Regulatory
            Commission.
                (3) The term ``load-serving entity'' means an entity that
            provides electricity directly to retail consumers with the
            responsibility to assure power quality and reliability,
            including such entities that are investor-owned, publicly
            owned, owned by rural electric cooperatives, or other entities.
                (4) The term ``peak demand'' means the highest point of
            electricity demand, net of any distributed electricity
            generation or storage from sources on the load-serving entity's
            customers' premises, during any hour on the system of a load
            serving entity during a calendar year, expressed in Megawatts
            (MW), or more than one such high point as a function of
            seasonal demand changes.
                (5) The term ``peak demand reduction'' means the reduction
            in annual peak demand as compared to a previous baseline year
            or period, expressed in Megawatts (MW), whether accomplished
            by--
                        (A) diminishing the end-use requirements for
                    electricity;
                        (B) use of locally stored energy or generated
                    electricity to meet those requirements from distributed
                    resources on the load-serving entity's customers'
                    premises and without use of high-voltage transmission;
                    or
                        (C) energy savings from efficient operation of the
                    distribution grid resulting from the use of a Smart
                    Grid.
                (6) The term ``peak demand reduction plan'' means a plan
            developed by or for a load-serving entity that it will
            implement to meet its peak demand reduction goals.
                (7) The term ``peak period'' means the time period on the
            system of a load-serving entity relative to peak demand that
            may warrant special measures or electricity resources to
            maintain system reliability while meeting peak demand.
                (8) The term ``Secretary'' means the Secretary of Energy.
                (9) The term ``Smart Grid'' has the meaning provided by
            section 1301 of the Energy Independence and Security Act of
            2007 (15 U.S.C. 17381).

    SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVENESS IN PRODUCTS.

        (a) Assessment.--Within 1 year after the date of enactment of this
    Act, the Secretary and the Administrator shall each assess the
    potential for cost-effective integration of Smart Grid technologies and
    capabilities in all products that are reviewed by the Department of
    Energy and the Environmental Protection Agency, respectively, for
    potential designation as Energy Star products.
        (b) Analysis.--(1) Within 2 years after the date of enactment of
    this Act, the Secretary and the Administrator shall each prepare an
    analysis of the potential energy savings, greenhouse gas emission
    reductions, and electricity cost savings that could accrue for each of
    the products identified by the assessment in subsection (a) in the
    following optimal circumstances:
                (A) The products possessed Smart Grid capability and
            interoperability that is tested and proven reliable.
                (B) The products were utilized in an electricity utility
            service area which had Smart Grid capability and offered
            customers rate or program incentives to use the products.
                (C) The utility's rates reflected national average costs,
            including average peak and valley seasonal and daily
            electricity costs.
                (D) Consumers using such products took full advantage of
            such capability.
                (E) The utility avoided incremental investments and rate
            increases related to such savings.
        (2) The analysis under paragraph (1) shall be considered the ``best
    case'' Smart Grid analysis. On the basis of such an analysis for each
    product, the Secretary and the Administrator shall determine whether
    the installation of Smart Grid capability for such a product would be
    cost effective. For purposes of this paragraph, the term ``cost
    effective'' means that the cumulative savings from using the product
    under the best case Smart Grid circumstances for a period of one-half
    of the product's expected useful life will be greater than the
    incremental cost of the Smart Grid features included in the product.
        (3) To the extent that including Smart Grid capability in any
    products analyzed under paragraph (2) is found to be cost effective in
    the best case, the Secretary and the Administrator shall, not later
    than 3 years after the date of enactment of this Act take each of the
    following actions:
                (A) Inform the manufacturer of such product of such finding
            of cost effectiveness.
                (B) Assess the potential contributions the development and
            use of products with Smart Grid technologies bring to reducing
            peak demand and promoting grid stability.
                (C) Assess the potential national energy savings and
            electricity cost savings that could be realized if Smart Grid
            potential were installed in the relevant products reviewed by
            the Energy Star program.
                (D) Assess and identify options for providing consumers
            information on products with Smart Grid capabilities, including
            the necessary conditions for cost-effective savings.
                (E) Submit a report to Congress summarizing the results of
            the assessment for each class of products, and presenting the
            potential energy and greenhouse gas savings that could result
            if Smart Grid capability were installed and utilized on such
            products.

    SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON APPLIANCE ENERGY GUIDE
                  LABELS.

        Section 324(a)(2) of the Energy Policy and Conservation Act (42
    U.S.C. 6294(a)(2)) is amended by adding the following at the end:
                        ``(J)(i) Not later than 1 year after the date of
                    enactment of this subparagraph, the Federal Trade
                    Commission shall initiate a rulemaking to consider
                    making a special note in a prominent manner on any
                    ENERGY GUIDE label for any product actually including
                    Smart Grid capability that--
                                ``(I) Smart Grid capability is a feature of
                            that product;
                                ``(II) the use and value of that feature
                            depended on the Smart Grid capability of the
                            utility system in which the product was
                            installed and the active utilization of that
                            feature by the customer; and
                                ``(III) on a utility system with Smart Grid
                            capability, the use of the product's Smart Grid
                            capability could reduce the customer's cost of
                            the product's annual operation by an estimated
                            dollar amount range representing the result of
                            incremental energy and electricity cost savings
                            that would result from the customer taking full
                            advantage of such Smart Grid capability.
                        ``(ii) Not later than 3 years after the date of
                    enactment of this subparagraph, the Commission shall
                    complete the rulemaking initiated under clause (i).''.

    SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS.

        (a) Goals.--Not later than 1 year after the date of enactment of
    this section, each load-serving entity, or, at the option of the State,
    each State with respect to load-serving entities that the State
    regulates, shall determine and publish peak demand reduction goals for
    any load-serving entities that have an applicable baseline in excess of
    250 megawatts.
        (b) Baselines.--(1) The Commission, in consultation with the
    Secretary and the Administrator, shall develop and publish, after an
    opportunity for public comment, but not later than 180 days after
    enactment of this section, a methodology to provide for adjustments or
    normalization to a load-serving entity's applicable baseline over time
    to reflect changes in the number of customers served, weather
    conditions, general economic conditions, and any other appropriate
    factors external to peak demand management, as determined by the
    Commission.
        (2) The Commission shall support load-serving entities (including
    any load-serving entities with an applicable baseline of less than 250
    megawatts that volunteer to participate in achieving the purposes of
    this section) in determining their applicable baselines, and in
    developing their peak demand reduction goals.
        (3) The Secretary, in consultation with the Commission, the
    Administrator, and the North American Electric Reliability Corporation,
    shall develop a system and rules for measurement and verification of
    demand reductions.
        (c) Peak Demand Reduction Goals.--(1) Peak demand reduction goals
    may be established for an individual load-serving entity, or, at the
    determination of a State, tribal, or regional entity, by that State,
    tribal, or regional entity for a larger region that shares a common
    system peak demand and for which peak demand reduction measures would
    offer regional benefit.
        (2) A State or regional entity establishing peak demand reduction
    goals shall cooperate, as necessary and appropriate, with the
    Commission, the Secretary, State regulatory commissions, State energy
    offices, the North American Electric Reliability Corporation, and other
    relevant authorities.
        (3) In determining the applicable peak demand reduction goals--
                (A) States and other jurisdictional entities may utilize
            the results of the 2009 National Demand Response Potential
            Assessment, as authorized by section 571 of the National Energy
            Conservation Policy Act (42 U.S.C. 8279); and
                (B) the relative economics of peak demand reduction and
            generation required to meet peak demand shall be evaluated in a
            neutral and objective manner.
        (4) The applicable peak demand reduction goals shall provide that--
                (A) load-serving entities will reduce or mitigate peak
            demand by a minimum percentage amount from the applicable
            baseline to a lower peak demand during calendar year 2012;
                (B) load-serving entities will reduce or mitigate peak
            demand by a minimum percentage greater amount from the
            applicable baseline to a lower peak demand during calendar year
            2015; and
                (C) the minimum percentage reductions established as peak
            demand reduction goals shall be the maximum reductions that are
            realistically achievable with an aggressive effort to deploy
            Smart Grid and peak demand reduction technologies and methods,
            including but not limited to those listed in subsection (d).
        (d) Plan.--Each load-serving entity shall prepare a peak demand
    reduction plan that demonstrates its ability to meet each applicable
    goal by any or a combination of the following options:
                (1) Direct reduction in megawatts of peak demand through--
                        (A) energy efficiency measures (including efficient
                    transmission wire technologies which significantly
                    reduce line loss compared to traditional wire
                    technology) with reliable and continued application
                    during peak demand periods; or
                        (B) use of a Smart Grid.
                (2) Demonstration that an amount of megawatts equal to a
            stated portion of the applicable goal is contractually
            committed to be available for peak reduction through one or
            more of the following:
                        (A) Megawatts enrolled in demand response programs.
                        (B) Megawatts subject to the ability of a load-
                    serving entity to call on demand response programs,
                    smart appliances, smart electricity or energy storage
                    devices, distributed generation resources on the
                    entity's customers' premises, or other measures
                    directly capable of actively, controllably, reliably,
                    and dynamically reducing peak demand (``dynamic peak
                    management control'').
                        (C) Megawatts available from distributed dynamic
                    electricity or energy storage under agreement with the
                    owner of that storage.
                        (D) Megawatts committed from dispatchable
                    distributed generation demonstrated to be reliable
                    under peak period conditions and in compliance with air
                    quality regulations.
                        (E) Megawatts available from smart appliances and
                    equipment with Smart Grid capability available for
                    direct control by the utility through agreement with
                    the customer owning the appliances or equipment or with
                    a third party pursuant to such agreements.
                        (F) Megawatts from a demonstrated and assured
                    minimum of distributed solar electric generation
                    capacity in instances where peak period and peak demand
                    conditions are directly related to solar radiation and
                    accompanying heat.
                (3) If any of the methods listed in subparagraph (C), (D),
            or (E) of paragraph (2) are relied upon to meet its peak demand
            reduction goals, the load-serving entity must demonstrate this
            capability by operating a test during the applicable calendar
            year.
                (4) Nothing in this section shall require the publication
            in peak demand reduction goals or in any peak demand reduction
            plan of any information that is confidential for competitive or
            other reasons or that identifies individual customers.
        (e) Existing Authority and Requirements.--Nothing in this section
    diminishes or supersedes any authority of a State or political
    subdivision of a State to adopt or enforce any law or regulation
    respecting peak demand management, demand response, distributed energy
    storage, use of distributed generation, or the regulation of load-
    serving entities. The Commission, in consultation with States and
    Indian tribes having such peak management, demand response and
    distributed energy storage programs, shall to the maximum extent
    practicable, facilitate coordination between the Federal program and
    such State and tribal programs.
        (f) Relief.--The Commission may, for good cause, grant relief to
    load-serving entities from the requirements of this section.
        (g) Other Laws.--Except as provided in subsections (e) and (f), no
    law or regulation shall relieve any person of any requirement otherwise
    applicable under this section.
        (h) Compliance.--(1) The Commission shall within 1 year after the
    date of enactment of this Act establish a public website where the
    Commission will provide information and data demonstrating compliance
    by States, Indian tribes regional entities, and load-serving entities
    with this section, including the success of load-serving entities in
    meeting applicable peak demand reduction goals.
        (2) The Commission shall, by April 1 of each year beginning in
    2012, provide a report to Congress on compliance with this section and
    success in meeting applicable peak demand reduction goals and, as
    appropriate, shall make recommendations as to how to increase peak
    demand reduction efforts.
        (3) The Commission shall note in each such report any State,
    political subdivision of a State, or load-serving entity that has
    failed to comply with this section, or is not a part of any region or
    group of load-serving entities serving a region that has complied with
    this section.
        (4) The Commission shall have and exercise the authority to take
    reasonable steps to modify the process of establishing peak demand
    reduction goals and to accept adjustments to them as appropriate when
    sought by load-serving entities.
        (i) Assistance and Funding.--
                (1) Assistance to states and tribes.--Any costs incurred by
            States for activities undertaken pursuant to this section shall
            be supported by the use of emission allowances allocated to the
            States' SEED Accounts or to the tribes pursuant to section 132
            of this Act. To the extent that a State provides allowances to
            local governments within the State to implement this program,
            that shall be deemed a distribution of such allowances to units
            of local government pursuant to subsection (c)(1) of that
            section.
                (2) Funding.--There are authorized to be appropriated such
            sums as may be necessary to the Commission, the Secretary, and
            the Administrator to carry out the provisions of this section.

    SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUBLIC INFORMATION
                  PROGRAM TO INCLUDE SMART GRID INFORMATION.

        (a) In General.--Section 134 of the Energy Policy Act of 2005 (42
    U.S.C. 15832) is amended as follows:
                (1) By amending the section heading to read as follows:
            ``energy efficiency and smart grid public information
            initiative''.
                (2) In paragraph (1) of subsection (a) by striking ``reduce
            energy consumption during the 4-year period beginning on the
            date of enactment of this Act'' and inserting ``increase energy
            efficiency and to adopt Smart Grid technology and practices''.
                (3) In paragraph (2) of subsection (a) by striking
            ``benefits to consumers of reducing'' and inserting ``economic
            and environmental benefits to consumers and the United States
            of optimizing''.
                (4) In subsection (a) by inserting at the beginning of
            paragraph (3) ``the effect of energy efficiency and Smart Grid
            capability in reducing energy and electricity prices throughout
            the economy, together with''.
                (5) In subsection (a)(4) by redesignating subparagraph (D)
            as (E), by striking ``and'' at the end of subparagraph (C), and
            by inserting after subparagraph (C) the following:
                        ``(D) purchasing and utilizing equipment that
                    includes Smart Grid features and capability; and''.
                (6) In subsection (c), by striking ``Not later than July 1,
            2009,'' and inserting, ``For each year when appropriations
            pursuant to the authorization in this section exceed
            $10,000,000,''.
                (7) In subsection (d) by striking ``2010'' and inserting
            ``2020''.
                (8) In subsection (e) by striking ``2010'' and inserting
            ``2020''.
        (b) Table of Contents.--The item relating to section 134 in the
    table of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801
    and following) is amended to read as follows:

    ``Sec. 134. Energy efficiency and Smart Grid public information
                                initiative.''.

    SEC. 146. INCLUSION OF SMART GRID FEATURES IN APPLIANCE REBATE PROGRAM.

        (a) Amendments.--Section 124 of the Energy Policy Act of 2005 (42
    U.S.C. 15821) is amended as follows:
                (1) By amending the section heading to read as follows:
            ``energy efficient and smart appliance rebate program.''.
                (2) By redesignating paragraphs (4) and (5) of subsection
            (a) as paragraphs (5) and (6), respectively, and inserting
            after paragraph (3) the following:
                ``(4) Smart appliance.--The term `smart appliance' means a
            product that the Administrator of the Environmental Protection
            Agency or the Secretary of Energy has determined qualifies for
            such a designation in the Energy Star program pursuant to
            section 142 of the American Clean Energy and Security Act of
            2009, or that the Secretary or the Administrator has separately
            determined includes the relevant Smart Grid capabilities listed
            in section 1301 of the Energy Independence and Security Act of
            2007 (15 U.S.C. 17381).''.
                (3) In subsection (b)(1) by inserting ``and smart'' after
            ``efficient'' and by inserting after ``products'' the first
            place it appears ``, including products designated as being
            smart appliances''.
                (4) In subsection (b)(3), by inserting ``the administration
            of'' after ``carry out''.
                (5) In subsection (d), by inserting ``the administration
            of'' after ``carrying out'' and by inserting ``, and up to 100
            percent of the value of the rebates provided pursuant to this
            section'' before the period at the end.
                (6) In subsection (e)(3), by inserting ``, with separate
            consideration as applicable if the product is also a smart
            appliance,'' after ``Energy Star product'' the first place it
            appears and by inserting ``or smart appliance'' before the
            period at the end.
                (7) In subsection (f), by striking ``$50,000,000'' through
            the period at the end and inserting ``$100,000,000 for each
            fiscal year from 2010 through 2015.''.
        (b) Table of Contents.--The item relating to section 124 in the
    table of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801
    and following) is amended to read as follows:

    ``Sec. 124. Energy efficient and smart appliance rebate program.''.

                       Subtitle F--Transmission Planning

    SEC. 151. TRANSMISSION PLANNING AND SITING.

        (a) In General.--Section 216 of the Federal Power Act (16 U.S.C.
    824p) is amended as follows:
                (1) In subsection (b), in paragraph (5), by striking ``;
            and'' and inserting a semicolon, in paragraph (6) by striking
            the period and inserting ``; and'' and by adding the following
            at the end thereof:
                ``(7) the facility is interstate in nature or is an
            intrastate segment integral to a proposed interstate
            facility;''.
                (2) In subsection (k), by inserting at the end the
            following: ``Subsections (a), (b), (c), and (h) of this section
            shall not apply in the Western interconnection.''.
                (3) In subsections (d) and (e), by striking ``subsection
            (b)'' in each place and inserting ``subsection (b) or section
            216B'', and by striking ``permit'' and inserting ``permit or
            certificate'' in each place it appears.
        (b) New Sections.--The Federal Power Act (16 U.S.C. 824p) is
    amended by inserting the following new sections after section 216:

    ``SEC. 216A. TRANSMISSION PLANNING.

        ``(a) Federal Policy for Transmission Planning.--
                ``(1) Objectives.--It is the policy of the United States
            that regional electric grid planning should facilitate the
            deployment of renewable and other zero-carbon and low-carbon
            energy sources for generating electricity to reduce greenhouse
            gas emissions while ensuring reliability, reducing congestion,
            ensuring cyber-security, minimizing environmental harm, and
            providing for cost-effective electricity services throughout
            the United States, in addition to serving the objectives stated
            in section 217(b)(4).
                ``(2) Options.--In addition to the policy under paragraph
            (1), it is the policy of the United States that regional
            electric grid planning to meet these objectives should result
            from an open, inclusive and transparent process, taking into
            account all significant demand-side and supply-side options,
            including energy efficiency, distributed generation, renewable
            energy and zero-carbon electricity generation technologies,
            smart-grid technologies and practices, demand response,
            electricity storage, voltage regulation technologies, high
            capacity conductors with at least 25 percent greater efficiency
            than traditional ACSR (aluminum stranded conductors steel
            reinforced) conductors, superconductor technologies,
            underground transmission technologies, and new conventional
            electric transmission capacity and corridors.
        ``(b) Planning.--
                ``(1) Planning principles.--Not later than 1 year after the
            date of enactment of this section, the Commission shall adopt,
            after notice and opportunity for comment, national electricity
            grid planning principles derived from the Federal policy
            established under subsection (a) to be applied in ongoing and
            future transmission planning that may implicate interstate
            transmission of electricity.
                ``(2) Regional planning entities.--Not later than 3 months
            after the date of adoption by the Commission of national
            electricity grid planning principles pursuant to paragraph (1),
            entities that conduct or may conduct transmission planning
            pursuant to State, tribal, or Federal law or regulation,
            including States, Indian tribes, entities designated by States
            and Indian tribes, Federal Power Marketing Administrations,
            transmission providers, operators and owners, regional
            organizations, and electric utilities, and that are willing to
            incorporate the national electricity grid planning principles
            adopted by the Commission in their electric grid planning,
            shall identify themselves and the regions for which they
            propose to develop plans to the Commission.
                ``(3) Coordination of regional planning entities.--The
            Commission shall encourage regional planning entities described
            under paragraph (2) to cooperate and coordinate across regions
            and to harmonize regional electric grid planning with planning
            in adjacent or overlapping jurisdictions to the maximum extent
            feasible. The Commission shall work with States, Indian tribes,
            Federal land management agencies, State energy, environment,
            natural resources, and land management agencies and
            commissions, Federal power marketing administrations, electric
            utilities, transmission providers, load-serving entities,
            transmission operators, regional transmission organizations,
            independent system operators, and other organizations to
            resolve any conflict or competition among proposed planning
            entities in order to build consensus and promote the Federal
            policy established under subsection (a). The Commission shall
            seek to ensure that planning that is consistent with the
            national electricity grid planning principles adopted pursuant
            to paragraph (1) is conducted in all regions of the United
            States and the territories, but in a manner that, to the extent
            feasible, avoids uncoordinated planning by more than one
            planning entity for the same area.
                ``(4) Relation to existing planning policy.--In
            implementing the Federal policy established under subsection
            (a), the Commission shall--
                        ``(A) incorporate and coordinate with any ongoing
                    planning efforts undertaken pursuant to section 217 and
                    Commission Order No. 890;
                        ``(B) coordinate with the Secretary of Energy in
                    providing to the regional planning entities an annual
                    summary of national energy policy priorities and goals;
                        ``(C) coordinate with corridor designation and
                    planning functions carried out pursuant to section 216
                    by the Secretary of Energy, who shall provide financial
                    support from available funds to support the purposes of
                    this section; and
                        ``(D) coordinate with the Secretaries of the
                    Interior and Agriculture and Indian tribes in carrying
                    out the Secretaries' or tribal governments' existing
                    responsibilities for the planning or siting of
                    transmission facilities on Federal or tribal lands,
                    consistent with law, policy, and regulations relating
                    to the management of federal public lands.
                ``(5) Assistance.--
                        ``(A) In general.--The Commission shall provide
                    support to and may participate if invited to do so in
                    the regional grid planning processes conducted by
                    regional planning entities. The Secretary of Energy and
                    the Commission may provide planning resources and
                    assistance as required or as requested by regional
                    planning entities, including system data, cost
                    information, system analysis, technical expertise,
                    modeling support, dispute resolution services, and
                    other assistance to regional planning entities, as
                    appropriate.
                        ``(B) Authorization.--There are authorized to be
                    appropriated such sums as may be necessary to carry out
                    this paragraph.
                ``(6) Conflict resolution.--In the event that regional grid
            plans conflict, the Commission shall assist the regional
            planning entities in resolving such conflicts in order to
            achieve the objectives of the Federal policy established under
            subsection (a).
                ``(7) Submission of plans.--The Commission shall require
            regional planning entities to submit initial regional electric
            grid plans to the Commission not later than 18 months after the
            date the Commission promulgates national electricity grid
            planning principles pursuant to paragraph (1), with updates to
            such plans not less than every 3 years thereafter. The
            Commission shall review such plans for consistency with the
            national grid planning principles and may return a plan to one
            or more planning entities for further consideration, along with
            the Commission's own recommendations for resolution of any
            conflict or for improvement.
                ``(8) Integration of plans.--Regional electric grid plans
            should, in general, be developed from sub-regional requirements
            and plans, including planning input reflecting individual
            utility service areas. Regional plans may then in turn be
            combined into larger regional plans, up to interconnection-wide
            and national plans, as appropriate and necessary as determined
            by the Commission. In no case shall a multi-regional plan
            impose inclusion of a facility on a region that has submitted a
            valid plan that, after efforts to resolve the conflict, does
            not include such facility. To the extent practicable, all plans
            submitted to the Commission shall be public documents and
            available on the Commission's Web site.
                ``(9) Multi-regional meetings.--As regional grid plans are
            submitted to the Commission, the Commission may convene multi-
            regional meetings to discuss regional grid plan consistency and
            integration, including requirements for multi-regional
            projects, and to resolve any conflicts that emerge from such
            multi-regional projects. The Commission shall provide its
            recommendations for eliminating any inter-regional conflicts.
                ``(10) Report to congress.--Not later than 3 years after
            the date of enactment of this section and each 3 years
            thereafter, the Commission shall provide a report to Congress
            containing the results of the regional grid planning process,
            including summaries of the adopted regional plans and the
            extent to which the Federal policy objectives in subsection (a)
            have been successfully achieved. The Commission shall provide
            an electronic version of its report on its website with links
            to all regional and sub-regional plans taken into account. The
            Commission shall note and provide its recommended resolution
            for any conflicts not resolved during the planning process. The
            Commission shall make any recommendations to Congress on the
            appropriate Federal role or support required to address the
            needs of the electric grid, including recommendations for
            addressing any needs that are beyond the reach of existing
            State, tribal, and Federal authority.

    ``SEC. 216B. SITING AND CONSTRUCTION IN THE WESTERN INTERCONNECTION.

        ``(a) Applicability.--This section applies only to States located
    in the Western Interconnection and does not apply to States located in
    the Eastern Interconnection, to the States of Alaska or Hawaii, or to
    ERCOT.
        ``(b) Certificate of Public Convenience and Necessity.--The
    Commission may, after notice and opportunity for hearing, issue a
    certificate of public convenience and necessity for the construction or
    modification of a transmission facility if the Commission finds that--
                ``(1) the facility was identified and included in one or
            more relevant and final regional or interconnection-wide
            electric grid plans submitted to the Commission pursuant to
            subsection (b) of 216A;
                ``(2) any conflict among regional electric grid plans
            concerning the need for the facility was resolved;
                ``(3) such relevant regional electric grid plans are
            consistent with the national grid planning principles adopted
            by the Commission pursuant to subsection (b);
                ``(4) the facility was identified as needed in significant
            measure to meet demand for renewable energy in such plans;
                ``(5) the facility is a multistate facility;
                ``(6) the developer of such facility filed a complete
            application seeking approval for the siting of the facility
            with a state commission or other entity that has authority to
            approve the siting of the facility;
                ``(7) a State commission or other entity that has authority
            to approve the siting of the facility--
                        ``(A) did not issue a decision on an application
                    seeking approval for the siting of the facility within
                    1 year after the date the applicant submitted a
                    completed application to the State;
                        ``(B) denied a complete application seeking
                    approval for the siting of the facility; or
                        ``(C) authorized the siting of the facility subject
                    to conditions that unreasonably interfere with the
                    development of the facility; and
                ``(8) the siting of the facility can be accomplished in a
            manner consistent with the Federal policy established in
            subsection (a) of section 216A and the national grid planning
            principles adopted by the Commission pursuant to subsection (b)
            of section 216A.
        ``(c) State Recommendations on Resource Protection.--In issuing a
    final certificate of public convenience and necessity pursuant to
    subsection (b), the Commission shall--
                ``(1) consider any siting constraints and mitigation
            measures based on habitat protection, health and safety
            considerations, environmental considerations, or cultural site
            protection identified by relevant State or local authorities;
            and
                ``(2) incorporate those identified siting constraints or
            mitigation measures, including recommendations related to
            project routing, as conditions in the final certificate of
            public convenience and necessity, or if the Commission
            determines that a recommended siting constraint or mitigation
            measure is infeasible, excessively costly, or inconsistent with
            the Federal policy established in subsection (a) of section
            216A or the national grid planning principles adopted by the
            Commission pursuant to subsection (b) of section 216A--
                        ``(A) consult with State regulatory agencies to
                    seek to resolve the issue;
                        ``(B) incorporate as conditions on the certificate
                    such recommended siting constraints or mitigation
                    measures as are determined to be appropriate by the
                    Commission, based on consultation by the Commission
                    with State regulatory agencies, the Federal policy
                    established in subsection (a) of section 216A and the
                    national grid planning principles adopted by the
                    Commission pursuant to subsection (b)of section 216A,
                    and the record before the Commission; and
                        ``(C) if, after consultation, the Commission does
                    not adopt in whole or in part a recommendation of an
                    agency, publish a finding that the adoption of the
                    recommendation is infeasible, not cost effective, or
                    inconsistent with this section or other applicable
                    provisions of law.
        ``(d) Certificate Applications.--(1) An application for a
    preliminary or final certificate of public convenience and necessity
    under this subsection shall be made in writing to the Commission.
        ``(2) The Commission shall issue rules specifying--
                ``(A) the form of the application;
                ``(B) the information to be contained in the application;
            and
                ``(C) the manner of service of notice of the application on
            interested persons.
        ``(e) Coordination of Federal Authorizations for Transmission
    Facilities.--
                ``(1) In this subsection, the term `Federal authorization'
            shall have the same meaning and include the same actions as in
            section 216(h).
                ``(2) The Federal Energy Regulatory Commission shall act as
            the lead agency for purposes of coordinating all applicable
            Federal authorizations and related environmental reviews of the
            facility, provided, however, that to the extent the facility is
            proposed to be sited on Federal lands, the Department of the
            Interior will assume such lead-agency duties as agreed between
            the Commission and the Department of Interior.
                ``(3) To the maximum extent practicable under applicable
            Federal law, the Commission, and to the extent agreed, the
            Secretary of Interior, shall coordinate the Federal
            authorization and review process under this subsection with any
            Indian tribes, multistate entities, and State agencies that are
            responsible for conducting any separate permitting and
            environmental reviews of the facility, to ensure timely and
            efficient review and permit decisions.
                ``(4)(A) As head of the lead agency, the Chairman of the
            Commission, in consultation with the Secretary of Interior and
            with those entities referred to in paragraph (3) that are
            willing to coordinate their own separate permitting and
            environmental reviews with the Federal authorization and
            environmental reviews, shall establish prompt and binding
            intermediate milestones and ultimate deadlines for the review
            of, and Federal authorization decisions relating to, the
            proposed facility.
                ``(B) The Chairman of the Commission, or the Secretary of
            Interior, as agreed under paragraph (2), shall ensure that,
            once an application has been submitted with such data as the
            lead agency considers necessary, all permit decisions and
            related environmental reviews under all applicable Federal laws
            shall be completed--
                        ``(i) within 1 year; or
                        ``(ii) if a requirement of another provision of
                    Federal law does not permit compliance with clause (i),
                    as soon thereafter as is practicable.
                ``(C) The Commission shall provide an expeditious pre-
            application mechanism for prospective applicants to confer with
            the agencies involved to have each such agency determine and
            communicate to the prospective applicant not later than 60 days
            after the prospective applicant submits a request for such
            information concerning--
                        ``(i) the likelihood of approval for a potential
                    facility; and
                        ``(ii) key issues of concern to the agencies and
                    public.
                ``(5)(A) As lead agency head, the Chairman of the
            Commission, in consultation with the affected agencies, shall
            prepare a single environmental review document, which shall be
            used as the basis for all decisions on the proposed project
            under Federal law.
                ``(B) The Chairman of the Commission and the heads of other
            agencies shall streamline the review and permitting of
            transmission within corridors designated under section 503 of
            the Federal Land Policy and Management Act (43 U.S.C. 1763) by
            fully taking into account prior analyses and decisions relating
            to the corridors.
                ``(C) The document shall include consideration by the
            relevant agencies of any applicable criteria or other matters
            as required under applicable law.
                ``(6)(A) If any agency has denied a Federal authorization
            required for a transmission facility, or has failed to act by
            the deadline established by the Commission pursuant to this
            section for deciding whether to issue the authorization, the
            applicant or any State in which the facility would be located
            may file an appeal with the President, who shall, in
            consultation with the affected agency, review the denial or
            failure to take action on the pending application.
                ``(B) Based on the overall record and in consultation with
            the affected agency, the President may--
                        ``(i) issue the necessary authorization with any
                    appropriate conditions; or
                        ``(ii) deny the application.
                ``(C) The President shall issue a decision not later than
            90 days after the date of the filing of the appeal.
                ``(D) In making a decision under this paragraph, the
            President shall comply with applicable requirements of Federal
            law, including any requirements of--
                        ``(i) the National Forest Management Act of 1976
                    (16 U.S.C. 472a et seq.);
                        ``(ii) the Endangered Species Act of 1973 (16
                    U.S.C. 1531 et seq.);
                        ``(iii) the Federal Water Pollution Control Act (33
                    U.S.C. 1251 et seq.);
                        ``(iv) the National Environmental Policy Act of
                    1969 (42 U.S.C. 4321 et seq.); and
                        ``(v) the Federal Land Policy and Management Act of
                    1976 (43 U.S.C. 1701 et seq.).
                ``(7)(A) Not later than 18 months after August 8, 2005, the
            Commission or, as requested, the Secretary or Interior, shall
            issue any regulations necessary to implement this subsection.
                ``(B)(i) Not later than 1 year after August 8, 2005, the
            Commission, the Secretary of Interior, and the heads of all
            Federal agencies with authority to issue Federal authorizations
            shall enter into a memorandum of understanding to ensure the
            timely and coordinated review and permitting of electricity
            transmission facilities.
                ``(ii) Interested Indian tribes, multistate entities, and
            State agencies may enter the memorandum of understanding.
                ``(C) The head of each Federal agency with authority to
            issue a Federal authorization shall designate a senior official
            responsible for, and dedicate sufficient other staff and
            resources to ensure, full implementation of the regulations and
            memorandum required under this paragraph.
                ``(8)(A) Each Federal land use authorization for an
            electricity transmission facility shall be issued--
                        ``(i) for a duration, as determined by the
                    Secretary of Interior, commensurate with the
                    anticipated use of the facility; and
                        ``(ii) with appropriate authority to manage the
                    right-of-way for reliability and environmental
                    protection.
                ``(B) On the expiration of the authorization (including an
            authorization issued before August 8, 2005), the authorization
            shall be reviewed for renewal taking fully into account
            reliance on such electricity infrastructure, recognizing the
            importance of the authorization for public health, safety, and
            economic welfare and as a legitimate use of Federal land.
                ``(9) In exercising the responsibilities under this
            section, the Commission shall consult regularly with--
                        ``(A) electric reliability organizations (including
                    related regional entities) approved by the Commission;
                    and
                        ``(B) Transmission Organizations approved by the
                    Commission.''.

    SEC. 152. NET METERING FOR FEDERAL AGENCIES.

        (a) Standard.--Subsection (b) of section 113 of the Public Utility
    Regulatory Policies Act of 1978 (16 U.S.C. 2623) is amended by adding
    the following new paragraph at the end thereof:
                ``(6) Net metering for federal agencies.--Each electric
            utility shall offer to arrange (either directly or through a
            third party) to make interconnection and net metering available
            to Federal Government agencies, offices, or facilities in
            accordance with the requirements of section 115(j). The
            standard under this paragraph shall apply only to electric
            utilities that sold over 4,000,000 megawatt hours of
            electricity in the preceding year to the ultimate consumers
            thereof. In the case of a standard under this paragraph, a
            period of 1 year after the date of the enactment of this
            section shall be substituted for the 2-year period referred to
            in other provisions of this section.''.
        (b) Special Rules.--Section 115 of the Public Utility Regulatory
    Policies Act of 1978 (16 U.S.C. 2625) is amended by adding the
    following new subsection at the end thereof:
        ``(j) Net Metering for Federal Agencies.--(1) The standard under
    paragraph (6) of section 113(b) shall require that rates and charges
    and contract terms and conditions for the sale of electric energy to
    the Federal Government or agency shall be the same as the rates and
    charges and contract terms and conditions that would be applicable if
    the agency did not own or operate a qualified generation unit and use a
    net metering system.
        ``(2)(A) The standard under paragraph (6) of section 113(b) shall
    require that each electric utility shall arrange to provide to the
    Government office or agency that qualifies for net metering an
    electrical energy meter capable of net metering and measuring, to the
    maximum extent practicable, the flow of electricity to or from the
    customer, using a single meter and single register, the cost of which
    shall be recovered from the customer.
        ``(B) In a case in which it is not practicable to provide a meter
    under subparagraph (A), the utility (either directly or through a third
    party) shall, at the expense of the utility install 1 or more of those
    electric energy meters.
        ``(3)(A) The standard under paragraph (6) of section 113(b) shall
    require that each electric utility shall calculate the electric energy
    consumption for the Government office or agency using a net metering
    system that meets the requirements of this subsection and paragraph (6)
    of section 113(b) and shall measure the net electricity produced or
    consumed during the billing period using the metering installed in
    accordance with this paragraph.
        ``(B) If the electricity supplied by the retail electric supplier
    exceeds the electricity generated by the Government office or agency
    during the billing period, the Government office or agency shall be
    billed for the net electric energy supplied by the retail electric
    supplier in accordance with normal billing practices.
        ``(C) If electric energy generated by the Government office or
    agency exceeds the electric energy supplied by the retail electric
    supplier during the billing period, the Government office or agency
    shall be billed for the appropriate customer charges for that billing
    period and credited for the excess electric energy generated during the
    billing period, with the credit appearing as a kilowatt-hour credit on
    the bill for the following billing period.
        ``(D) Any kilowatt-hour credits provided to the Government office
    or agency as provided in this subsection shall be applied to the
    Government office or agency electric energy consumption on the
    following billing period bill (except for a billing period that ends in
    the next calendar year). At the beginning of each calendar year, any
    unused kilowatt-hour credits remaining from the preceding year will
    carry over to the new year.
        ``(4) The standard under paragraph (6) of section 113(b) shall
    require that each electric utility shall offer a meter and retail
    billing arrangement that has time-differentiated rates. The kilowatt-
    hour credit shall be based on the ratio representing the difference in
    retail rates for each time-of-use rate, or the credits shall be
    reflected on the bill of the Government office or agency as a monetary
    credit reflecting retail rates at the time of generation of the
    electric energy by the customer-generator.
        ``(5) The standard under paragraph (6) of section 113(b) shall
    require that the qualified generation unit, interconnection standards,
    and net metering system used by the Government office or agency shall
    meet all applicable safety and performance and reliability standards
    established by the National Electrical Code, the Institute of
    Electrical and Electronics Engineers, Underwriters Laboratories, and
    the American National Standards Institute.
        ``(6) The standard under paragraph (6) of section 113(b) shall
    require that electric utilities shall not make additional charges,
    including standby charges, for equipment or services for safety or
    performance that are in addition to those necessary to meet the other
    standards and requirements of this subsection and paragraph (6) of
    section 113(b).
        ``(7) For purposes of this subsection and paragraph (6) of section
    113(b):
                ``(A) The term `Government' means any office, facility, or
            agency of the Federal Government.
                ``(B) The term `customer-generator' means the owner or
            operator of a electricity generation unit.
                ``(C) The term `electric generation unit' means any
            renewable electric generation unit that is owned, operated, or
            sited on a Federal Government facility.
                ``(D) The term `net metering' means the process of--
                        ``(i) measuring the difference between the
                    electricity supplied to a customer-generator and the
                    electricity generated by the customer-generator that is
                    delivered to a utility at the same point of
                    interconnection during an applicable billing period;
                    and
                        ``(ii) providing an energy credit to the customer-
                    generator in the form of a kilowatt-hour credit for
                    each kilowatt-hour of electricity produced by the
                    customer-generator from an electric generation unit.''.
        (c) Savings Provision.--If this section or a portion of this
    section is determined to be invalid or unenforceable, that shall not
    affect the validity or enforceability of any other provision of this
    Act.

    SEC. 153. SUPPORT FOR QUALIFIED ADVANCED ELECTRIC TRANSMISSION
                  MANUFACTURING PLANTS, QUALIFIED HIGH EFFICIENCY
                  TRANSMISSION PROPERTY, AND QUALIFIED ADVANCED ELECTRIC
                  TRANSMISSION PROPERTY.

        (a) Loan Guarantees Prior to September 30, 2011.--Section 1705(a)
    of the Energy Policy Act of 2005 (42 U.S.C. 16515(a)), as added by
    section 406 of the American Recovery and Reinvestment Act of 2009
    (Public Law 109-58; 119 Stat. 594) is amended by adding the following
    new paragraph at the end thereof:
                ``(5) The development, construction, acquisition,
            retrofitting, or engineering integration of a qualified
            advanced electric transmission manufacturing plant or the
            construction of a qualified high efficiency transmission
            property or a qualified advanced electric transmission property
            (whether by construction of new facilities or the modification
            of existing facilities). For purposes of this paragraph:
                        ``(A) The term `qualified advanced electric
                    transmission property' means any high voltage electric
                    transmission cable, related substation, converter
                    station, or other integrated facility that--
                                ``(i) utilizes advanced ultra low
                            resistance superconductive material or other
                            advanced technology that has been determined by
                            the Secretary of Energy as--
                                        ``(I) reasonably likely to become
                                    commercially viable within 10 years
                                    after the date of enactment of this
                                    paragraph;
                                        ``(II) capable of reliably
                                    transmitting at least 5 gigawatts of
                                    high-voltage electric energy for
                                    distances greater than 300 miles with
                                    energy losses not exceeding 3 percent
                                    of the total power transported; and
                                        ``(III) not creating an
                                    electromagnetic field;
                                ``(ii) has been determined by an
                            appropriate energy regulatory body, upon
                            application, to be in the public interest and
                            thereby eligible for inclusion in regulated
                            rates; and
                                ``(iii) can be located safely and
                            economically in a permanent underground right
                            of way not to exceed 25 feet in width.
                    The term `qualified advanced electric transmission
                    property' shall not include any property placed in
                    service after December 31, 2016.
                        ``(B)(i) The term `qualified high efficiency
                    transmission property' means any high voltage overhead
                    electric transmission line, related substation, or
                    other integrated facility that--
                                ``(I) utilizes advanced conductor core
                            technology that--
                                        ``(aa) has been determined by the
                                    Secretary of Energy as reasonably
                                    likely to become commercially viable
                                    within 10 years after the date of
                                    enactment of this paragraph;
                                        ``(bb) is suitable for use on
                                    transmission lines up to 765kV; and
                                        ``(cc) exhibits power losses at
                                    least 30 percent lower than that of
                                    transmission lines using conventional
                                    `ACSR' conductors;
                                ``(II) has been determined by an
                            appropriate energy regulatory body, upon
                            application, to be in the public interest and
                            thereby eligible for inclusion in regulated
                            rates; and
                                ``(III) can be located safely and
                            economically in a right of way not to exceed
                            that used by conventional `ACSR' conductors;
                            and
                        ``(ii) The term `qualified high efficiency
                    transmission property' shall not include any property
                    placed in service after December 31, 2016.
                        ``(C) The term `qualified advanced electric
                    transmission manufacturing plant' means any industrial
                    facility located in the United States which can be
                    equipped, re-equipped, expanded, or established to
                    produce in whole or in part qualified advanced electric
                    transmission property.''.
        (b) Additional Loan Guarantee Authority.--Section 1703 of the
    Energy Policy Act of 2005 (42 U.S.C. 16513) is amended by adding the
    following new paragraph at the end of subsection (b):
                ``(12) The development, construction, acquisition,
            retrofitting, or engineering integration of a qualified
            advanced electric transmission manufacturing plant or the
            construction of a qualified advanced electric transmission
            property (whether by construction of new facilities or the
            modification of existing facilities). For purposes of this
            paragraph, the terms `qualified advanced electric transmission
            property' and `qualified advanced electric transmission
            manufacturing plant' have the meanings provided by section
            1705(a)(5).''.
        (c) Grants.--The Secretary of Energy is authorized to provide
    grants for up to 50 percent of costs incurred in connection with the
    development, construction, acquisition of components for, or
    engineering of a qualified advanced electric transmission property
    defined in paragraph (5) of section 1705(a) of the Energy Policy Act of
    2005 (42 U.S.C. 16515(a)). Such grants may only be made to the first
    project which qualifies under that paragraph. There are authorized to
    be appropriated for purposes of this subsection not more than
    $100,000,000 for fiscal year 2010. The United States shall take no
    equity or other ownership interest in the qualified advanced electric
    transmission manufacturing plant or qualified advanced electric
    transmission property for which funding is provided under this
    subsection.

                Subtitle G--Technical Corrections to Energy Laws

    SEC. 161. TECHNICAL CORRECTIONS TO ENERGY INDEPENDENCE AND SECURITY ACT
                  OF 2007.

        (a) Title III--Energy Savings Through Improved Standards for
    Appliance and Lighting.--(1) Section 325(u) of the Energy Policy and
    Conservation Act (42 U.S.C. 6295(u)) (as amended by section 301(c) of
    the Energy Independence and Security Act of 2007 (121 Stat. 1550)) is
    amended--
                        (A) by redesignating paragraph (7) as paragraph
                    (4); and
                        (B) in paragraph (4) (as so redesignated), by
                    striking ``supplies is'' and inserting ``supply is''.
        (2) Section 302 of the Energy Independence and Security Act of 2007
    (121 Stat. 1551)) is amended--
                (A) in subsection (a), by striking ``end of the paragraph''
            and inserting ``end of subparagraph (A)''; and
                (B) in subsection (b), by striking ``6313(a)'' and
            inserting ``6314(a)''.
        (3) Section 343(a)(1) of the Energy Policy and Conservation Act (42
    U.S.C. 6313(a)(1)) (as amended by section 302(b) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1551)) is amended--
                (A) by striking ``Test procedures'' and all that follows
            through ``At least once'' and inserting ``Test procedures.--At
            least once''; and
                (B) by redesignating clauses (i) and (ii) as subparagraphs
            (A) and (B), respectively (and by moving the margins of such
            subparagraphs 2 ems to the left).
        (4) Section 342(a)(6) of the Energy Policy and Conservation Act (42
    U.S.C. 6313(a)(6)) (as amended by section 305(b)(2) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1554)) is amended--
                (A) in subparagraph (B)--
                        (i) by striking ``If the Secretary'' and inserting
                    the following:
                                ``(i) In general.--If the Secretary'';
                        (ii) by striking ``clause (ii)(II)'' and inserting
                    ``subparagraph (A)(ii)(II)'';
                        (iii) by striking ``clause (i)'' and inserting
                    ``subparagraph (A)(i)''; and
                        (iv) by adding at the end the following:
                                ``(ii) Factors.--In determining whether a
                            standard is economically justified for the
                            purposes of subparagraph (A)(ii)(II), the
                            Secretary shall, after receiving views and
                            comments furnished with respect to the proposed
                            standard, determine whether the benefits of the
                            standard exceed the burden of the proposed
                            standard by, to the maximum extent practicable,
                            considering--
                                        ``(I) the economic impact of the
                                    standard on the manufacturers and on
                                    the consumers of the products subject
                                    to the standard;
                                        ``(II) the savings in operating
                                    costs throughout the estimated average
                                    life of the product in the type (or
                                    class) compared to any increase in the
                                    price of, or in the initial charges
                                    for, or maintenance expenses of, the
                                    products that are likely to result from
                                    the imposition of the standard;
                                        ``(III) the total projected
                                    quantity of energy savings likely to
                                    result directly from the imposition of
                                    the standard;
                                        ``(IV) any lessening of the utility
                                    or the performance of the products
                                    likely to result from the imposition of
                                    the standard;
                                        ``(V) the impact of any lessening
                                    of competition, as determined in
                                    writing by the Attorney General, that
                                    is likely to result from the imposition
                                    of the standard;
                                        ``(VI) the need for national energy
                                    conservation; and
                                        ``(VII) other factors the Secretary
                                    considers relevant.
                                ``(iii) Administration.--
                                        ``(I) Energy use and efficiency.--
                                    The Secretary may not prescribe any
                                    amended standard under this paragraph
                                    that increases the maximum allowable
                                    energy use, or decreases the minimum
                                    required energy efficiency, of a
                                    covered product.
                                        ``(II) Unavailability.--
                                                ``(aa) In general.--The
                                            Secretary may not prescribe an
                                            amended standard under this
                                            subparagraph if the Secretary
                                            finds (and publishes the
                                            finding) that interested
                                            persons have established by a
                                            preponderance of the evidence
                                            that a standard is likely to
                                            result in the unavailability in
                                            the United States in any
                                            product type (or class) of
                                            performance characteristics
                                            (including reliability,
                                            features, sizes, capacities,
                                            and volumes) that are
                                            substantially the same as those
                                            generally available in the
                                            United States at the time of
                                            the finding of the Secretary.
                                                ``(bb) Other types or
                                            classes.--The failure of some
                                            types (or classes) to meet the
                                            criterion established under
                                            this subclause shall not affect
                                            the determination of the
                                            Secretary on whether to
                                            prescribe a standard for the
                                            other types or classes.''; and
                (B) in subparagraph (C)(iv), by striking ``An amendment
            prescribed under this subsection'' and inserting
            ``Notwithstanding subparagraph (D), an amendment prescribed
            under this subparagraph''.
        (5) Section 342(a)(6)(B)(iii) of the Energy Policy and Conservation
    Act (as added by section 306(c) of the Energy Independence and Security
    Act of 2007) is transferred and redesignated as clause (vi) of section
    342(a)(6)(C) of the Energy Policy and Conservation Act (as amended by
    section 305(b)(2) of the Energy Independence and Security Act of 2007).
        (6) Section 340 of the Energy Policy and Conservation Act (42
    U.S.C. 6311) (as amended by sections 312(a)(2) and 314(a) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1564, 1569)) is
    amended by redesignating paragraphs (22) and (23) (as added by section
    314(a) of that Act) as paragraphs (23) and (24), respectively.
        (7) Section 345 of the Energy Policy and Conservation Act (42
    U.S.C. 6316) (as amended by section 312(e) of the Energy Independence
    and Security Act of 2007 (121 Stat. 1567)) is amended--
                (A) by striking ``subparagraphs (B) through (G)'' each
            place it appears and inserting ``subparagraphs (B), (C), (D),
            (I), (J), and (K)'';
                (B) by striking ``part A'' each place it appears and
            inserting ``part B''; and
                (C) in subsection (h)(3), by striking ``section 342(f)(3)''
            and inserting ``section 342(f)(4)''.
        (8) Section 340(13) of the Energy Policy and Conservation Act (42
    U.S.C. 6311(13)) (as amended by section 313(a) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1568)) is amended--
                (A) by striking subparagraphs (A) and (B) and inserting the
            following:
                        ``(A) In general.--The term `electric motor' means
                    any motor that is--
                                ``(i) a general purpose T-frame, single-
                            speed, foot-mounting, polyphase squirrel-cage
                            induction motor of the National Electrical
                            Manufacturers Association, Design A and B,
                            continuous rated, operating on 230/460 volts
                            and constant 60 Hertz line power as defined in
                            NEMA Standards Publication MG1-1987; or
                                ``(ii) a motor incorporating the design
                            elements described in clause (i), but is
                            configured to incorporate one or more of the
                            following variations--
                                        ``(I) U-frame motor;
                                        ``(II) NEMA Design C motor;
                                        ``(III) close-coupled pump motor;
                                        ``(IV) footless motor;
                                        ``(V) vertical solid shaft normal
                                    thrust motor (as tested in a horizontal
                                    configuration);
                                        ``(VI) 8-pole motor; or
                                        ``(VII) poly-phase motor with a
                                    voltage rating of not more than 600
                                    volts (other than 230 volts or 460
                                    volts, or both, or can be operated on
                                    230 volts or 460 volts, or both).'';
                                    and
                (B) by redesignating subparagraphs (C) through (I) as
            subparagraphs (B) through (H), respectively.
        (9)(A) Section 342(b) of the Energy Policy and Conservation Act (42
    U.S.C. 6313(b)) is amended--
        (i) in paragraph (1), by striking ``paragraph (2)'' and inserting
    ``paragraph (3)'';
        (ii) by redesignating paragraphs (2) and (3) as paragraphs (3) and
    (4);
        (iii) by inserting after paragraph (1) the following:
                ``(2) Standards effective beginning december 19, 2010.--
                        ``(A) In general.--Except for definite purpose
                    motors, special purpose motors, and those motors
                    exempted by the Secretary under paragraph (3) and
                    except as provided for in subparagraphs (B), (C), and
                    (D), each electric motor manufactured with power
                    ratings from 1 to 200 horsepower (alone or as a
                    component of another piece of equipment) on or after
                    December 19, 2010, shall have a nominal full load
                    efficiency of not less than the nominal full load
                    efficiency described in NEMA MG-1 (2006) Table 12-12.
                        ``(B) Fire pump electric motors.--Except for those
                    motors exempted by the Secretary under paragraph (3),
                    each fire pump electric motor manufactured with power
                    ratings from 1 to 200 horsepower (alone or as a
                    component of another piece of equipment) on or after
                    December 19, 2010, shall have a nominal full load
                    efficiency that is not less than the nominal full load
                    efficiency described in NEMA MG-1 (2006) Table 12-11.
                        ``(C) NEMA design b electric motors.--Except for
                    those motors exempted by the Secretary under paragraph
                    (3), each NEMA Design B electric motor with power
                    ratings of more than 200 horsepower, but not greater
                    than 500 horsepower, manufactured (alone or as a
                    component of another piece of equipment) on or after
                    December 19, 2010, shall have a nominal full load
                    efficiency of not less than the nominal full load
                    efficiency described in NEMA MG-1 (2006) Table 12-11.
                        ``(D) Motors incorporating certain design
                    elements.--Except for those motors exempted by the
                    Secretary under paragraph (3), each electric motor
                    described in section 340(13)(A)(ii) manufactured with
                    power ratings from 1 to 200 horsepower (alone or as a
                    component of another piece of equipment) on or after
                    December 19, 2010, shall have a nominal full load
                    efficiency of not less than the nominal full load
                    efficiency described in NEMA MG-1 (2006) Table 12-
                    11.''; and
        (iv) in paragraph (3) (as redesignated by clause (ii)), by striking
    ``paragraph (1)'' each place it appears in subparagraphs (A) and (D)
    and inserting ``paragraphs (1) and (2)''.
        (B) Section 313 of the Energy Independence and Security Act of 2007
    (121 Stat. 1568) is repealed.
        (C) The amendments made by--
                (i) subparagraph (A) shall take effect on December 19,
            2010; and
                (ii) subparagraph (B) shall take effect on December 19,
            2007.
        (10) Section 321(30)(D)(i)(III) of the Energy Policy and
    Conservation Act (42 U.S.C. 6291(30)(D)(i)(III)) (as amended by section
    321(a)(1)(A) of the Energy Independence and Security Act of 2007 (121
    Stat. 1574)) is amended by inserting before the semicolon the
    following: ``or, in the case of a modified spectrum lamp, not less than
    232 lumens and not more than 1,950 lumens''.
        (11) Section 321(30)(T) of the Energy Policy and Conservation Act
    (42 U.S.C. 6291(30)(T) (as amended by section 321(a)(1)(B) of the
    Energy Independence and Security Act of 2007 (121 Stat. 1574)) is
    amended--
                (A) in clause (i)--
                        (i) by striking the comma after ``household
                    appliance'' and inserting ``and''; and
                        (ii) by striking ``and is sold at retail,''; and
                (B) in clause (ii), by inserting ``when sold at retail,''
            before ``is designated''.
        (12) Section 325 of the Energy Policy and Conservation Act (42
    U.S.C. 6295) (as amended by sections 321(a)(3)(A) and 322(b) of the
    Energy Independence and Security Act of 2007 (121 Stat. 1577, 1588)) is
    amended by striking subsection (i) and inserting the following:
        ``(i) General Service Fluorescent Lamps, General Service
    Incandescent Lamps, Intermediate Base Incandescent Lamps, Candelabra
    Base Incandescent Lamps, and Incandescent Reflector Lamps.--
                ``(1) Energy efficiency standards.--
                        ``(A) In general.--Each of the following general
                    service fluorescent lamps, general service incandescent
                    lamps, intermediate base incandescent lamps, candelabra
                    base incandescent lamps, and incandescent reflector
                    lamps manufactured after the effective date specified
                    in the tables listed in this subparagraph shall meet or
                    exceed the following lamp efficacy, new maximum
                    wattage, and CRI standards:

                                                   ``FLUORESCENT LAMPS
    ----------------------------------------------------------------------------------------------------------------
                                                                                                      Effective Date
               Lamp Type               Nominal Lamp       Minimum CRI       Minimum Average Lamp        (Period of
                                          Wattage                              Efficacy (LPW)            Months)
    ----------------------------------------------------------------------------------------------------------------
    4-foot medium bi-pin...........        >35 W              69                    75.0                    36
                                           35 W               45                    75.0                    36
    2-foot U-shaped................        >35 W              69                    68.0                    36
                                            35 W              45                    64.0                    36
    8-foot slimline................         65 W              69                    80.0                    18
                                           65 W               45                    80.0                    18
    8-foot high output.............       >100 W              69                    80.0                    18
                                           100 W              45                    80.0                    18
    ----------------------------------------------------------------------------------------------------------------

                         ``INCANDESCENT REFLECTOR LAMPS
    ------------------------------------------------------------------------
                                                              Effective Date
         Nominal Lamp Wattage         Minimum Average Lamp      (Period of
                                         Efficacy (LPW)           Months)
    ------------------------------------------------------------------------
     40-50.......................             10.5                  36
     51-66.......................             11.0                  36
     67-85.......................             12.5                  36
     86-115......................             14.0                  36
    116-155......................             14.5                  36
    156-205......................             15.0                  36
    ------------------------------------------------------------------------

                                          ``GENERAL SERVICE INCANDESCENT LAMPS
    ----------------------------------------------------------------------------------------------------------------
                                                                                             Minimum
                           Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                            Wattage         Lifetime        Date
    ----------------------------------------------------------------------------------------------------------------
    1490-2600                                                                        72     1,000 hrs      1/1/2012
    1050-1489                                                                        53     1,000 hrs      1/1/2013
    750-1049                                                                         43     1,000 hrs      1/1/2014
    310-749                                                                          29     1,000 hrs      1/1/2014
    ----------------------------------------------------------------------------------------------------------------

                                 ``MODIFIED SPECTRUM GENERAL SERVICE INCANDESCENT LAMPS
    ----------------------------------------------------------------------------------------------------------------
                                                                                             Minimum
                           Rated Lumen Ranges                            Maximum Rated        Rated       Effective
                                                                            Wattage         Lifetime        Date
    ----------------------------------------------------------------------------------------------------------------
    1118-1950                                                                        72     1,000 hrs      1/1/2012
    788-1117                                                                         53     1,000 hrs      1/1/2013
    563-787                                                                          43     1,000 hrs      1/1/2014
    232-562                                                                          29     1,000 hrs      1/1/2014
    ----------------------------------------------------------------------------------------------------------------

                        ``(B) Application.--
                                ``(i) Application criteria.--This
                            subparagraph applies to each lamp that--
                                        ``(I) is intended for a general
                                    service or general illumination
                                    application (whether incandescent or
                                    not);
                                        ``(II) has a medium screw base or
                                    any other screw base not defined in
                                    ANSI C81.61-2006;
                                        ``(III) is capable of being
                                    operated at a voltage at least
                                    partially within the range of 110 to
                                    130 volts; and
                                        ``(IV) is manufactured or imported
                                    after December 31, 2011.
                                ``(ii) Requirement.--For purposes of this
                            paragraph, each lamp described in clause (i)
                            shall have a color rendering index that is
                            greater than or equal to--
                                        ``(I) 80 for nonmodified spectrum
                                    lamps; or
                                        ``(II) 75 for modified spectrum
                                    lamps.
                        ``(C) Candelabra incandescent lamps and
                    intermediate base incandescent lamps.--
                                ``(i) Candelabra base incandescent lamps.--
                            Effective beginning January 1, 2012, a
                            candelabra base incandescent lamp shall not
                            exceed 60 rated watts.
                                ``(ii) Intermediate base incandescent
                            lamps.--Effective beginning January 1, 2012, an
                            intermediate base incandescent lamp shall not
                            exceed 40 rated watts.
                        ``(D) Exemptions.--
                                ``(i) Statutory exemptions.--The standards
                            specified in subparagraph (A) shall not apply
                            to the following types of incandescent
                            reflector lamps:
                                        ``(I) Lamps rated at 50 watts or
                                    less that are ER30, BR30, BR40, or ER40
                                    lamps.
                                        ``(II) Lamps rated at 65 watts that
                                    are BR30, BR40, or ER40 lamps.
                                        ``(III) R20 incandescent reflector
                                    lamps rated 45 watts or less.
                                ``(ii) Administrative exemptions.--
                                        ``(I) Petition.--Any person may
                                    petition the Secretary for an exemption
                                    for a type of general service lamp from
                                    the requirements of this subsection.
                                        ``(II) Criteria.--The Secretary may
                                    grant an exemption under subclause (I)
                                    only to the extent that the Secretary
                                    finds, after a hearing and opportunity
                                    for public comment, that it is not
                                    technically feasible to serve a
                                    specialized lighting application (such
                                    as a military, medical, public safety,
                                    or certified historic lighting
                                    application) using a lamp that meets
                                    the requirements of this subsection.
                                        ``(III) Additional criterion.--To
                                    grant an exemption for a product under
                                    this clause, the Secretary shall
                                    include, as an additional criterion,
                                    that the exempted product is unlikely
                                    to be used in a general service
                                    lighting application.
                        ``(E) Extension of coverage.--
                                ``(i) Petition.--Any person may petition
                            the Secretary to establish standards for lamp
                            shapes or bases that are excluded from the
                            definition of general service lamps.
                                ``(ii) Increased sales of exempted lamps.--
                            The petition shall include evidence that the
                            availability or sales of exempted incandescent
                            lamps have increased significantly since the
                            date on which the standards on general service
                            incandescent lamps were established.
                                ``(iii) Criteria.--The Secretary shall
                            grant a petition under clause (i) if the
                            Secretary finds that--
                                        ``(I) the petition presents
                                    evidence that demonstrates that
                                    commercial availability or sales of
                                    exempted incandescent lamp types have
                                    increased significantly since the
                                    standards on general service lamps were
                                    established and likely are being widely
                                    used in general lighting applications;
                                    and
                                        ``(II) significant energy savings
                                    could be achieved by covering exempted
                                    products, as determined by the
                                    Secretary based in part on sales data
                                    provided to the Secretary from
                                    manufacturers and importers.
                                ``(iv) No presumption.--The grant of a
                            petition under this subparagraph shall create
                            no presumption with respect to the
                            determination of the Secretary with respect to
                            any criteria under a rulemaking conducted under
                            this section.
                                ``(v) Expedited proceeding.--If the
                            Secretary grants a petition for a lamp shape or
                            base under this subparagraph, the Secretary
                            shall--
                                        ``(I) conduct a rulemaking to
                                    determine standards for the exempted
                                    lamp shape or base; and
                                        ``(II) complete the rulemaking not
                                    later than 18 months after the date on
                                    which notice is provided granting the
                                    petition.
                        ``(F) Effective dates.--
                                ``(i) In general.--In this paragraph,
                            except as otherwise provided in a table
                            contained in subparagraph (A) or in clause
                            (ii), the term `effective date' means the last
                            day of the month specified in the table that
                            follows October 24, 1992.
                                ``(ii) Special effective dates.--
                                        ``(I) ER, br, and bpar lamps.--The
                                    standards specified in subparagraph (A)
                                    shall apply with respect to ER
                                    incandescent reflector lamps, BR
                                    incandescent reflector lamps, BPAR
                                    incandescent reflector lamps, and
                                    similar bulb shapes on and after
                                    January 1, 2008, or the date that is
                                    180 days after the date of enactment of
                                    the Energy Independence and Security
                                    Act of 2007.
                                        ``(II) Lamps between 2.25-2.75
                                    inches in diameter.--The standards
                                    specified in subparagraph (A) shall
                                    apply with respect to incandescent
                                    reflector lamps with a diameter of more
                                    than 2.25 inches, but not more than
                                    2.75 inches, on and after the later of
                                    January 1, 2008, or the date that is
                                    180 days after the date of enactment of
                                    the Energy Independence and Security
                                    Act of 2007.
                ``(2) Compliance with existing law.--Notwithstanding
            section 332(a)(5) and section 332(b), it shall not be unlawful
            for a manufacturer to sell a lamp that is in compliance with
            the law at the time the lamp was manufactured.
                ``(3) Rulemaking before october 24, 1995.--
                        ``(A) In general.--Not later than 36 months after
                    October 24, 1992, the Secretary shall initiate a
                    rulemaking procedure and shall publish a final rule not
                    later than the end of the 54-month period beginning on
                    October 24, 1992, to determine whether the standards
                    established under paragraph (1) should be amended.
                        ``(B) Administration.--The rule shall contain the
                    amendment, if any, and provide that the amendment shall
                    apply to products manufactured on or after the 36-month
                    period beginning on the date on which the final rule is
                    published.
                ``(4) Rulemaking before october 24, 2000.--
                        ``(A) In general.--Not later than 8 years after
                    October 24, 1992, the Secretary shall initiate a
                    rulemaking procedure and shall publish a final rule not
                    later than 9 years and 6 months after October 24, 1992,
                    to determine whether the standards in effect for
                    fluorescent lamps and incandescent lamps should be
                    amended.
                        ``(B) Administration.--The rule shall contain the
                    amendment, if any, and provide that the amendment shall
                    apply to products manufactured on or after the 36-month
                    period beginning on the date on which the final rule is
                    published.
                ``(5) Rulemaking for additional general service fluorescent
            lamps.--
                        ``(A) In general.--Not later than the end of the
                    24-month period beginning on the date labeling
                    requirements under section 324(a)(2)(C) become
                    effective, the Secretary shall--
                                ``(i) initiate a rulemaking procedure to
                            determine whether the standards in effect for
                            fluorescent lamps and incandescent lamps should
                            be amended so that the standards would be
                            applicable to additional general service
                            fluorescent lamps; and
                                ``(ii) publish, not later than 18 months
                            after initiating the rulemaking, a final rule
                            including the amended standards, if any.
                        ``(B) Administration.--The rule shall provide that
                    the amendment shall apply to products manufactured
                    after a date which is 36 months after the date on which
                    the rule is published.
                ``(6) Standards for general service lamps.--
                        ``(A) Rulemaking before january 1, 2014.--
                                ``(i) In general.--Not later than January
                            1, 2014, the Secretary shall initiate a
                            rulemaking procedure to determine whether--
                                        ``(I) standards in effect for
                                    general service lamps should be
                                    amended; and
                                        ``(II) the exclusions for certain
                                    incandescent lamps should be maintained
                                    or discontinued based, in part, on
                                    excluded lamp sales collected by the
                                    Secretary from manufacturers.
                                ``(ii) Scope.--The rulemaking--
                                        ``(I) shall not be limited to
                                    incandescent lamp technologies; and
                                        ``(II) shall include consideration
                                    of a minimum standard of 45 lumens per
                                    watt for general service lamps.
                                ``(iii) Amended standards.--If the
                            Secretary determines that the standards in
                            effect for general service lamps should be
                            amended, the Secretary shall publish a final
                            rule not later than January 1, 2017, with an
                            effective date that is not earlier than 3 years
                            after the date on which the final rule is
                            published.
                                ``(iv) Phased-in effective dates.--The
                            Secretary shall consider phased-in effective
                            dates under this subparagraph after
                            considering--
                                        ``(I) the impact of any amendment
                                    on manufacturers, retiring and
                                    repurposing existing equipment,
                                    stranded investments, labor contracts,
                                    workers, and raw materials; and
                                        ``(II) the time needed to work with
                                    retailers and lighting designers to
                                    revise sales and marketing strategies.
                                ``(v) Backstop requirement.--If the
                            Secretary fails to complete a rulemaking in
                            accordance with clauses (i) through (iv) or if
                            the final rule does not produce savings that
                            are greater than or equal to the savings from a
                            minimum efficacy standard of 45 lumens per
                            watt, effective beginning January 1, 2020, the
                            Secretary shall prohibit the manufacture of any
                            general service lamp that does not meet a
                            minimum efficacy standard of 45 lumens per
                            watt.
                                ``(vi) State preemption.--Neither section
                            327(c) nor any other provision of law shall
                            preclude California or Nevada from adopting,
                            effective beginning on or after January 1,
                            2018--
                                        ``(I) a final rule adopted by the
                                    Secretary in accordance with clauses
                                    (i) through (iv);
                                        ``(II) if a final rule described in
                                    subclause (I) has not been adopted, the
                                    backstop requirement under clause (v);
                                    or
                                        ``(III) in the case of California,
                                    if a final rule described in subclause
                                    (I) has not been adopted, any
                                    California regulations relating to
                                    these covered products adopted pursuant
                                    to State statute in effect as of the
                                    date of enactment of the Energy
                                    Independence and Security Act of 2007.
                        ``(B) Rulemaking before january 1, 2020.--
                                ``(i) In general.--Not later than January
                            1, 2020, the Secretary shall initiate a
                            rulemaking procedure to determine whether--
                                        ``(I) standards in effect for
                                    general service lamps should be
                                    amended; and
                                        ``(II) the exclusions for certain
                                    incandescent lamps should be maintained
                                    or discontinued based, in part, on
                                    excluded lamp sales data collected by
                                    the Secretary from manufacturers.
                                ``(ii) Scope.--The rulemaking shall not be
                            limited to incandescent lamp technologies.
                                ``(iii) Amended standards.--If the
                            Secretary determines that the standards in
                            effect for general service lamps should be
                            amended, the Secretary shall publish a final
                            rule not later than January 1, 2022, with an
                            effective date that is not earlier than 3 years
                            after the date on which the final rule is
                            published.
                                ``(iv) Phased-in effective dates.--The
                            Secretary shall consider phased-in effective
                            dates under this subparagraph after
                            considering--
                                        ``(I) the impact of any amendment
                                    on manufacturers, retiring and
                                    repurposing existing equipment,
                                    stranded investments, labor contracts,
                                    workers, and raw materials; and
                                        ``(II) the time needed to work with
                                    retailers and lighting designers to
                                    revise sales and marketing strategies.
                ``(7) Federal actions.--
                        ``(A) Comments of secretary.--
                                ``(i) In general.--With respect to any lamp
                            to which standards are applicable under this
                            subsection or any lamp specified in section
                            346, the Secretary shall inform any Federal
                            entity proposing actions that would adversely
                            impact the energy consumption or energy
                            efficiency of the lamp of the energy
                            conservation consequences of the action.
                                ``(ii) Consideration.--The Federal entity
                            shall carefully consider the comments of the
                            Secretary.
                        ``(B) Amendment of standards.--Notwithstanding
                    section 325(n)(1), the Secretary shall not be
                    prohibited from amending any standard, by rule, to
                    permit increased energy use or to decrease the minimum
                    required energy efficiency of any lamp to which
                    standards are applicable under this subsection if the
                    action is warranted as a result of other Federal action
                    (including restrictions on materials or processes) that
                    would have the effect of either increasing the energy
                    use or decreasing the energy efficiency of the product.
                ``(8) Compliance.--
                        ``(A) In general.--Not later than the date on which
                    standards established pursuant to this subsection
                    become effective, or, with respect to high-intensity
                    discharge lamps covered under section 346, the
                    effective date of standards established pursuant to
                    that section, each manufacturer of a product to which
                    the standards are applicable shall file with the
                    Secretary a laboratory report certifying compliance
                    with the applicable standard for each lamp type.
                        ``(B) Contents.--The report shall include the lumen
                    output and wattage consumption for each lamp type as an
                    average of measurements taken over the preceding 12-
                    month period.
                        ``(C) Other lamp types.--With respect to lamp types
                    that are not manufactured during the 12-month period
                    preceding the date on which the standards become
                    effective, the report shall--
                                ``(i) be filed with the Secretary not later
                            than the date that is 12 months after the date
                            on which manufacturing is commenced; and
                                ``(ii) include the lumen output and wattage
                            consumption for each such lamp type as an
                            average of measurements taken during the 12-
                            month period.''.
        (13) Section 325(l)(4)(A) of the Energy Policy and Conservation Act
    (42 U.S.C. 6295(l)(4)(A)) (as amended by section 321(a)(3)(B) of the
    Energy Independence and Security Act of 2007 (121 Stat. 1581)) is
    amended by striking ``only''.
        (14) Section 327(b)(1)(B) of the Energy Policy and Conservation Act
    (42 U.S.C. 6297(b)(1)(B)) (as amended by section 321(d)(3) of the
    Energy Independence and Security Act of 2007 (121 Stat. 1585)) is
    amended--
                (A) in clause (i), by inserting ``and'' after the semicolon
            at the end;
                (B) in clause (ii), by striking ``; and'' and inserting a
            period; and
                (C) by striking clause (iii).
        (15) Section 321(e) of the Energy Independence and Security Act of
    2007 (121 Stat. 1586) is amended--
                (A) in the matter preceding paragraph (1), by striking ``is
            amended'' and inserting ``(as amended by section 306(b)) is
            amended''; and
                (B) by striking paragraphs (1) and (2) and inserting the
            following:
                ``(1) in paragraph (5), by striking `or' after the
            semicolon at the end;
                ``(2) in paragraph (6), by striking the period at the end
            and inserting `; or'; and''.
        (16) Section 332(a) of the Energy Policy and Conservation Act (42
    U.S.C. 6302(a)) (as amended by section 321(e) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1586)) is amended by
    redesignating the second paragraph (6) as paragraph (7).
        (17) Section 321(30)(C)(ii) of the Energy Policy and Conservation
    Act (42 U.S.C. 6291(30)(C)(ii)) (as amended by section 322(a)(1)(B) of
    the Energy Independence and Security Act of 2007 (121 Stat. 1587)) is
    amended by inserting a period after ``40 watts or higher''.
        (18) Section 322(b) of the Energy Independence and Security Act of
    2007 (121 Stat. 1588)) is amended by striking ``6995(i)'' and inserting
    ``6295(i)''.
        (19) Section 327(c) of the Energy Policy and Conservation Act (42
    U.S.C. 6297(c)) (as amended by sections 324(f) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1594)) is amended--
                (A) in paragraph (6), by striking ``or'' after the
            semicolon at the end;
                (B) in paragraph (8)(B), by striking ``and'' after the
            semicolon at the end;
                (C) in paragraph (9)--
                        (i) by striking ``except that--'' and all that
                    follows through ``if the Secretary fails to issue'' and
                    inserting ``except that if the Secretary fails to
                    issue'';
                        (ii) by redesignating clauses (i) and (ii) as
                    subparagraphs (A) and (B), respectively (and by moving
                    the margins of such subparagraphs 2 ems to the left);
                    and
                        (iii) by striking the period at the end and
                    inserting a semicolon; and
                (D) by adding at the end the following:
                ``(10) is a regulation for general service lamps that
            conforms with Federal standards and effective dates;
                ``(11) is an energy efficiency standard for general service
            lamps enacted into law by the State of Nevada prior to December
            19, 2007, if the State has not adopted the Federal standards
            and effective dates pursuant to subsection (b)(1)(B)(ii); or''.
        (20) Section 325(b) of the Energy Independence and Security Act of
    2007 (121 Stat. 1596)) is amended by striking ``6924(c)'' and inserting
    ``6294(c)''.
        (b) Title IV--Energy Savings in Buildings and Industry.--(1)
    Section 401 of the Energy Independence and Security Act of 2007 (42
    U.S.C. 17061) is amended--
                (A) in paragraph (2), by striking ``484'' and inserting
            ``494''; and
                (B) in paragraph (13), by striking ``Agency'' and inserting
            ``Administration''.
        (2) Section 422 of the Energy Conservation and Production Act (42
    U.S.C. 6872) (as amended by section 411(a) of the Energy Independence
    and Security Act of 2007 (121 Stat. 1600)) is amended by striking 1 of
    the 2 periods at the end of paragraph (5).
        (3) Section 305(a)(3)(D)(i) of the Energy Conservation and
    Production Act (42 U.S.C. 6834(a)(3)(D)(i)) (as amended by section
    433(a) of the Energy Independence and Security Act of 2007 (121 Stat.
    1612)) is amended--
                (A) in subclause (I)--
                        (i) by striking ``in fiscal year 2003 (as measured
                    by Commercial Buildings Energy Consumption Survey or
                    Residential Energy Consumption Survey data from the
                    Energy Information Agency'' and inserting ``as measured
                    by the calendar year 2003 Commercial Buildings Energy
                    Consumption Survey or the calendar year 2005
                    Residential Energy Consumption Survey data from the
                    Energy Information Administration''; and
                        (ii) in the table at the end, by striking ``Fiscal
                    Year'' and inserting ``Calendar Year''; and
                (B) in subclause (II)--
                        (i) by striking ``(II) Upon petition'' and
                    inserting the following:
                                        ``(II) Downward adjustment of
                                    numeric requirement.--
                                                ``(aa) In general.--On
                                            petition''; and
                        (ii) by striking the last sentence and inserting
                    the following:
                                                ``(bb) Exceptions to
                                            requirement for concurrence of
                                            secretary.--

                                                        ``(AA) In
                                                    general.--The
                                                    requirement to petition
                                                    and obtain the
                                                    concurrence of the
                                                    Secretary under this
                                                    subclause shall not
                                                    apply to any Federal
                                                    building with respect
                                                    to which the
                                                    Administrator of
                                                    General Services is
                                                    required to transmit a
                                                    prospectus to Congress
                                                    under section 3307 of
                                                    title 40, United States
                                                    Code, or to any other
                                                    Federal building
                                                    designed, constructed,
                                                    or renovated by the
                                                    Administrator if the
                                                    Administrator
                                                    certifies, in writing,
                                                    that meeting the
                                                    applicable numeric
                                                    requirement under
                                                    subclause (I) with
                                                    respect to the Federal
                                                    building would be
                                                    technically
                                                    impracticable in light
                                                    of the specific
                                                    functional needs for
                                                    the building.

                                                        ``(BB)
                                                    Adjustment.--In the
                                                    case of a building
                                                    described in subitem
                                                    (AA), the Administrator
                                                    may adjust the
                                                    applicable numeric
                                                    requirement of
                                                    subclause (I) downward
                                                    with respect to the
                                                    building.''.

        (4) Section 436(c)(3) of the Energy Independence and Security Act
    of 2007 (42 U.S.C. 17092(c)(3)) is amended by striking ``474'' and
    inserting ``494''.
        (5) Section 440 of the Energy Independence and Security Act of 2007
    (42 U.S.C. 17096) is amended by striking ``and 482''.
        (6) Section 373(c) of the Energy Policy and Conservation Act (42
    U.S.C. 6343(c)) (as amended by section 451(a) of the Energy
    Independence and Security Act of 2007 (121 Stat. 1628)) is amended by
    striking ``Administrator'' and inserting ``Secretary''.
        (c) Date of Enactment.--Section 1302 of the Energy Independence and
    Security Act of 2007 (42 U.S.C. 17382) is amended in the first sentence
    by striking ``enactment'' and inserting ``the date of enactment of this
    Act''.
        (d) Reference.--Section 1306(c)(3) of the Energy Independence and
    Security Act of 2007 (42 U.S.C. 17386(c)(3)) is amended by striking
    ``section 1307 (paragraph (17) of section 111(d) of the Public Utility
    Regulatory Policies Act of 1978)'' and inserting ``paragraph (19) of
    section 111(d) of the Public Utility Regulatory Policies Act of 1978
    (16 U.S.C. 2621(d))''.
        (e) Effective Date.--This section and the amendments made by this
    section take effect as if included in the Energy Independence and
    Security Act of 2007 (Public Law 110-140; 121 Stat. 1492).

    SEC. 162. TECHNICAL CORRECTIONS TO ENERGY POLICY ACT OF 2005.

        (a) Title I--Energy Efficiency.--Section 325(g)(8)(C)(ii) of the
    Energy Policy and Conservation Act (42 U.S.C. 6295(g)(8)(C)(ii)) (as
    added by section 135(c)(2)(B) of the Energy Policy Act of 2005) is
    amended by striking ``20F'' and inserting ``-20F''.
        (b) Effective Date.--This section and the amendments made by this
    section take effect as if included in the Energy Policy Act of 2005
    (Public Law 109-58; 119 Stat. 594).

             Subtitle H--Energy and Efficiency Centers and Research

    SEC. 171. ENERGY INNOVATION HUBS.

        (a) Purpose.--The Secretary shall carry out a program to establish
    Energy Innovation Hubs to enhance the Nation's economic, environmental,
    and energy security by promoting commercial application of clean,
    indigenous energy alternatives to oil and other fossil fuels, reducing
    greenhouse gas emissions, and ensuring that the United States maintains
    a technological lead in the development and commercial application of
    state-of-the-art energy technologies. To achieve these purposes the
    program shall--
                (1) leverage the expertise and resources of the university
            and private research communities, industry, venture capital,
            national laboratories, and other participants in energy
            innovation to support cross-disciplinary research and
            development in areas not being served by the private sector in
            order to develop and transfer innovative clean energy
            technologies into the marketplace;
                (2) expand the knowledge base and human capital necessary
            to transition to a low-carbon economy; and
                (3) promote regional economic development by cultivating
            clusters of clean energy technology firms, private research
            organizations, suppliers, and other complementary groups and
            businesses.
        (b) Definitions.--For purposes of this section:
                (1) Allowance.--The term ``allowance'' means an emission
            allowance established under section 721 of the Clean Air Act
            (as added by section 311 of this Act).
                (2) Clean energy technology.--The term ``clean energy
            technology'' means a technology that--
                        (A) produces energy from solar, wind, geothermal,
                    biomass, tidal, wave, ocean, and other renewable energy
                    resources (as such term is defined in section 610 of
                    the Public Utility Regulatory Policies Act of 1978);
                        (B) more efficiently transmits, distributes, or
                    stores energy;
                        (C) enhances energy efficiency for buildings and
                    industry, including combined heat and power;
                        (D) enables the development of a Smart Grid (as
                    described in section 1301 of the Energy Independence
                    and Security Act of 2007 (42 U.S.C. 17381)), including
                    integration of renewable energy resources and
                    distributed generation, demand response, demand side
                    management, and systems analysis;
                        (E) produces an advanced or sustainable material
                    with energy or energy efficiency applications;
                        (F) enhances water security through improved water
                    management, conservation, distribution, and end use
                    applications; or
                        (G) improves energy efficiency for transportation,
                    including electric vehicles.
                (3) Cluster.--The term ``cluster'' means a network of
            entities directly involved in the research, development,
            finance, and commercialization of clean energy technologies
            whose geographic proximity facilitates utilization and sharing
            of skilled human resources, infrastructure, research
            facilities, educational and training institutions, venture
            capital, and input suppliers.
                (4) Hub.--The term ``Hub'' means an Energy Innovation Hub
            established in accordance with this section.
                (5) Project.--The term ``project'' means an activity with
            respect to which a Hub provides support under subsection (e).
                (6) Qualifying entity.--The term ``qualifying entity''
            means each of the following:
                        (A) A research university.
                        (B) A State or Federal institution with a focus on
                    the advancement of clean energy technologies.
                        (C) A nongovernmental organization with research or
                    commercialization expertise in clean energy technology
                    development.
                (7) Secretary.--The term ``Secretary'' means the Secretary
            of Energy.
                (8) Technology development focus.--The term ``technology
            development focus'' means the unique technology development
            areas in which a Hub will specialize, and may include solar
            electricity, fuels from solar energy, batteries and energy
            storage, electricity grid systems and devices, energy efficient
            building systems and design, advanced materials, modeling and
            simulation, and other clean energy technology development areas
            designated by the Secretary.
                (9) Translational research.--The term ``translational
            research'' means coordination of basic or applied research with
            technical and commercial applications to enable promising
            discoveries or inventions to attract investment sufficient for
            market penetration and diffusion.
                (10) Vintage year.--The term ``vintage year'' has the
            meaning given that term in section 700 of the Clean Air Act (as
            added by section 312 of this Act).
        (c) Role of the Secretary.--The Secretary shall--
                (1) have ultimate responsibility for, and oversight of, all
            aspects of the program under this section;
                (2) provide for the distribution of allowances allocated
            under section 782(h)(1) of the Clean Air Act (as added by
            section 321 of this Act) to support the establishment of 8
            Hubs, each with a unique designated technology development
            focus, pursuant to this section;
                (3) coordinate the innovation activities of Hubs with those
            occurring through other Department of Energy entities,
            including the National Laboratories, the Advanced Research
            Projects Agency--Energy, and Energy Frontier Research
            Collaborations, and within industry, including by annually--
                        (A) issuing guidance regarding national energy
                    research and development priorities and strategic
                    objectives; and
                        (B) convening a conference of staff of the
                    Department of Energy and representatives from such
                    other entities to share research results, program
                    plans, and opportunities for collaboration.
        (d) Entities Eligible for Support.--A consortium shall be eligible
    to receive allowances to support the establishment of a Hub under this
    section if--
                (1) it is composed of--
                        (A) 2 research universities with a combined annual
                    research budget of $500,000,000; and
                        (B) 1 or more additional qualifying entities;
                (2) its members have established a binding agreement that
            documents--
                        (A) the structure of the partnership agreement;
                        (B) a governance and management structure to enable
                    cost-effective implementation of the program;
                        (C) an intellectual property management policy;
                        (D) a conflicts of interest policy consistent with
                    subsection (e)(4);
                        (E) an accounting structure that meets the
                    requirements of the Department of Energy and can be
                    audited under subsection (f)(5); and
                        (F) that it has an Advisory Board consistent with
                    subsection (e)(3);
                (3) it receives financial contributions from States,
            consortium participants, or other non-Federal sources, to be
            used to support project awards pursuant to subsection (e);
                (4) it is part of an existing cluster or demonstrates high
            potential to develop a new cluster; and
                (5) it operates as a nonprofit organization.
        (e) Energy Innovation Hubs.--
                (1) Role.--Hubs receiving allowances under this section
            shall support translational research activities leading to
            commercial application of clean energy technologies, in
            accordance with the purposes of this section, through issuance
            of awards to projects managed by qualifying entities and other
            entities meeting the Hub's project criteria, including national
            laboratories. Each such Hub shall--
                        (A) develop and publish for public review and
                    comment proposed plans, programs, project selection
                    criteria, and terms for individual project awards under
                    this subsection;
                        (B) submit an annual report to the Secretary
                    summarizing the Hub's activities, organizational
                    expenditures, and Board members, which shall include a
                    certification of compliance with conflict of interest
                    policies and a description of each project in the
                    research portfolio;
                        (C) establish policies--
                                (i) regarding intellectual property
                            developed as a result of Hub awards and other
                            forms of technology support that encourage
                            individual ingenuity and invention while
                            speeding technology transfer and facilitating
                            the establishment of rapid commercialization
                            pathways;
                                (ii) to prevent resources provided to the
                            Hub from being used to displace private sector
                            investment otherwise likely to occur, including
                            investment from private sector entities that
                            are members of the consortium;
                                (iii) to facilitate the participation of
                            private investment firms or other private
                            entities that invest in clean energy
                            technologies to perform due diligence on award
                            proposals, to participate in the award review
                            process, and to provide guidance to projects
                            supported by the Hub; and
                                (iv) to facilitate the participation of
                            entrepreneurs with a demonstrated history of
                            developing and commercializing clean energy
                            technologies;
                        (D) oversee project solicitations, review proposed
                    projects, and select projects for awards; and
                        (E) monitor project implementation.
                (2) Distribution of awards by hubs.--A Hub shall distribute
            awards under this subsection to support clean energy technology
            projects conducting translational research and related
            activities, provided that at least 50 percent of such support
            shall be provided to projects related to the Hub's technology
            development focus.
                (3) Advisory boards.--
                        (A) In general.--Each Hub shall establish an
                    Advisory Board, the members of which shall have
                    extensive and relevant scientific, technical, industry,
                    financial, or research management expertise. The
                    Advisory Board shall review the Hub's proposed plans,
                    programs, project selection criteria, and projects and
                    shall ensure that projects selected for awards meet the
                    conflict of interest policies of the Hub. Advisory
                    Board members other than those representing consortium
                    members shall serve for no more than 3 years. All
                    Advisory Board members shall comply with the Hub's
                    conflict of interest policies and procedures.
                        (B) Members.--Each Advisory Board shall consist
                    of--
                                (i) 5 members selected by the consortium's
                            research universities;
                                (ii) 2 members selected by the consortium's
                            other qualifying entities;
                                (iii) 2 members selected at large by other
                            Advisory Board members to represent the
                            entrepreneur and venture capital communities;
                            and
                                (iv) 1 member appointed by the Secretary.
                        (D) Compensation.--Members of an Advisory Board may
                    receive reimbursement for travel expenses and a
                    reasonable stipend.
                (4) Conflict of interest.--
                        (A) Procedures.--Hubs shall establish procedures to
                    ensure that any employee or consortia designee for Hub
                    activities who serves in a decisionmaking capacity
                    shall--
                                (i) disclose any financial interests in, or
                            financial relationships with, applicants for or
                            recipients of awards under this subsection,
                            including those of his or her spouse or minor
                            child, unless such relationships or interests
                            would be considered to be remote or
                            inconsequential; and
                                (ii) recuse himself or herself from any
                            funding decision for projects in which he or
                            she has a personal financial interest.
                        (B) Disqualification and revocation.--The Secretary
                    may disqualify an application or revoke allowances
                    distributed to the Hub or awards provided under this
                    subsection, if cognizant officials of the Hub fail to
                    comply with procedures required under subparagraph (A).
        (f) Distribution of Allowances to Energy Innovation Hubs.--
                (1) Distribution of allowances.--Not later than September
            30 of 2011 and each calendar year thereafter through 2049, the
            Secretary shall, in accordance with the requirements of this
            section, distribute to eligible consortia allowances allocated
            for the following vintage year under section 782(h)(1) of the
            Clean Air Act (as added by section 321 of this Act). Not less
            than 10 percent and not more than 30 percent of the allowances
            available for distribution in any given year shall be
            distributed to support any individual Hub under this section.
                (2) Selection and schedule.--Allowances to support the
            establishment of a Hub shall be distributed to eligible
            consortia (as defined in subsection (d)) selected through a
            competitive process. Not later than 120 days after the date of
            enactment of this Act, the Secretary shall solicit proposals
            from eligible consortia to establish Hubs, which shall be
            submitted not later than 180 days after the date of enactment
            of this Act. The Secretary shall select the program consortia
            not later than 270 days after the date of enactment of this
            Act. For at least 3 awards to consortia under this section, the
            Secretary shall give special consideration to applications in
            which 1 or more of the institutions under subsection (d)(1)(A)
            are 1890 Land Grant Institutions (as defined in section 2 of
            the Agricultural Research, Extension, and Education Reform Act
            of 1998 (7 U.S.C. 7061)), Predominantly Black Institutions (as
            defined in section 318 of the Higher Education Act of 1965 (20
            U.S.C. 1059e)), Tribal Colleges or Universities (as defined in
            section 316(b) of the Higher Education Act of 1965 (20 U.S.C.
            1059c(b)), or Hispanic Serving Institutions (as defined in
            section 318 of the Higher Education Act of 1965 (20 U.S.C.
            1059e)).
                (3) Amount and term of awards.--For each Hub selected to
            receive an award under this subsection, the Secretary shall
            define a quantity of allowances that shall be distributed to
            such Hub each year for an initial period not to exceed 5 years.
            The Secretary may extend the term of such award by up to 5
            additional years, and a Hub may compete to receive an increase
            in the quantity of allowances per year that it shall receive
            during any such extension. A Hub shall be eligible to compete
            for a new award after the expiration of the term of any award,
            including any extension of such term, under this subsection.
                (4) Use of allowances.--Allowances distributed under this
            section shall be used exclusively to support project awards
            pursuant to subsection (e)(1) and (2), provided that a Hub may
            use not more than 10 percent of the value of such allowances
            for its administrative expenses related to making such awards.
            Allowances distributed under this section shall not be used for
            construction of new buildings or facilities for Hubs, and
            construction of new buildings or facilities shall not be
            considered as part of the non-Federal share of a cost sharing
            agreement under this section.
                (5) Audit.--Each Hub shall conduct, in accordance with such
            requirements as the Secretary may prescribe, an annual audit to
            determine the extent to which allowances distributed to the Hub
            under this subsection, and awards under subsection (e), have
            been utilized in a manner consistent with this section. The
            auditor shall transmit a report of the results of the audit to
            the Secretary and to the Government Accountability Office. The
            Secretary shall include such report in an annual report to
            Congress, along with a plan to remedy any deficiencies cited in
            the report. The Government Accountability Office may review
            such audits as appropriate and shall have full access to the
            books, records, and personnel of the Hub to ensure that
            allowances distributed to the Hub under this subsection, and
            awards made under subsection (e), have been utilized in a
            manner consistent with this section.
                (6) Revocation of allowances.--The Secretary shall have
            authority to review awards made under this subsection and to
            revoke such awards if the Secretary determines that a Hub has
            used the award in a manner not consistent with the requirements
            of this section.

    SEC. 172. ADVANCED ENERGY RESEARCH.

        (a) Definitions.--For purposes of this section:
                (1) Allowance.--The term ``allowance'' means an emission
            allowance established under section 721 of the Clean Air Act
            (as added by section 311 of this Act).
                (2) Director.--The term ``Director'' means Director of the
            Advanced Research Projects Agency-Energy.
        (b) In General.--Not later than September 30 of 2011 and each
    calendar year thereafter through 2049, the Director shall distribute
    allowances allocated for the following vintage year under section
    782(h)(2) of the Clean Air Act (as added by section 321 of this Act).
    Such allowances shall be distributed on a competitive basis to
    institutions of higher education, companies, research foundations,
    trade and industry research collaborations, or consortia of such
    entities, or other appropriate research and development entities to
    achieve the goals of the Advanced Research Projects Agency-Energy (as
    described in section 5012(c) of the America COMPETES Act) through
    targeted acceleration of--
                (1) novel early-stage energy research with possible
            technology applications;
                (2) development of techniques, processes, and technologies,
            and related testing and evaluation;
                (3) development of manufacturing processes for
            technologies; and
                (4) demonstration and coordination with nongovernmental
            entities for commercial applications of technologies and
            research applications.
        (c) Responsibilities.--The Director shall be responsible for
    assessing the success of programs and terminating programs carried out
    under this section that are not achieving the goals of the programs,
    consistent with 5012(e)(2) and (4) of the America COMPETES Act. The
    Director shall designate program managers whose responsibilities are
    consistent with 5012(f)(1)(B) of the America COMPETES Act. The
    Director's reporting and coordination requirements established through
    5012(g) and (h) of the America COMPETES Act shall apply to activities
    funded through this section.
        (d) Supplement Not Supplant.--Assistance provided under this
    section shall be used to supplement, and not to supplant, any other
    Federal resources available to carry out activities described in this
    section.

    SEC. 173. BUILDING ASSESSMENT CENTERS.

        (a) In General.--The Secretary of Energy (in this section referred
    to as the ``Secretary'') shall provide funding to institutions of
    higher education for Building Assessment Centers to--
                (1) identify opportunities for optimizing energy efficiency
            and environmental performance in existing buildings;
                (2) promote high-efficiency building construction
            techniques and materials options;
                (3) promote applications of emerging concepts and
            technologies in commercial and institutional buildings;
                (4) train engineers, architects, building scientists, and
            building technicians in energy-efficient design and operation;
                (5) assist local community colleges, trade schools,
            registered apprenticeship programs and other accredited
            training programs in training building technicians;
                (6) promote research and development for the use of
            alternative energy sources to supply heat and power, for
            buildings, particularly energy-intensive buildings; and
                (7) coordinate with and assist State-accredited technical
            training centers and community colleges, while ensuring
            appropriate services to all regions of the United States.
        (b) Coordination With Regional Centers for Energy and Environmental
    Knowledge and Outreach.--A Building Assessment Center may serve as a
    Center for Energy and Environmental Knowledge and Outreach established
    pursuant to section 174.
        (c) Coordination and Duplication.--The Secretary shall coordinate
    efforts under this section with other programs of the Department of
    Energy and other Federal agencies to avoid duplication of effort.
        (d) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary to carry out this section $50,000,000 for
    fiscal year 2010 and each fiscal year thereafter.

    SEC. 174. CENTERS FOR ENERGY AND ENVIRONMENTAL KNOWLEDGE AND OUTREACH.

        (a) Regional Centers for Energy and Environmental Knowledge and
    Outreach.--
                (1) Establishment.--The Secretary shall establish not more
            than 10 regional Centers for Energy and Environmental Knowledge
            and Outreach at institutions of higher education to coordinate
            with and advise industrial research and assessment centers,
            Building Assessment Centers, and Clean Energy Application
            Centers located in the region of such Center for Energy and
            Environmental Knowledge and Outreach.
                (2) Technical assistance programs.--Each Center for Energy
            and Environmental Knowledge and Outreach shall consist of at
            least one, new or existing, high performing, of the following:
                        (A) An industrial research and assessment center.
                        (B) A Clean Energy Application Center.
                        (C) A Building Assessment Center.
                (3) Selection criteria.--The Secretary shall select Centers
            for Energy and Environmental Knowledge and Outreach through a
            competitive process, based on the following:
                        (A) Identification of the highest performing
                    industrial research and assessment centers, Clean
                    Energy Application Centers, and Building Assessment
                    Centers.
                        (B) The degree to which an institution of higher
                    education maintains credibility among regional private
                    sector organizations such as trade associations,
                    engineering associations, and environmental
                    organizations.
                        (C) The degree to which an institution of higher
                    education is providing or has provided technical
                    assistance, academic leadership, and market leadership
                    in the energy arena in a manner that is consistent with
                    the areas of focus of industrial research and
                    assessment centers, Clean Energy Application Centers,
                    and Building Assessment Centers.
                        (D) The presence of an additional industrial
                    research and assessment center, Clean Energy
                    Application Center, or Building Assessment Center at
                    the institution of higher education.
                (4) Geographic diversity.--In selecting Centers for Energy
            and Environmental Knowledge and Outreach under this subsection,
            the Secretary shall ensure such Centers are distributed
            geographically in a relatively uniform manner to ensure all
            regions of the Nation are represented.
                (5) Regional leadership.--Each Center for Energy and
            Environmental Knowledge and Outreach shall, to the extent
            possible, provide leadership to all other industrial research
            and assessment centers, Clean Energy Application Centers, and
            Building Assessment Centers located in the Center's geographic
            region, as determined by the Secretary. Such leadership shall
            include--
                        (A) developing regional goals specific to the
                    purview of the industrial research and assessment
                    centers, Clean Energy Application Centers, and Building
                    Assessment Centers programs;
                        (B) developing regionally specific technical
                    resources; and
                        (C) outreach to interested parties in the region to
                    inform them of the information, resources, and services
                    available through the associated industrial research
                    and assessment centers, Clean Energy Application
                    Centers, and Building Assessment Centers.
                (6) Further coordination.--To increase the value and
            capabilities of the regionally associated industrial research
            and assessment centers, Clean Energy Application Centers, and
            Building Assessment Centers programs, Centers for Energy and
            Environmental Knowledge and Outreach shall--
                        (A) coordinate with Manufacturing Extension
                    Partnership Centers of the National Institute of
                    Science and Technology;
                        (B) coordinate with the relevant programs in the
                    Department of Energy, including the Building Technology
                    Program and Industrial Technologies Program;
                        (C) increase partnerships with the National
                    Laboratories of the Department of Energy to leverage
                    the expertise and technologies of the National
                    Laboratories to achieve the goals of the industrial
                    research and assessment centers, Clean Energy
                    Application Centers, and Building Assessment Centers;
                        (D) work with relevant municipal, county, and State
                    economic development entities to leverage relevant
                    financial incentives for capital investment and other
                    policy tools for the protection and growth of local
                    business and industry;
                        (E) partner with local professional and private
                    trade associations and business development interests
                    to leverage existing knowledge of local business
                    challenges and opportunities;
                        (F) work with energy utilities and other
                    administrators of publicly funded energy programs to
                    leverage existing energy efficiency and clean energy
                    programs;
                        (G) identify opportunities for reducing greenhouse
                    gas emissions; and
                        (H) promote sustainable business practices for
                    those served by the industrial research and assessment
                    centers, Clean Energy Application Centers, and Building
                    Assessment Centers.
                (7) Workforce training.--
                        (A) In general.--The Secretary shall require each
                    Center for Energy and Environmental Knowledge and
                    Outreach to establish or maintain an internship program
                    for the region of such Center, designed to encourage
                    students who perform energy assessments to continue
                    working with a particular company, building, or
                    facility to help implement the recommendations
                    contained in any such assessment provided to such
                    company, building, or facility. Each Center for Energy
                    and Environmental Knowledge and Outreach shall act as
                    internship coordinator to help match students to
                    available opportunities.
                        (B) Federal share.--The Federal share of the cost
                    of carrying out internship programs described under
                    subparagraph (A) shall be 50 percent.
                        (C) Funding.--Subject to the availability of
                    appropriations, of the funds made available to carry
                    out this subsection, the Secretary shall use to carry
                    out this paragraph not less than $5,000,000 for fiscal
                    year 2010 and each fiscal year thereafter.
                (8) Small business loans.--The Administrator of the Small
            Business Administration shall, to the maximum practicable,
            expedite consideration of applications from eligible small
            business concerns for loans under the Small Business Act (15
            U.S.C. 631 et seq.) for loans to implement recommendations of
            any industrial research and assessment center, Clean Energy
            Application Center, or Building Assessment Center.
                (9) Definitions.--In this subsection:
                        (A) Industrial research and assessment center.--The
                    term ``industrial research and assessment center''
                    means a center established or maintained pursuant to
                    section 452(e) of the Energy Independence and Security
                    Act of 2007 (42 U.S.C. 17111(e)).
                        (B) Clean energy application center.--The term
                    ``Clean Energy Application Center'' means a center
                    redesignated and described section under section 375 of
                    the Energy Policy and Conservation Act (42 U.S.C.
                    6345).
                        (C) Building assessment center.--The term
                    ``Building Assessment Center'' means an institution of
                    higher education-based center established pursuant to
                    section 173.
                        (D) Secretary.--The term ``Secretary'' means the
                    Secretary of Energy.
                (10) Funding.--There are authorized to be appropriated to
            the Secretary to carry out this subsection $10,000,000 for
            fiscal year 2010 and each fiscal year thereafter. Subject to
            the availability of appropriations, of the funds made available
            to carry out this subsection, the Secretary shall provide to
            each Center for Energy and Environmental Knowledge and Outreach
            not less than $500,000 for fiscal year 2010 and each fiscal
            year thereafter.
        (b) Integration of Other Technical Assistance Programs.--
                (1) Clean energy application centers.--Section 375 of the
            Energy Policy and Conservation Act (42 U.S.C. 6345) is
            amended--
                        (A) by redesignating subsection (f) as subsection
                    (g); and
                        (B) by adding after subsection (e) the following
                    new subsection:
        ``(f) Coordination With Centers for Energy and Environmental
    Knowledge and Outreach.--A Clean Energy Application Center may serve as
    a Center for Energy and Environmental Knowledge and Outreach
    established pursuant to section 174 of the American Clean Energy and
    Security Act of 2009.''.
                (2) Industrial research and assessment centers.--Section
            452(e) of the Energy Independence and Security Act of 2007 (42
            U.S.C. 17111(e)) is amended--
                        (A) by striking ``The Secretary'' and all that
                    follows through ``shall be--'' and inserting the
                    following:
                ``(1) In general.--The Secretary shall provide funding to
            institution of higher education-based industrial research and
            assessment centers, whose purposes shall be--'';
                        (B) by redesignating paragraphs (1) through (5) as
                    subparagraphs (A) through (E), respectively (and by
                    moving the margins of such subparagraphs 2 ems to the
                    right); and
                        (C) by adding at the end the following new
                    paragraph:
                ``(2) Coordination with centers for energy and
            environmental knowledge and outreach.--An industrial research
            and assessment center may serve as a Center for Energy and
            Environmental Knowledge and Outreach established pursuant to
            section 174 of the American Clean Energy and Security Act of
            2009.''.
        (c) Additional Funding for Clean Energy Application Centers.--
    Subsection (g) of section 375 of the Energy Policy and Conservation Act
    (42 U.S.C. 6345(f)), as redesignated by subsection (b)(1) of this
    section, is amended by striking ``$10,000,000 for each of fiscal years
    2008 through 2012'' and inserting ``$30,000,000 for fiscal year 2010
    and each fiscal year thereafter''.

    SEC. 175. HIGH EFFICIENCY GAS TURBINE RESEARCH, DEVELOPMENT, AND
                  DEMONSTRATION.

        (a) In General.--The Secretary of Energy shall carry out a
    multiyear, multiphase program of research, development, and technology
    demonstration to improve the efficiency of gas turbines used in
    combined cycle power generation systems and to identify the
    technologies that ultimately will lead to gas turbine combined cycle
    efficiency of 65 percent.
        (b) Program Elements.--The program under this section shall--
                (1) support first-of-a-kind engineering and detailed gas
            turbine design for utility-scale electric power generation,
            including--
                        (A) high temperature materials, including
                    superalloys, coatings, and ceramics;
                        (B) improved heat transfer capability;
                        (C) manufacturing technology required to construct
                    complex three-dimensional geometry parts with improved
                    aerodynamic capability;
                        (D) combustion technology to produce higher firing
                    temperature while lowering nitrogen oxide and carbon
                    monoxide emissions per unit of output;
                        (E) advanced controls and systems integration;
                        (F) advanced high performance compressor
                    technology; and
                        (G) validation facilities for the testing of
                    components and subsystems;
                (2) include technology demonstration through component
            testing, subscale testing, and full scale testing in existing
            fleets;
                (3) include field demonstrations of the developed
            technology elements so as to demonstrate technical and economic
            feasibility; and
                (4) assess overall combined cycle system performance.
        (c) Program Goals.--The goals of the multiphase program established
    under subsection (a) shall be--
                (1) in phase I--
                        (A) to develop the conceptual design of advanced
                    high efficiency gas turbines that can achieve at least
                    62 percent combined cycle efficiency on a lower heating
                    value basis; and
                        (B) to develop and demonstrate the technology
                    required for advanced high efficiency gas turbines that
                    can achieve at least 62 percent combined cycle
                    efficiency on a lower heating value basis; and
                (2) in phase II, to develop the conceptual design for
            advanced high efficiency gas turbines that can achieve at least
            65 percent combined cycle efficiency on a lower heating value
            basis.
        (d) Proposals.--Within 180 days after the date of enactment of this
    section, the Secretary shall solicit proposals for conducting
    activities under this section. In selecting proposals, the Secretary
    shall emphasize--
                (1) the extent to which the proposal will stimulate the
            creation or increased retention of jobs in the United States;
            and
                (2) the extent to which the proposal will promote and
            enhance United States technology leadership.
        (e) Cost Sharing.--Section 988 of the Energy Policy Act of 2005 (42
    U.S.C. 16352) shall apply to an award of financial assistance made
    under this section.
        (f) Limits on Participation.--The limits on participation
    applicable under section 999E of the Energy Policy Act of 2005 (42
    U.S.C. 16375) shall apply to financial assistance awarded under this
    section.
        (g) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary for carrying out this section $65,000,000
    for each of fiscal years 2011 through 2014.

                 Subtitle I--Nuclear and Advanced Technologies

    SEC. 181. REVISIONS TO LOAN GUARANTEE PROGRAM AUTHORITY.

        (a) Definition of Conditional Commitment.--Section 1701 of the
    Energy Policy Act of 2005 (42 U.S.C. 16511), as amended by section
    130(a) of this Act, is amended by adding after paragraph (7) the
    following:
                ``(8) Conditional commitment.--The term `conditional
            commitment' means a final term sheet negotiated between the
            Secretary and a project sponsor or sponsors, which term sheet
            shall be binding on both parties and become a final loan
            guarantee agreement if all conditions precedent established in
            the term sheet, which shall include the acquisition of all
            necessary permits and licenses, are satisfied.''.
        (b) Specific Appropriation or Contribution.--Section 1702 of the
    Energy Policy Act of 2005 (42 U.S.C. 16512) is amended by striking
    subsection (b) and inserting the following:
        ``(b) Specific Appropriation or Contribution.--
                ``(1) In general.--No guarantee shall be made unless--
                        ``(A) an appropriation for the cost has been made;
                        ``(B) the Secretary has received from the borrower
                    a payment in full for the cost of the obligation and
                    deposited the payment into the Treasury; or
                        ``(C) a combination of appropriations or payments
                    from the borrower has been made sufficient to cover the
                    cost of the obligation.
                ``(2) Limitation.--The source of payments received from a
            borrower under paragraph (1)(B) shall not be a loan or other
            debt obligation that is made or guaranteed by the Federal
            Government.''.
        (c) Fees.--Section 1702(h) of the Energy Policy Act of 2005 (42
    U.S.C. 16512(h)) is amended by striking paragraph (2) and inserting the
    following:
                ``(2) Availability.--Fees collected under this subsection
            shall--
                        ``(A) be deposited by the Secretary into a special
                    fund in the Treasury to be known as the `Incentives For
                    Innovative Technologies Fund'; and
                        ``(B) remain available to the Secretary for
                    expenditure, without further appropriation or fiscal
                    year limitation, for administrative expenses incurred
                    in carrying out this title.''.
        (d) Wage Rate Requirements.--Section 1702 of the Energy Policy Act
    of 2005 (42 U.S.C. 16512) is amended by adding at the end the following
    new subsection:
        ``(k) Wage Rate Requirements.--No loan guarantee shall be made
    under this title unless the borrower has provided to the Secretary
    reasonable assurances that all laborers and mechanics employed by
    contractors and subcontractors in the performance of construction work
    financed in whole or in part by the guaranteed loan will be paid wages
    at rates not less than those prevailing on projects of a character
    similar to the contract work in the civil subdivision of the State in
    which the contract work is to be performed as determined by the
    Secretary of Labor in accordance with subchapter IV of chapter 31 of
    part A of subtitle II of title 40, United States Code. With respect to
    the labor standards specified in this subsection, the Secretary of
    Labor shall have the authority and functions set forth in
    Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.)
    and section 3145 of title 40, United States Code.''.
        (e) Subrogation.--Section 1702(g)(2) of the Energy Policy Act of
    2005 (42 U.S.C. 16512(g)(2)) is amended by striking subparagraphs (B)
    and (C) and inserting the following:
                        ``(B) Superiority of rights.--Except as provided in
                    subparagraph (C), the rights of the Secretary, with
                    respect to any property acquired pursuant to a
                    guarantee or related agreements, shall be superior to
                    the rights of any other person with respect to the
                    property.
                        ``(C) Terms and conditions.--A guarantee agreement
                    shall include such detailed terms and conditions as the
                    Secretary determines appropriate to--
                                ``(i) protect the financial interests of
                            the United States in the case of default;
                                ``(ii) have available all the patents and
                            technology necessary for any person selected,
                            including the Secretary, to complete and
                            operate the project;
                                ``(iii) provide for sharing the proceeds
                            received from the sale of project assets with
                            other creditors or control the disposition of
                            project assets if necessary to protect the
                            financial interests of the United States in the
                            case of default; and
                                ``(iv) provide such lien priority in
                            project assets as necessary to protect the
                            financial interests of the United States in the
                            case of a default.''.

    SEC. 182. PURPOSE.

        The purpose of sections 183 through 189 of this subtitle is to
    promote the domestic development and deployment of clean energy
    technologies required for the 21st century through the establishment of
    a self-sustaining Clean Energy Deployment Administration that will
    provide for an attractive investment environment through partnership
    with and support of the private capital market in order to promote
    access to affordable financing for accelerated and widespread
    deployment of--
                (1) clean energy technologies;
                (2) advanced or enabling energy infrastructure
            technologies;
                (3) energy efficiency technologies in residential,
            commercial, and industrial applications, including end-use
            efficiency in buildings; and
                (4) manufacturing technologies for any of the technologies
            or applications described in this section.

    SEC. 183. DEFINITIONS.

        In this subtitle:
                (1) Administration.--The term ``Administration'' means the
            Clean Energy Deployment Administration established by section
            186.
                (2) Advisory council.--The term ``Advisory Council'' means
            the Energy Technology Advisory Council of the Administration.
                (3) Breakthrough technology.--The term ``breakthrough
            technology'' means a clean energy technology that--
                        (A) presents a significant opportunity to advance
                    the goals developed under section 185, as assessed
                    under the methodology established by the Advisory
                    Council; but
                        (B) has generally not been considered a
                    commercially ready technology as a result of high
                    perceived technology risk or other similar factors.
                (4) Clean energy technology.--The term ``clean energy
            technology'' means a technology related to the production, use,
            transmission, storage, control, or conservation of energy--
                        (A) that will contribute to a stabilization of
                    atmospheric greenhouse gas concentrations thorough
                    reduction, avoidance, or sequestration of energy-
                    related emissions and--
                                (i) reduce the need for additional energy
                            supplies by using existing energy supplies with
                            greater efficiency or by transmitting,
                            distributing, or transporting energy with
                            greater effectiveness through the
                            infrastructure of the United States; or
                                (ii) diversify the sources of energy supply
                            of the United States to strengthen energy
                            security and to increase supplies with a
                            favorable balance of environmental effects if
                            the entire technology system is considered; and
                        (B) for which, as determined by the Administrator,
                    insufficient commercial lending is available at
                    affordable rates to allow for widespread deployment.
                (5) Cost.--The term ``cost'' has the meaning given the term
            in section 502 of the Federal Credit Reform Act of 1990 (2
            U.S.C. 661a).
                (6) Direct loan.--The term ``direct loan'' has the meaning
            given the term in section 502 of the Federal Credit Reform Act
            of 1990 (2 U.S.C. 661a).
                (7) Fund.--The term ``Fund'' means the Clean Energy
            Investment Fund established by section 184(a).
                (8) Green bonds.--The term ``Green Bonds'' means bonds
            issued pursuant to section 184.
                (8) Loan guarantee.--The term ``loan guarantee'' has the
            meaning given the term in section 502 of the Federal Credit
            Reform Act of 1990 (2 U.S.C. 661a).
                (9) National laboratory.--The term ``National Laboratory''
            has the meaning given the term in section 2 of the Energy
            Policy Act of 2005 (42 U.S.C. 15801).
                (10) Secretary.--The term ``Secretary'' means the Secretary
            of Energy.
                (11) 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.
                (12) Technology risk.--The term ``technology risk'' means
            the risks during construction or operation associated with the
            design, development, and deployment of clean energy
            technologies (including the cost, schedule, performance,
            reliability and maintenance, and accounting for the perceived
            risk), from the perspective of commercial lenders, that may be
            increased as a result of the absence of adequate historical
            construction, operating, or performance data from commercial
            applications of the technology.

    SEC. 184. CLEAN ENERGY INVESTMENT FUND.

        (a) Establishment.--There is established in the Treasury of the
    United States a revolving fund, to be known as the ``Clean Energy
    Investment Fund'', consisting of--
                (1) such amounts as are deposited in the Fund under this
            subtitle; and
                (2) such sums as may be appropriated to supplement the
            Fund.
        (b) Authorization of Appropriations.--There are authorized to be
    appropriated to the Fund such sums as are necessary to carry out this
    subtitle.
        (c) Expenditures From Fund.--
                (1) In general.--Amounts in the Fund shall be available to
            the Administrator of the Administration for obligation without
            fiscal year limitation, to remain available until expended.
                (2) Administrative expenses.--
                        (A) Fees.--Fees collected for administrative
                    expenses shall be available without limitation to cover
                    applicable expenses.
                        (B) Fund.--To the extent that administrative
                    expenses are not reimbursed through fees, an amount not
                    to exceed 1.5 percent of the amounts in the Fund as of
                    the beginning of each fiscal year shall be available to
                    pay the administrative expenses for the fiscal year
                    necessary to carry out this subtitle.
        (d) Transfers of Amounts.--
                (1) In general.--The amounts required to be transferred to
            the Fund under this section shall be transferred at least
            monthly from the general fund of the Treasury to the Fund on
            the basis of estimates made by the Secretary of the Treasury.
                (2) Adjustments.--Proper adjustment shall be made in
            amounts subsequently transferred to the extent prior estimates
            were in excess of or less than the amounts required to be
            transferred.
                (3) Cash flows.--Cash flows associated with costs of the
            Fund described in section 502(5)(B) of the Federal Credit
            Reform Act of 1990 (2 U.S.C. 661a(5)(B)) shall be transferred
            to appropriate credit accounts.
        (e) Green Bonds.--
                (1) Initial capitalization.--The Secretary of the Treasury
            shall issue Green Bonds in the amount of $7,500,000,000 on the
            credit of the United States to acquire capital stock of the
            Administration. Stock certificates evidencing ownership in the
            Administration shall be issued by the Administration to the
            Secretary of the Treasury, to the extent of payments made for
            the capital stock of the Administration.
                (2) Denominations and maturity.--Green Bonds shall be in
            such forms and denominations, and shall mature within such
            periods, as determined by the Secretary of the Treasury.
                (3) Interest.--Green Bonds shall bear interest at a rate
            not less than the current average yield on outstanding market
            obligations of the United States of comparable maturity during
            the month preceding the issuance of the obligation as
            determined by the Secretary of the Treasury.
                (4) Lawful investments.--Green Bonds shall be lawful
            investments, and may be accepted as security for all fiduciary,
            trust, and public funds, the investment or deposit of which
            shall be under the authority or control of the United States or
            any officer or officers thereof.

    SEC. 185. ENERGY TECHNOLOGY DEPLOYMENT GOALS.

        (a) Goals.--Not later than 1 year after the date of enactment of
    this Act, the Secretary, after consultation with the Advisory Council,
    shall develop and publish for review and comment in the Federal
    Register recommended near-, medium-, and long-term goals (including
    numerical performance targets at appropriate intervals to measure
    progress toward those goals) for the deployment of clean energy
    technologies through the credit support programs established by section
    187 to promote--
                (1) sufficient electric generating capacity using clean
            energy technologies to meet the energy needs of the United
            States;
                (2) clean energy technologies in vehicles and fuels that
            will substantially reduce the reliance of the United States on
            foreign sources of energy and insulate consumers from the
            volatility of world energy markets;
                (3) a domestic commercialization and manufacturing capacity
            that will establish the United States as a world leader in
            clean energy technologies across multiple sectors;
                (4) installation of sufficient infrastructure to allow for
            the cost-effective deployment of clean energy technologies
            appropriate to each region of the United States;
                (5) the transformation of the building stock of the United
            States to zero net energy consumption;
                (6) the recovery, use, and prevention of waste energy;
                (7) domestic manufacturing of clean energy technologies on
            a scale that is sufficient to achieve price parity with
            conventional energy sources;
                (8) domestic production of commodities and materials (such
            as steel, chemicals, polymers, and cement) using clean energy
            technologies so that the United States will become a world
            leader in environmentally sustainable production of the
            commodities and materials;
                (9) a robust, efficient, and interactive electricity
            transmission grid that will allow for the incorporation of
            clean energy technologies, distributed generation, and demand-
            response in each regional electric grid;
                (10) sufficient availability of financial products to allow
            owners and users of residential, retail, commercial, and
            industrial buildings to make energy efficiency and distributed
            generation technology investments with reasonable payback
            periods;
                (11) sufficient availability of financial services and
            support to small businesses developing and deploying clean
            energy technologies through partnerships with private entities
            that have relevant credit expertise; and
                (12) such other goals as the Secretary, in consultation
            with the Advisory Council, determines to be consistent with the
            purpose stated in section 182.
        (b) Revisions.--The Secretary shall revise the goals established
    under subsection (a), from time to time as appropriate, to account for
    advances in technology and changes in energy policy.

    SEC. 186. CLEAN ENERGY DEPLOYMENT ADMINISTRATION.

        (a) Establishment.--
                (1) Establishment of corporation.--There is established a
            corporation to be known as the Clean Energy Deployment
            Administration that shall be wholly owned by the United States.
                (2) Independent corporation.--The Administration shall be
            an independent corporation. Neither the Administration nor any
            of its functions, powers, or duties shall be transferred to or
            consolidated with any other department, agency, or corporation
            of the Government unless the Congress provides otherwise.
                (3) Charter.--The Administration shall be chartered for 20
            years from the date of enactment of this section.
                (4) Status.--
                        (A) Inspector general.--Section 12 of the Inspector
                    General Act of 1978 (5 U.S.C. App.) is amended--
                                (i) in paragraph (1), by inserting ``the
                            Administrator of the Clean Energy Deployment
                            Administration;'' after ``Export-Import
                            Bank;''; and
                                (ii) in paragraph (2), by inserting ``the
                            Clean Energy Deployment Administration,'' after
                            ``Export-Import Bank,''.
                (3) Offices.--
                        (A) Principal office.--The Administration shall--
                                (i) maintain the principal office of the
                            Administration in the national capital region;
                            and
                                (ii) for purposes of venue in civil
                            actions, be considered to be a resident of the
                            District of Columbia.
                        (B) Other offices.--The Administration may
                    establish other offices in such other places as the
                    Administration considers necessary or appropriate for
                    the conduct of the business of the Administration.
        (b) Administrator.--
                (1) In general.--The Administrator of the Administration
            shall be--
                        (A) appointed by the President, with the advice and
                    consent of the Senate, for a 5-year term; and
                        (B) compensated at the prevailing rate for
                    compensation for similar positions in industry.
                (2) Duties.--The Administrator of the Administration
            shall--
                        (A) serve as the Chief Executive Officer of the
                    Administration and Chairman of the Board;
                        (B) ensure that--
                                (i) the Administration operates in a safe
                            and sound manner, including maintenance of
                            adequate capital and internal controls
                            (consistent with section 404 of the Sarbanes-
                            Oxley Act of 2002 (15 U.S.C. 7262));
                                (ii) the operations and activities of the
                            Administration foster liquid, efficient,
                            competitive, and resilient energy and energy
                            efficiency finance markets;
                                (iii) the Administration carries out the
                            purpose stated in section 182 only through
                            activities that are authorized under and
                            consistent with sections 182 through 189; and
                                (iv) the activities of the Administration
                            and the manner in which the Administration is
                            operated are consistent with the public
                            interest;
                        (C) develop policies and procedures for the
                    Administration that will--
                                (i) promote a self-sustaining portfolio of
                            investments that will maximize the value of
                            investments to effectively promote clean energy
                            technologies;
                                (ii) promote transparency and openness in
                            Administration operations;
                                (iii) afford the Administration with
                            sufficient flexibility to meet the purpose
                            stated in section 182; and
                                (iv) provide for the efficient processing
                            of applications; and
                        (D) with the concurrence of the Board, set expected
                    loss reserves for the support provided by the
                    Administration consistent with section 187(c).
        (c) Board of Directors.--
                (1) In general.--The Board of Directors of the
            Administration shall consist of--
                        (A) the Secretary or the designee of the Secretary,
                    who shall serve as an ex-officio member of the Board of
                    Directors;
                        (B) the Secretary of the Treasury or the designee
                    of the Secretary, who shall serve as an ex-officio
                    member of the Board of Directors;
                        (C) the Secretary of the Interior or the designee
                    of the Secretary, who shall serve as an ex-officio
                    member of the Board of Directors;
                        (D) the Secretary of Agriculture or the designee of
                    the Secretary, who shall serve as an ex officio member
                    of the Board of Directors;
                        (E) the Administrator of the Administration, who
                    shall serve as the Chairman of the Board of Directors;
                    and
                        (F) 4 additional members who shall--
                                (i) be appointed by the President, with the
                            advice and consent of the Senate, for staggered
                            5-year terms; and
                                (ii) have experience in banking, financial
                            services, technology assessment, energy
                            regulation, or risk management, including
                            individuals with substantial experience in the
                            development of energy projects, the electricity
                            generation sector, the transportation sector,
                            the manufacturing sector, and the energy
                            efficiency sector.
                (2) Duties.--The Board of Directors shall--
                        (A) oversee the operations of the Administration
                    and ensure industry best practices are followed in all
                    financial transactions involving the Administration;
                        (B) consult with the Administrator of the
                    Administration on the general policies and procedures
                    of the Administration to ensure the interests of the
                    taxpayers are protected;
                        (C) ensure the portfolio of investments are
                    consistent with purpose stated in section 182 and with
                    the long-term financial stability of the
                    Administration;
                        (D) ensure that the operations and activities of
                    the Administration are consistent with the development
                    of a robust private sector that can provide commercial
                    loans or financing products; and
                        (E) not serve on a full-time basis, except that the
                    Board of Directors shall meet at least quarterly to
                    review, as appropriate, applications for credit support
                    and set policies and procedures as necessary.
                (3) Removal.--An appointed member of the Board of Directors
            may be removed from office by the President for good cause.
                (4) Vacancies.--An appointed seat on the Board of Directors
            that becomes vacant shall be filled by appointment by the
            President, but only for the unexpired portion of the term of
            the vacating member.
                (5) Compensation of members.--An appointed member of the
            Board of Directors shall be compensated at the prevailing rate
            for compensation for similar positions in industry.
        (d) Energy Technology Advisory Council.--
                (1) In general.--The Administration shall have an Energy
            Technology Advisory Council consisting of 8 members selected by
            the Board of Directors of the Administration.
                (2) Qualifications.--The members of the Advisory Council
            shall--
                        (A) have clean energy project development, clean
                    energy finance, commercial, and/or relevant scientific
                    expertise; and
                        (B) include representatives of--
                                (i) the academic community;
                                (ii) the private research community;
                                (iii) National Laboratories;
                                (iv) the technology or project development
                            community; and
                                (v) the commercial energy financing and
                            operations sector.
                (3) Duties.--The Advisory Council shall--
                        (A) develop and publish for comment in the Federal
                    Register a methodology for assessment of clean energy
                    technologies that will allow the Administration to
                    evaluate projects based on the progress likely to be
                    achieved per-dollar invested in maximizing the
                    attributes of the definition of clean energy
                    technology, taking into account the extent to which
                    support for a clean energy technology is likely to
                    accrue subsequent benefits that are attributable to a
                    commercial scale deployment taking place earlier than
                    that which otherwise would have occurred without the
                    support; and
                        (B) advise on the technological approaches that
                    should be supported by the Administration to meet the
                    technology deployment goals established by the
                    Secretary pursuant to section 185.
                (4) Term.--
                        (A) In general.--Members of the Advisory Council
                    shall have 5-year staggered terms, as determined by the
                    Administrator of the Administration.
                        (B) Reappointment.--A member of the Advisory
                    Council may be reappointed.
                (5) Compensation.--A member of the Advisory Council, who is
            not otherwise compensated as a Federal employee, shall be
            compensated at a rate equal to the daily equivalent of the
            annual rate of basic pay prescribed for level IV of the
            Executive Schedule under section 5315 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
            Advisory Council.
        (e) Staff.--
                (1) In general.--The Administrator of the Administration,
            in consultation with the Board of Directors, may--
                        (A) appoint and terminate such officers, attorneys,
                    employees, and agents as are necessary to carry out
                    this subtitle; and
                        (B) vest those personnel with such powers and
                    duties as the Administrator of the Administration may
                    determine.
        (f) Conflicts of Interest.--No director, officer, attorney, agent,
    or employee of the Administration shall in any manner, directly or
    indirectly, participate in the deliberation upon, or the determination
    of, any question affecting such individual's personal interests, or the
    interests of any corporation, partnership, or association in which such
    individual is directly or indirectly personally interested.
        (g) Sunset.--
                (1) Expiration of charter.--The Administration shall
            continue to exercise its functions until all obligations and
            commitments of the Administration are discharged, even after
            its charter has expired.
                (2) Prior obligations.--No provisions of this subsection
            shall be construed as preventing the Administration from--
                        (A) undertaking obligations prior to the date of
                    the expiration of its charter which mature subsequent
                    to such date;
                        (B) assuming, prior to the date of the expiration
                    of its charter, liability as guarantor, endorser, or
                    acceptor of obligations which mature subsequent to such
                    date; or
                        (C) continuing as a corporation and exercising any
                    of its functions subsequent to the date of the
                    expiration of its charter for purposes of orderly
                    liquidation, including the administration of its assets
                    and the collection of any obligations held by the
                    Administration.

    SEC. 187. DIRECT SUPPORT.

        (a) In General.--The Administration may issue direct loans, letters
    of credit, and loan guarantees to deploy clean energy technologies if
    the Administrator of the Administration has determined that deployment
    of the technologies would benefit or be accelerated by the support.
        (b) Eligibility Criteria.--In carrying out this section and
    awarding credit support to projects, the Administrator of the
    Administration shall account for--
                (1) how the technology rates based on an evaluation
            methodology established by the Advisory Council;
                (2) how the project fits with the goals established under
            section 185; and
                (3) the potential for the applicant to successfully
            complete the project.
        (c) Risk.--
                (1) Expected loan loss reserve.--The Administrator of the
            Administration shall establish an expected loan loss reserve to
            account for estimated losses attributable to activities under
            this section that is consistent with the purposes of--
                        (A) developing breakthrough technologies to the
                    point at which technology risk is largely mitigated;
                        (B) achieving widespread deployment and advancing
                    the commercial viability of clean energy technologies;
                    and
                        (C) advancing the goals established under section
                    185.
                (2) Initial expected loan loss reserve.--Until such time as
            the Administrator of the Administration determines sufficient
            data exist to establish an expected loan loss reserve that is
            appropriate, the Administrator of the Administration shall
            consider establishing an initial rate of 10 percent for the
            portfolio of investments under this subtitle.
                (3) Portfolio investment approach.--The Administration
            shall--
                        (A) use a portfolio investment approach to mitigate
                    risk and diversify investments across technologies and
                    ensure that no particular technology is provided more
                    than 30 percent of the financial support available;
                        (B) to the maximum extent practicable and
                    consistent with long-term self-sufficiency, weigh the
                    portfolio of investments in projects to advance the
                    goals established under section 185;
                        (C) consistent with the expected loan loss reserve
                    established under this subsection, the purpose stated
                    in section 182, and section 186(b)(2)(B), provide the
                    maximum practicable percentage of support to promote
                    breakthrough technologies; and
                        (D) give the highest priority to investments that
                    promote technologies that will achieve the maximum
                    greenhouse gas emission reductions within a reasonable
                    period of time per dollar invested and the earliest
                    reductions in greenhouse gas emissions.
                (4) Loss rate review.--
                        (A) In general.--The Board of Directors shall
                    review on an annual basis the loss rates of the
                    portfolio to determine the adequacy of the reserves.
                        (B) Report.--Not later than 90 days after the date
                    of the initiation of the review, the Administrator of
                    the Administration shall submit to the Committee on
                    Energy and Natural Resources and the Committee on
                    Finance of the Senate, and the Committee on Energy and
                    Commerce and the Committee on Ways and Means of the
                    House of Representatives a report describing the
                    results of the review and any recommended policy
                    changes.
                (5) Federal cost share.--Direct loans, letters of credit
            and loan guarantees by the Administration shall not exceed an
            amount equal to 80 percent of the project cost of the facility
            that is the subject of the loan, letter of credit or loan
            guarantee, as estimated at the time at which the loan, letter
            of credit or loan guarantee is issued.
        (d) Application Review.--
                (1) In general.--To the maximum extent practicable and
            consistent with sound business practices, the Administration
            shall seek to consolidate reviews of applications for credit
            support under this subtitle such that final decisions on
            applications can generally be issued not later than 180 days
            after the date of submission of a completed application.
                (2) Environmental review.--In carrying out this subtitle,
            the Administration shall, to the maximum extent practicable--
                        (A) avoid duplicating efforts that have already
                    been undertaken by other agencies (including State
                    agencies acting under Federal programs); and
                        (B) with the advice of the Council on Environmental
                    Quality and any other applicable agencies, use the
                    administrative records of similar reviews conducted
                    throughout the executive branch to develop the most
                    expeditious review process practicable.
        (e) Wage Rate Requirements.--
                (1) In general.--No credit support shall be issued under
            this section unless the borrower has provided to the
            Administrator of the Administration reasonable assurances that
            all laborers and mechanics employed by contractors and
            subcontractors in the performance of construction work financed
            in whole or in part by the Administration will be paid wages at
            rates not less than those prevailing on projects of a character
            similar to the contract work in the civil subdivision of the
            State in which the contract work is to be performed as
            determined by the Secretary of Labor in accordance with
            subchapter IV of chapter 31 of part A of subtitle II of title
            40, United States Code.
                (2) Labor standards.--With respect to the labor standards
            specified in this subsection, the Secretary of Labor shall have
            the authority and functions set forth in Reorganization Plan
            Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section
            3145 of title 40, United States Code.
        (f) Limitations.--(1) The Administration shall not provide direct
    support as defined under this section or indirect support as defined
    under section 188 to an individual clean energy technology project that
    obtained a loan guarantee under title XVII of the Energy Policy Act of
    2005.
        (2) No direct or indirect support provided by the Administration
    may be used to pay any part of the cost of an obligation or a loan
    guarantee under title XVII of the Energy Policy Act of 2005.

    SEC. 188. INDIRECT SUPPORT.

        (a) In General.--For the purpose of enhancing the availability of
    private financing for clean energy technology deployment, the
    Administration may--
                (1) provide credit support to portfolios of taxable debt
            obligations originated by state, local, and private sector
            entities that enable owners and users of buildings and
            industrial facilities to--
                        (A) significantly increase the energy efficiency of
                    such buildings or facilities; or
                        (B) install systems that individually generate
                    electricity from renewable energy resources and have a
                    capacity of no more than 2 megawatts;
                (2) facilitate financing transactions in tax equity markets
            and long-term purchasing of clean energy by state, local, and
            non-governmental not-for-profit entities, to the degree and
            extent that the Administration determines such financing
            activity is appropriate and consistent with carrying out the
            purposes described in Section 182 of this Act; and
                (3) provide credit support to portfolios of taxable debt
            obligations originated by state, local, and private sector
            entities that enable the deployment of energy storage
            applications for electric drive vehicles, stationary
            applications, and electricity transmission and distribution.
        (b) Definitions.--For purposes of the section:
                (1) Credit support.--The term ``credit support'' means--
                        (A) direct loans, letters of credit, loan
                    guarantees, and insurance products; and
                        (B) the purchase or commitment to purchase, or the
                    sale or commitment to sell, debt instruments (including
                    subordinated securities).
                (2) Renewable energy resource.--The term ``renewable energy
            resource'' shall have the meaning given that term in section
            610 of the Public Utility Regulatory Policies Act of 1978 (as
            added by section 101 of this Act).
        (c) Transparency.--The Administration shall seek to foster through
    its credit support activities--
                (1) the development and consistent application of standard
            contractual terms, transparent underwriting standards and
            consistent measurement and verification protocols, as
            applicable; and
                (2) the creation of performance data that promotes
            effective underwriting and risk management to support lending
            markets and stimulate the development of private investment
            markets.
        (d) Exempt Securities.--All securities insured or guaranteed by the
    Administration shall, to the same extent as securities that are direct
    obligations of or obligations guaranteed as to the principal or
    interest by the United States, be considered to be exempt securities
    within the meaning of the laws administered by the Securities and
    Exchange Commission.

    SEC. 189. FEDERAL CREDIT AUTHORITY.

        (a) Payments of Liabilities.--
                (1) In general.--Any payment made to discharge liabilities
            arising from agreements under this subtitle shall be paid
            exclusively out of the Fund or the associated credit account,
            as appropriate.
                (2) Security.--Subject to paragraph (1), the full faith and
            credit of the United States is pledged to the payment of all
            obligations entered into by the Administration pursuant to this
            subtitle.
        (b) Fees.--
                (1) In general.--Consistent with achieving the purpose
            stated in section 182, the Administrator of the Administration
            shall charge fees or collect compensation generally in
            accordance with commercial rates.
                (2) Availability of fees.--All fees collected by the
            Administration may be retained by the Administration and placed
            in the Fund and may remain available to the Administration,
            without further appropriation or fiscal year limitation, for
            use in carrying out the purpose stated in section 182.
                (3) Breakthrough technologies.--The Administration shall
            charge the minimum amount in fees or compensation practicable
            for breakthrough technologies, consistent with the long-term
            viability of the Administration, unless the Administration
            first determines that a higher charge will not impede the
            development of the technology.
                (4) Alternative fee arrangements.--The Administration may
            use such alternative arrangements (such as profit
            participation, contingent fees, and other valuable contingent
            interests) as the Administration considers appropriate to
            compensate the Administration for the expenses of the
            Administration and the risk inherent in the support of the
            Administration.
        (c) Cost Transfer Authority.--Amounts collected by the
    Administration for the cost of a loan or loan guarantee shall be
    transferred by the Administration to the respective credit accounts.

    SEC. 190. GENERAL PROVISIONS.

        (a) Immunity From Impairment, Limitation, or Restriction.--
                (1) In general.--All rights and remedies of the
            Administration (including any rights and remedies of the
            Administration on, under, or with respect to any mortgage or
            any obligation secured by a mortgage) shall be immune from
            impairment, limitation, or restriction by or under--
                        (A) any law (other than a law enacted by Congress
                    expressly in limitation of this paragraph) that becomes
                    effective after the acquisition by the Administration
                    of the subject or property on, under, or with respect
                    to which the right or remedy arises or exists or would
                    so arise or exist in the absence of the law; or
                        (B) any administrative or other action that becomes
                    effective after the acquisition.
                (2) State law.--The Administrator of the Administration may
            conduct the business of the Administration without regard to
            any qualification or law of any State relating to
            incorporation.
        (b) Use of Other Agencies.--With the consent of a department,
    establishment, or instrumentality (including any field office), the
    Administration may--
                (1) use and act through any department, establishment, or
            instrumentality; and
                (2) use, and pay compensation for, information, services,
            facilities, and personnel of the department, establishment, or
            instrumentality.
        (c) Financial Matters.--
                (1) Investments.--Funds of the Administration may be
            invested in such investments as the Board of Directors may
            prescribe. Earnings from such funds, other than fees collected
            under section 189, may be spent by the Administration only to
            such extent or in such amounts as are provided in advance by
            appropriation Acts.
                (2) Fiscal agents.--Any Federal Reserve bank or any bank as
            to which at the time of the designation of the bank by the
            Administrator of the Administration there is outstanding a
            designation by the Secretary of the Treasury as a general or
            other depository of public money, may be designated by the
            Administrator of the Administration as a depositary or
            custodian or as a fiscal or other agent of the Administration.
        (d) Periodic Reports.--Not later than 1 year after commencement of
    operation of the Administration and at least biannually thereafter, the
    Administrator of the Administration shall submit to the Committee on
    Energy and Natural Resources and the Committee on Finance of the Senate
    and the Committee on Energy and Commerce and the Committee on Ways and
    Means of the House of Representatives a report that includes a
    description of--
                (1) the technologies supported by activities of the
            Administration and how the activities advance the purpose
            stated in section 182; and
                (2) the performance of the Administration on meeting the
            goals established under section 185.
        (g) Audits by the Comptroller General.--
                (1) In general.--The programs, activities, receipts,
            expenditures, and financial transactions of the Administration
            shall be subject to audit by the Comptroller General of the
            United States under such rules and regulations as may be
            prescribed by the Comptroller General.
                (2) Access.--The representatives of the Government
            Accountability Office shall--
                        (A) have access to the personnel and to all books,
                    accounts, documents, records (including electronic
                    records), reports, files, and all other papers,
                    automated data, things, or property belonging to, under
                    the control of, or in use by the Administration, or any
                    agent, representative, attorney, advisor, or consultant
                    retained by the Administration, and necessary to
                    facilitate the audit;
                        (B) be afforded full facilities for verifying
                    transactions with the balances or securities held by
                    depositories, fiscal agents, and custodians;
                        (C) be authorized to obtain and duplicate any such
                    books, accounts, documents, records, working papers,
                    automated data and files, or other information relevant
                    to the audit without cost to the Comptroller General;
                    and
                        (D) have the right of access of the Comptroller
                    General to such information pursuant to section 716(c)
                    of title 31, United States Code.
                (3) Assistance and cost.--
                        (A) In general.--For the purpose of conducting an
                    audit under this subsection, the Comptroller General
                    may, in the discretion of the Comptroller General,
                    employ by contract, without regard to section 3709 of
                    the Revised Statutes (41 U.S.C. 5), professional
                    services of firms and organizations of certified public
                    accountants for temporary periods or for special
                    purposes.
                        (B) Reimbursement.--
                                (i) In general.--On the request of the
                            Comptroller General, the Administration shall
                            reimburse the Government Accountability Office
                            for the full cost of any audit conducted by the
                            Comptroller General under this subsection.
                                (ii) Crediting.--Such reimbursements
                            shall--
                                        (I) be credited to the
                                    appropriation account entitled
                                    ``Salaries and Expenses, Government
                                    Accountability Office'' at the time at
                                    which the payment is received; and
                                        (II) remain available until
                                    expended.
        (h) Annual Independent Audits.--
                (1) In general.--The Administrator of the Administration
            shall--
                        (A) have an annual independent audit made of the
                    financial statements of the Administration by an
                    independent public accountant in accordance with
                    generally accepted auditing standards; and
                        (B) submit to the Secretary and to the Committee on
                    Energy and Natural Resources and the Committee on
                    Finance of the Senate and the Committee on Energy and
                    Commerce and the Committee on Ways and Means of the
                    House the results of the audit.
                (2) Content.--In conducting an audit under this subsection,
            the independent public accountant shall determine and report on
            whether the financial statements of the Administration--
                        (A) are presented fairly in accordance with
                    generally accepted accounting principles; and
                        (B) comply with any disclosure requirements imposed
                    under this subtitle.
        (i) Financial Reports.--
                (1) In general.--The Administrator of the Administration
            shall submit to the Secretary and to the Committee on Energy
            and Natural Resources and the Committee on Finance of the
            Senate and the Committee on Energy and Commerce and the
            Committee on Ways and Means of the House annual and quarterly
            reports of the financial condition and operations of the
            Administration, which shall be in such form, contain such
            information, and be submitted on such dates as the Secretary
            shall require.
                (2) Contents of annual reports.--Each annual report shall
            include--
                        (A) financial statements prepared in accordance
                    with generally accepted accounting principles;
                        (B) any supplemental information or alternative
                    presentation that the Secretary may require; and
                        (C) an assessment (as of the end of the most recent
                    fiscal year of the Administration), signed by the chief
                    executive officer and chief accounting or financial
                    officer of the Administration, of--
                                (i) the effectiveness of the internal
                            control structure and procedures of the
                            Administration; and
                                (ii) the compliance of the Administration
                            with applicable safety and soundness laws.
                (3) Special reports.--The Secretary may require the
            Administrator of the Administration to submit other reports on
            the condition (including financial condition), management,
            activities, or operations of the Administration, as the
            Secretary considers appropriate.
                (4) Accuracy.--Each report of financial condition shall
            contain a declaration by the Administrator of the
            Administration or any other officer designated by the Board of
            Directors of the Administration to make the declaration, that
            the report is true and correct to the best of the knowledge and
            belief of the officer.
                (5) Availability of reports.--Reports required under this
            section shall be published and made publicly available as soon
            as is practicable after receipt by the Secretary.
        (j) Spending Safeguards and Reporting.--
                (1) In general.--The Administrator--
                        (A) shall require any entity receiving financing
                    support from the Administration to report quarterly, in
                    a format specified by the Administrator, on such
                    entity's use of such support and its progress
                    fulfilling the objectives for which such support was
                    granted, and the Administrator shall make these reports
                    available to the public;
                        (B) may establish additional reporting and
                    information requirements for any recipient of financing
                    support from the Administration;
                        (C) shall establish appropriate mechanisms to
                    ensure appropriate use and compliance with all terms of
                    any financing support from the Administration;
                        (D) shall create and maintain a fully searchable
                    database, accessible on the Internet (or successor
                    protocol) at no cost to the public, that contains at
                    least--
                                (i) a list of each entity that has applied
                            for financing support;
                                (ii) a description of each application;
                                (iii) the status of each such application;
                                (iv) the name of each entity receiving
                            financing support;
                                (v) the purpose for which such entity is
                            receiving such financing support;
                                (vi) each quarterly report submitted by the
                            entity pursuant to this section; and
                                (vii) such other information sufficient to
                            allow the public to understand and monitor the
                            financial support provided by the
                            Administration;
                        (E) shall make all financing transactions available
                    for public inspection, including formal annual reviews
                    by both a private auditor and the Comptroller General;
                    and
                        (F) shall at all times be available to receive
                    public comment in writing on the activities of the
                    Administration.
                (2) Protection of confidential business information.--To
            the extent necessary and appropriate, the Administrator may
            redact any information regarding applicants and borrowers to
            protect confidential business information.

    SEC. 191. CONFORMING AMENDMENTS.

        (a) Tax Exempt Status.--Subsection (l) of section 501 of the
    Internal Revenue Code of 1986 is amended by adding at the end the
    following:
                ``(4) The Clean Energy Deployment Administration
            established under section 186 of the American Clean Energy and
            Security Act of 2009.''.
        (b) Wholly Owned Government Corporation.--Paragraph (3) of section
    9101 of title 31, United States Code, is amended by adding at the end
    the following:
                        ``(S) the Clean Energy Deployment
                    Administration.''.

                           Subtitle J--Miscellaneous

    SEC. 195. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL
                  FACILITIES.

        (a) In General.--The Secretary of the Interior, the Secretary of
    Energy, and the Secretary of the Army shall jointly update the study of
    the potential for increasing electric power production capability at
    federally owned or operated water regulation, storage, and conveyance
    facilities required in section 1834 of the Energy Policy Act of 2005.
        (b) Content.--The update under this section shall include
    identification and description in detail of each facility that is
    capable, with or without modification, of producing additional
    hydroelectric power, including estimation of the existing potential for
    the facility to generate hydroelectric power.
        (c) Report.--The Secretaries shall submit to the Committees on
    Energy and Commerce, Natural Resources, and Transportation and
    Infrastructure of the House of Representatives and the Committee on
    Energy and Natural Resources of the Senate a report on the findings,
    conclusions, and recommendations of the update of the study under this
    section by not later than 12 months after the date of enactment of this
    Act. The report shall include each of the following:
                (1) The identifications, descriptions, and estimations
            referred to in subsection (b).
                (2) A description of activities currently conducted or
            considered, or that could be considered, to produce additional
            hydroelectric power from each identified facility.
                (3) A summary of prior actions taken by the Secretaries to
            produce additional hydroelectric power from each identified
            facility.
                (4) The costs to install, upgrade, or modify equipment or
            take other actions to produce additional hydroelectric power
            from each identified facility, and the level of Federal power
            customer involvement in the determination of such costs.
                (5) The benefits that would be achieved by such
            installation, upgrade, modification, or other action, including
            quantified estimates of any additional energy or capacity from
            each facility identified under subsection (b).
                (6) A description of actions that are planned, underway, or
            might reasonably be considered to increase hydroelectric power
            production by replacing turbine runners, by performing
            generator upgrades or rewinds, or by construction of pumped
            storage facilities.
                (7) The impact of increased hydroelectric power production
            on irrigation, water supply, fish, wildlife, Indian tribes,
            river health, water quality, navigation, recreation, fishing,
            and flood control.
                (8) Any additional recommendations to increase
            hydroelectric power production from, and reduce costs and
            improve efficiency at, federally owned or operated water
            regulation, storage, and conveyance facilities.

    SEC. 196. CLEAN TECHNOLOGY BUSINESS COMPETITION GRANT PROGRAM.

        (a) In General.--The Secretary of Energy is authorized to provide
    grants to organizations to conduct business competitions that provide
    incentives, training, and mentorship to entrepreneurs, including
    minority-owned and woman-owned, and early stage start-up companies
    throughout the United States to meet high priority economic,
    environmental, and energy security goals in areas to include energy
    efficiency, renewable energy, air quality, water quality and
    conservation, transportation, smart grid, green building, and waste
    management. Such competitions shall have the purpose of accelerating
    the development and deployment of clean technology businesses and green
    jobs; stimulating green economic development; providing business
    training and mentoring to early stage clean technology companies; and
    strengthening the competitiveness of United States clean technology
    industry in world trade markets. Priority shall be given to business
    competitions that are private sector led, encourage regional and
    interregional cooperation, and can demonstrate market-driven practices
    and show the creation of cost-effective green jobs through an annual
    publication of competition activities and directory of companies.
        (b) Eligibility.--An organization eligible for a grant under
    subsection (a) is--
                (1) any organization described in section 501(c)(3) of the
            Internal Revenue Code of 1986 and exempt from tax under section
            501(a) of such Code; and
                (2) any sponsored entity of an organization described in
            paragraph (1) that is operated as a nonprofit entity.
        (c) Priority.--In making grants under this section, the Secretary
    shall give priority to those organizations that can demonstrate broad
    funding support from private and other non-Federal funding sources to
    leverage Federal investment.
        (d) Authorization of Appropriations.--For the purpose of carrying
    out this section, there are authorized to be appropriated $20,000,000.

    SEC. 197. NATIONAL BIOENERGY PARTNERSHIP.

        (a) In General.--The Secretary of Energy shall establish a National
    Bioenergy Partnership to provide coordination among programs of State
    governments, the Federal Government, and the private sector that
    support the institutional and physical infrastructure necessary to
    promote the deployment of sustainable biomass fuels and bioenergy
    technologies for the United States.
        (b) Program.--The National Bioenergy Partnership shall consist of
    five regions, to be administered by the CONEG Policy Research Center,
    the Council of Great Lakes Governors, the Southern States Energy Board,
    the Western Governors Association, and the Pacific Regional Biomass
    Energy Partnership led by the Washington State University Energy
    Program.
        (c) Authorization of Appropriations.--There are authorized to be
    appropriated for each of fiscal years 2010 through 2014 to carry out
    this section--
                (1) $5,000,000, to be allocated among the 5 regions
            described in subsection (b) on the basis of the number of
            States in each region, for distribution among the member States
            of that region based on procedures developed by the member
            States of the region; and
                (2) $2,500,000, to be allocated equally among the 5 regions
            described in subsection (b) for region-wide activities,
            including technical assistance and regional studies and
            coordination.

    SEC. 198. OFFICE OF CONSUMER ADVOCACY.

        Section 319 of the Federal Power Act is amended to read as follows:

    ``SEC. 319. OFFICE OF CONSUMER ADVOCACY.

        ``(a) Office.--
                ``(1) Establishment.--There is established within the
            Commission an Office of Consumer Advocacy to serve as an
            advocate for the public interest. The Office of Administrative
            Litigation within the Commission shall be incorporated into the
            Office of Consumer Advocacy.
                ``(2) Director.--The Office shall be headed by a Director
            to be appointed by the President by and with the advice and
            consent of the Senate from among individuals who are licensed
            attorneys admitted to the Bar of any State or of the District
            of Columbia and who have experience in public utility
            proceedings.
                ``(3) Duties.--The Office may--
                        ``(A) represent the interests of energy customers--
                                ``(i) on matters before the Commission
                            concerning rates or service of public utilities
                            and natural gas companies under the
                            jurisdiction of the Commission;
                                ``(ii) as amicus curiae, in the review in
                            the courts of the United States of rulings by
                            the Commission in such matters; and
                                ``(iii) as amicus, in hearings and
                            proceedings in other Federal regulatory
                            agencies and commissions related to such
                            matters;
                        ``(B) monitor and review energy customer complaints
                    and grievances on matters concerning rates or service
                    of public utilities and natural gas companies under the
                    jurisdiction of the Commission;
                        ``(C) investigate independently, or within the
                    context of formal proceedings, the services provided
                    by, the rates charged by, and the valuation of the
                    properties of, public utilities and natural gas
                    companies under the jurisdiction of the Commission;
                        ``(D) develop means, such as public dissemination
                    of information, consultative services, and technical
                    assistance, to ensure, to the maximum extent
                    practicable, that the interests of energy consumers are
                    adequately represented in the course of any hearing or
                    proceeding described in subparagraph (A);
                        ``(E) collect data concerning rates or service of
                    public utilities and natural gas companies under the
                    jurisdiction of the Commission; and
                        ``(F) prepare and issue reports and
                    recommendations.
                ``(4) Compensation and powers.--The Director shall be
            compensated at Level IV of the Executive Schedule. The Director
            may--
                        ``(A) employ not more than 25 full-time
                    professional employees at appropriate levels in the GS
                    Scale and such additional support personnel as
                    required; and
                        ``(B) procure temporary and intermittent services
                    as needed.
                ``(5) Information from other federal agencies.--The
            Director may request, from any department, agency, or
            instrumentality of the United States such information as he
            deems necessary to carry out his functions under this section.
            Upon such request, the head of the department, agency, or
            instrumentality concerned shall, to the extent practicable and
            authorized by law, provide such information to the Office.
        ``(b) Consumer Advocacy Advisory Committee.--
                ``(1) Establishment.--The Director shall establish an
            advisory committee to be known as Consumer Advocacy Advisory
            Committee (in this section referred to as the `Advisory
            Committee') to review rates, services, and disputes and to make
            recommendations to the Director.
                ``(2) Composition.--The Director shall appoint 5 members to
            the Advisory Committee including--
                        ``(A) 2 individuals representing State utility
                    consumer advocates; and
                        ``(B) 1 individual, from a nongovernmental
                    organization representing consumers.
                ``(3) Meetings.--The Advisory Committee shall meet at such
            frequency as may be required to carry out its duties.
                ``(4) Reports.--The Director shall provide for the
            publication of recommendations of the Advisory Committee on the
            public website established for the Office.
                ``(5) Duration.--Notwithstanding any other provision of
            law, the Advisory Committee shall continue in operation during
            the period for which the Office exists.
        ``(c) Definitions.--
                ``(1) Energy customer.--The term `energy customer' means a
            residential customer or a small commercial customer that
            receives products or services directly or indirectly from a
            public utility or natural gas company under the jurisdiction of
            the Commission.
                ``(2) Natural gas company.--The term `natural gas company'
            has the meaning given the term in section 2 of the Natural Gas
            Act (15 U.S.C. 717a), as modified by section 601(a) of the
            Natural Gas Policy Act of 1978 (15 U.S.C. 3431(a)).
                ``(3) Office.--The term `Office' means the Office of
            Consumer Advocacy established under this section.
                ``(4) Public utility.--The term `public utility' has the
            meaning given the term in section 201(e) of this Act.
                ``(5) Small commercial customer.--The term `small
            commercial customer' means a commercial customer that has a
            peak demand of not more than 1,000 kilowatts per hour.
        ``(d) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as necessary to carry out this section.
        ``(e) Savings Clause.--Nothing in this section affects the rights
    or obligations of any State utility consumer advocate.''.

    SEC. 199. DEVELOPMENT CORPORATION FOR RENEWABLE POWER BORROWING
                  AUTHORITY.

        (a) Determination.--No later than 6 months after the date of
    enactment of this Act, the Secretary of Energy, in coordination with
    the Secretary of Commerce, shall--
                (1) determine any geographic area within the contiguous
            United States that lacks a Federal power marketing agency;
                (2) develop a plan or criteria for the geographic areas
            identified in paragraph (1) regarding investment in renewable
            energy and associated infrastructure within an area identified
            in paragraph (1); and
                (3) identify any Federal agency within an area in paragraph
            (1) that has, or could develop, the ability to facilitate the
            investment in paragraph (2).
        (b) Report.--The Secretary of Energy, in coordination with the
    Secretary of Commerce, shall provide the determinations made under
    subsection (a) to the Committee on Energy and Commerce of the House of
    Representatives.
        (c) Establishment.--Based upon the determinations made pursuant to
    subsection (a), the Secretary of Energy, in coordination with the
    Secretary of Commerce, shall recommend to the Committee on Energy and
    Commerce of the House of Representatives the establishment of any new
    Federal lending authority, including authorization of additional
    lending authority for existing Federal agencies, not to exceed
    $3,500,000,000 per geographic area identified in subsection (a)(1).
        (d) Authorization.--$25,000,000 is authorized to be appropriated
    for fiscal year 2010 to carry out the provisions of this section.

    SEC. 199A. STUDY.

        Not later than February 1, 2011, the Secretary of Energy shall
    transmit to the Congress a report showing the results of a study on the
    use of thorium-fueled nuclear reactors for national energy needs. Such
    report shall include a response to the International Atomic Energy
    Agency study entitled ``Thorium fuel cycle - Potential benefits and
    challenges'' (IAEA-TECDOC-1450).

                          TITLE II--ENERGY EFFICIENCY

                Subtitle A--Building Energy Efficiency Programs

    SEC. 201. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

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

    ``SEC. 304. GREATER ENERGY EFFICIENCY IN BUILDING CODES.

        ``(a) Energy Efficiency Targets.--
                ``(1) In general.--Except as provided in paragraph (2) or
            (3), the national building code energy efficiency target for
            the national average percentage improvement of a building's
            energy performance when built to a code meeting the target
            shall be--
                        ``(A) effective on the date of enactment of the
                    American Clean Energy and Security Act of 2009, 30
                    percent reduction in energy use relative to a
                    comparable building constructed in compliance with the
                    baseline code;
                        ``(B) effective January 1, 2014, for residential
                    buildings, and January 1, 2015, for commercial
                    buildings, 50 percent reduction in energy use relative
                    to the baseline code; and
                        ``(C) effective January 1, 2017, for residential
                    buildings, and January 1, 2018, for commercial
                    buildings, and every 3 years thereafter, respectively,
                    through January 1, 2029, and January 1, 2030, 5 percent
                    additional reduction in energy use relative to the
                    baseline code.
                ``(2) Consensus-based codes.--If on any effective date
            specified in paragraph (1)(A), (B), or (C) a successor code to
            the baseline codes provides for greater reduction in energy use
            than is required under paragraph (1), the overall percentage
            reduction in energy use provided by that successor code shall
            be the national building code energy efficiency target.
                ``(3) Targets established by secretary.--The Secretary may
            by rule establish a national building code energy efficiency
            target for residential or commercial buildings achieving
            greater reductions in energy use than the targets prescribed in
            paragraph (1) or (2) if the Secretary determines that such
            greater reductions in energy use can be achieved with a code
            that is life cycle cost-justified and technically feasible. The
            Secretary may by rule establish a national building code energy
            efficiency target for residential or commercial buildings
            achieving a reduction in energy use that is greater than zero
            but less than the targets prescribed in paragraph (1) or (2) if
            the Secretary determines that such lesser target is the maximum
            reduction in energy use that can be achieved through a code
            that is life cycle cost-justified and technically feasible.
                ``(4) Additional reductions in energy use.--Effective on
            January 1, 2033, and once every 3 years thereafter, the
            Secretary shall determine, after notice and opportunity for
            comment, whether further energy efficiency building code
            improvements for residential or commercial buildings,
            respectively, are life cycle cost-justified and technically
            feasible, and shall establish updated national building code
            energy efficiency targets that meet such criteria.
                ``(5) Zero-net-energy buildings.--In setting targets under
            this subsection, the Secretary shall consider ways to support
            the deployment of distributed renewable energy technology, and
            shall seek to achieve the goal of zero-net-energy commercial
            buildings established in section 422 of the Energy Independence
            and Security Act of 2007 (42 U.S.C. 17082).
                ``(6) Baseline code.--For purposes of this section, the
            term `baseline code' means--
                        ``(A) for residential buildings, the 2006
                    International Energy Conservation Code (IECC) published
                    by the International Code Council (ICC); and
                        ``(B) for commercial buildings, the code published
                    in ASHRAE Standard 90.1-2004.
                ``(7) Consultation.--In establishing the targets required
            by this section, the Secretary shall consult with the Director
            of the National Institute of Standards and Technology.
        ``(b) National Energy Efficiency Building Codes.--
                ``(1) Requirement.--
                        ``(A) In general.--There shall be established
                    national energy efficiency building codes under this
                    subsection, for residential and commercial buildings,
                    sufficient to meet each of the national building code
                    energy efficiency targets established under subsection
                    (a), not later than the date that is 1 year after the
                    deadline for establishment of each such target, except
                    that the national energy efficiency building code
                    established to meet the target described in subsection
                    (a)(1)(A) shall be established by not later than 15
                    months after the effective date of that target.
                        ``(B) Existing code.--If the Secretary finds prior
                    to the date provided in subparagraph (A) for
                    establishing a national code for any target that one or
                    more energy efficiency building codes published by a
                    recognized developer of national energy codes and
                    standards meet or exceed the established target, the
                    Secretary shall select the code that meets the target
                    with the highest efficiency in the most cost-effective
                    manner, and such code shall be the national energy
                    efficiency building code.
                        ``(C) Requirement to establish code.--If the
                    Secretary does not make a finding under subparagraph
                    (B), the national energy efficiency building code shall
                    be established by rule by the Secretary under paragraph
                    (2).
                ``(2) Establishment by secretary.--
                        ``(A) Procedure.--In order to establish a national
                    energy efficiency building code as required under
                    paragraph (1)(C), the Secretary shall--
                                ``(i) not later than 6 months prior to the
                            effective date for each target, review existing
                            and proposed codes published or under review by
                            recognized developers of national energy codes
                            and standards;
                                ``(ii) determine the percentage of energy
                            efficiency improvements that are or would be
                            achieved in such published or proposed code
                            versions relative to the target;
                                ``(iii) propose improvements to such
                            published or proposed code versions sufficient
                            to meet or exceed the target; and
                                ``(iv) unless a finding is made under
                            paragraph (1)(B) with respect to a code
                            published by a recognized developer of national
                            energy codes and standards, adopt a code that
                            meets or exceeds the relevant national building
                            code energy efficiency target by not later than
                            1 year after the effective date of each such
                            target, and by not later than 15 months after
                            the target is established under subsection
                            (a)(1)(A).
                        ``(B) Calculations.--Each national energy
                    efficiency building code established by the Secretary
                    under this paragraph shall be set at the maximum level
                    the Secretary determines is life cycle cost-justified
                    and technically feasible, in accordance with the
                    following:
                                ``(i) Savings calculations.--Calculations
                            of energy savings shall take into account the
                            typical lifetimes of different products,
                            measures, and system configurations.
                                ``(ii) Cost-effectiveness calculations.--
                            Calculations of life cycle cost-effectiveness
                            shall be based on life cycle cost methods and
                            procedures under section 544 of the National
                            Energy Conservation Policy Act (42 U.S.C.
                            8254), but shall incorporate to the extent
                            feasible externalities such as impacts on
                            climate change and on peak energy demand that
                            are not already incorporated in assumed energy
                            costs.
                        ``(C) Considerations.--In developing a national
                    energy efficiency building code under this paragraph,
                    the Secretary shall consider--
                                ``(i) for residential national energy
                            efficiency building codes--
                                        ``(I) residential building
                                    standards published or proposed by
                                    ASHRAE;
                                        ``(II) building codes published or
                                    proposed by the International Code
                                    Council (ICC);
                                        ``(III) data from the Residential
                                    Energy Services Network (RESNET) on
                                    compliance measures utilized by
                                    consumers to qualify for the
                                    residential energy efficiency tax
                                    credits established under the Energy
                                    Policy Act of 2005;
                                        ``(IV) data and information from
                                    the Department of Energy's Building
                                    America Program;
                                        ``(V) data and information from the
                                    Energy Star New Homes program;
                                        ``(VI) data and information from
                                    the New Building Institute and similar
                                    organizations; and
                                        ``(VII) standards for practices and
                                    materials to achieve cool roofs in
                                    residential buildings, taking into
                                    consideration reduced air conditioning
                                    energy use as a function of cool roofs,
                                    the potential reduction in global
                                    warming from increased solar
                                    reflectance from buildings, and cool
                                    roofs criteria in State and local
                                    building codes and in national and
                                    local voluntary programs, without
                                    reduction of otherwise applicable
                                    ceiling insulation standards; and
                                ``(ii) for commercial national energy
                            efficiency building codes--
                                        ``(I) commercial building standards
                                    proposed by ASHRAE;
                                        ``(II) building codes proposed by
                                    the International Code Council (ICC);
                                        ``(III) the Core Performance
                                    Criteria published by the New Buildings
                                    Institute;
                                        ``(IV) data and information
                                    developed by the Director of the
                                    Commercial High-Performance Green
                                    Building Office of the Department of
                                    Energy and any public-private
                                    partnerships established under that
                                    Office;
                                        ``(V) data and information from the
                                    Energy Star for Buildings program;
                                        ``(VI) data and information from
                                    the New Building Institute, RESNET, and
                                    similar organizations; and
                                        ``(VII) standards for practices and
                                    materials to achieve cool roofs in
                                    commercial buildings, taking into
                                    consideration reduced air conditioning
                                    energy use as a function of cool roofs,
                                    the potential reduction in global
                                    warming from increased solar
                                    reflectance from buildings, and cool
                                    roofs criteria in State and local
                                    building codes and in national and
                                    local voluntary programs, without
                                    reduction of otherwise applicable
                                    ceiling insulation standards.
                        ``(D) Consultation.--In establishing any national
                    energy efficiency building code required by this
                    section, the Secretary shall consult with the Director
                    of the National Institute of Standards and Technology.
                ``(3) Consensus standard assistance.--(A) To support the
            development of consensus standards that may provide the basis
            for national energy efficiency building codes, minimize
            duplication of effort, encourage progress through consensus,
            and facilitate the development of greater building efficiency,
            the Secretary shall provide assistance to recognized developers
            of national energy codes and standards to develop, and where
            the relevant code has been adopted as the national code,
            disseminate consensus based energy efficiency building codes as
            provided in this paragraph.
                ``(B) Upon a finding by the Secretary that a code developed
            by such a developer meets a target established under subsection
            (a), the Secretary shall--
                        ``(i) send notice of the Secretary's finding to all
                    duly authorized or appointed State, tribal, and local
                    code agencies; and
                        ``(ii) provide sufficient support to such a
                    developer to make the code available on the Internet,
                    or to accomplish distribution of such code to all such
                    State, tribal, and local code agencies at no cost to
                    the State, tribal, and local code agencies.
                ``(C) The Secretary may contract with such a developer and
            with other organizations with expertise on codes to provide
            training for State, tribal, and local code officials and
            building inspectors in the implementation and enforcement of
            such code.
                ``(D) The Secretary may provide grants and other support to
            such a developer to--
                        ``(i) develop appropriate refinements to such code;
                    and
                        ``(ii) support analysis of options for improvements
                    in the code to meet the next scheduled target.
                ``(4) Code developed by secretary.--If the Secretary
            establishes a national energy efficiency building code under
            paragraph (2), the Secretary shall--
                        ``(A) to the extent that such code is based on a
                    prior code developed by a recognized developer of
                    national energy codes and standards, negotiate and
                    provide appropriate compensation to such developer for
                    the use of the code materials that remain in the code
                    established by the Secretary; and
                        ``(B) disseminate the national energy efficiency
                    building codes to State, tribal, and local code
                    officials, and support training and provide guidance
                    and technical assistance to such officials as
                    appropriate.
        ``(c) State Adoption of Energy Efficiency Building Codes.--
                ``(1) Requirement.--Not later than 1 year after a national
            energy efficiency building code for residential or commercial
            buildings is established or revised under subsection (b), each
            State--
                        ``(A) shall--
                                ``(i) review and update the provisions of
                            its building code regarding energy efficiency
                            to meet or exceed the target met in the new
                            national energy efficiency building code, to
                            achieve equivalent or greater energy savings;
                                ``(ii) document, where local governments
                            establish building codes, that local
                            governments representing not less than 80
                            percent of the State's urban population have
                            adopted the new national code, or have adopted
                            local codes that meet or exceed the target met
                            in the new national code to achieve equivalent
                            or greater energy savings; or
                                ``(iii) adopt the new national code; and
                        ``(B) shall provide a certification to the
                    Secretary demonstrating that energy efficiency building
                    code provisions that apply pursuant to subparagraph (A)
                    in that State meet or exceed the target met by the new
                    national code, to achieve equivalent or greater energy
                    savings.
                ``(2) Confirmation.--
                        ``(A) Requirement.--Not later than 90 days after a
                    State certification is provided under paragraph (1)(B),
                    the Secretary shall determine whether the State's
                    energy efficiency building code provisions meet the
                    requirements of this subsection.
                        ``(B) Acceptance by secretary.--If the Secretary
                    determines under subparagraph (A) that the State's
                    energy efficiency building code or codes meet the
                    requirements of this subsection, the Secretary shall
                    accept the certification.
                        ``(C) Deficiency notice.--If the Secretary
                    determines under subparagraph (A) that the State's
                    building code or codes do not meet the requirements of
                    this subsection, the Secretary shall identify the
                    deficiency in meeting the national building code energy
                    efficiency target, and, to the extent possible,
                    indicate areas where further improvement in the State's
                    code provisions would allow the deficiency to be
                    eliminated.
                        ``(D) Revision of code and recertification.--A
                    State may revise its code or codes and submit a
                    recertification under paragraph (1)(B) to the Secretary
                    at any time.
                ``(3) Compliant code.--For the purposes of meeting the
            target described in subsection (a)(1)(A) for residential
            buildings, a State that adopts the code represented in
            California's Title 24-2009 by the date 27 months after the date
            of enactment of the American Clean Energy and Security Act of
            2009 shall be considered to have met the requirements of this
            subsection for the applicable period.
        ``(d) Application of National Code to State and Local
    Jurisdictions.--
                ``(1) In general.--Upon the expiration of 18 months after a
            national energy efficiency building code is established under
            subsection (b), in any jurisdiction where the State has not had
            a certification relating to that code accepted by the Secretary
            under subsection (c)(2)(B), and the local government has not
            had a certification relating to that code accepted by the
            Secretary under subsection (e)(5), the national energy
            efficiency building code shall become the applicable energy
            efficiency building code for such jurisdiction.
                ``(2) Conflicts.--In the event of a conflict between a
            provision of the national energy efficiency building code and a
            provision of other applicable energy codes, the national energy
            efficiency building code shall apply. If there is a conflict
            between a provision of the national energy efficiency building
            code and a provision of any applicable fire code, life safety
            code, egress code, or accessibility code, the Secretary shall
            take appropriate actions to resolve such conflict in a manner
            that does not compromise the objectives of such codes.
                ``(3) State legislative adoption.--In a State in which the
            relevant building energy code is adopted legislatively, the
            deadline in paragraph (1) shall not be earlier than 1 year
            after the first day that the legislature meets following
            establishment of a national energy efficiency building code.
                ``(4) Notice of intent to enforce.--A State or locality
            that enforces building codes may assume responsibility for
            enforcing the national energy efficiency building code by
            notifying the Secretary to that effect not later than three
            months after the date established under paragraph (1).
                ``(5) Violations.--Violations of this section shall be
            defined as follows:
                        ``(A) If the building is subject to the
                    requirements of a State energy efficiency building code
                    with respect to which a certification has been accepted
                    by the Secretary under subsection (c)(2)(B) or a local
                    energy efficiency building code with respect to which a
                    certification has been accepted by the Secretary
                    pursuant to subsection (e)(5), or the requirements of
                    the national energy efficiency building code in a State
                    where the State or locality has notified the Secretary
                    of its intent to enforce the provisions of the national
                    energy efficiency building code, a violation shall be
                    determined pursuant to the relevant provisions of State
                    or local law.
                        ``(B) If the building is subject to the
                    requirements of a national energy efficiency building
                    code made applicable under paragraph (1) of this
                    subsection, except as provided in subparagraph (A), a
                    violation shall be defined by the Secretary pursuant to
                    subsection (g).
        ``(e) State Enforcement of Energy Efficiency Building Codes.--
                ``(1) In general.--Each State, or where applicable under
            State law each local government, shall implement and enforce
            applicable State or local codes with respect to which a
            certification was accepted by the Secretary under subsection
            (c)(2)(B) or paragraph (5) of this subsection, or the national
            energy efficiency building codes, as provided in this
            subsection.
                ``(2) State certification.--Not later than 2 years after
            the date of a certification under subsection (c)(1) or the
            application of a national energy efficiency building code under
            subsection (d)(1), each State shall certify that it has--
                        ``(A) achieved compliance with--
                                ``(i) State codes, or, as provided under
                            State law, local codes, with respect to which a
                            certification was accepted by the Secretary
                            under subsection (c)(2)(B); or
                                ``(ii) the national energy efficiency
                            building code, as applicable; or
                        ``(B) for any certification submitted within 7
                    years after the date of enactment of the American Clean
                    Energy and Security Act of 2009, made significant
                    progress toward achieving such compliance.
                ``(3) Achieving compliance.--A State shall be considered to
            achieve compliance with a code described in paragraph (2)(A) if
            at least 90 percent of new and substantially renovated building
            space in that State in the preceding year upon inspection meets
            the requirements of the code. A certification under paragraph
            (2) shall include documentation of the rate of compliance based
            on--
                        ``(A) independent inspections of a random sample of
                    the new and substantially renovated buildings covered
                    by the code in the preceding year; or
                        ``(B) an alternative method that yields an accurate
                    measure of compliance as determined by the Secretary.
                ``(4) Significant progress.--A State shall be considered to
            have made significant progress toward achieving compliance with
            a code described in paragraph (2)(A) if--
                        ``(A) the State has developed a plan, including for
                    hiring enforcement staff, providing training, providing
                    manuals and checklists, and instituting enforcement
                    programs, designed to achieve full compliance within 5
                    years after the date of the adoption of the code;
                        ``(B) the State is taking significant, timely, and
                    measurable action to implement that plan;
                        ``(C) the State has not reduced its expenditures
                    for code enforcement; and
                        ``(D) at least 50 percent of new and substantially
                    renovated building space in the State in the preceding
                    year upon inspection meets the requirements of the
                    code.
                ``(5) Secretary's determination.--Not later than 90 days
            after a State certification under paragraph (2), the Secretary
            shall determine whether the State has demonstrated that it has
            complied with the requirements of this subsection, including
            accurate measurement of compliance, or that it has made
            significant progress toward compliance. If such determination
            is positive, the Secretary shall accept the certification. If
            the determination is negative, the Secretary shall identify the
            areas of deficiency.
                ``(6) Out of compliance.--
                        ``(A) In general.--Any State for which the
                    Secretary has not accepted a certification under
                    paragraph (5) by the dates specified in paragraph (2)
                    is out of compliance with this section.
                        ``(B) Local compliance.--In any State that is out
                    of compliance with this section as provided in
                    subparagraph (A), a local government may be in
                    compliance with this section by meeting all
                    certification requirements of this subsection.
                        ``(C) Noncompliance.--Any State that is not in
                    compliance with this section, as provided in
                    subparagraph (A), shall, until the State regains such
                    compliance, be ineligible to receive--
                                ``(i) emission allowances pursuant to
                            subsection (h)(1);
                                ``(ii) Federal funding in excess of that
                            State's share (calculated according to the
                            allocation formula in section 363 of the Energy
                            Policy and Conservation Act (42 U.S.C. 6323))
                            of $125,000,000 each year; and
                                ``(iii) for--
                                        ``(I) the first year for which the
                                    State is out of compliance, 25 percent
                                    of any additional funding or other
                                    items of monetary value otherwise
                                    provided under the American Clean
                                    Energy and Security Act of 2009;
                                        ``(II) the second year for which
                                    the State is out of compliance, 50
                                    percent of any additional funding or
                                    other items of monetary value otherwise
                                    provided under the American Clean
                                    Energy and Security Act of 2009;
                                        ``(III) the third year for which
                                    the State is out of compliance, 75
                                    percent of any additional funding or
                                    other items of monetary value otherwise
                                    provided under the American Clean
                                    Energy and Security Act of 2009; and
                                        ``(IV) the fourth and subsequent
                                    years for which the State is out of
                                    compliance, 100 percent of any
                                    additional funding or other items of
                                    monetary value otherwise provided under
                                    the American Clean Energy and Security
                                    Act of 2009.
        ``(f) Federal Enforcement and Training.--Where a State fails and
    local governments in that State also fail to enforce the applicable
    State or national energy efficiency building codes, the Secretary shall
    enforce such codes, as follows:
                ``(1) The Secretary shall establish, by rule, within 2
            years after the date of enactment of the American Clean Energy
            and Security Act of 2009, an energy efficiency building code
            enforcement capability.
                ``(2) Such enforcement capability shall be designed to
            achieve 90 percent compliance with such code in any State
            within 1 year after the date of the Secretary's determination
            that such State is out of compliance with this section.
                ``(3) The Secretary may set and collect reasonable
            inspection fees to cover the costs of inspections required for
            such enforcement. Revenue from fees collected shall be
            available to the Secretary to carry out the requirements of
            this section upon appropriation.
                ``(4) In any jurisdiction to which this subsection applies,
            the Secretary shall coordinate enforcement of the national
            energy efficiency building code with State and local code
            enforcement of other building codes.
                ``(5) In any jurisdiction to which this subsection applies,
            the Secretary shall enhance compliance by conducting training
            and education of builders and other professionals in the
            jurisdiction concerning the national energy efficiency building
            code.
                ``(6) The Secretary shall coordinate with professional
            organizations representing code officials, architects,
            engineers, builders, and other experts to develop training
            curricula concerning the national energy efficiency building
            code.
                ``(7) If the Secretary enforces such codes under this
            subsection, the Secretary may, as appropriate, redefine
            violations of such codes.
        ``(g) Enforcement Procedures.--The Secretary shall propose and, not
    later than 3 years after the date of enactment of the American Clean
    Energy and Security Act of 2009, shall define by rule violations of the
    energy efficiency building codes to be enforced by the Secretary
    pursuant to this section, and the penalties that shall apply to
    violators, in any jurisdiction in which the national energy efficiency
    building code has been made applicable under subsection (d)(1). To the
    extent that the Secretary determines that the authority to adopt and
    impose such violations and penalties by rule requires further statutory
    authority, the Secretary shall report such determination to Congress as
    soon as such determination is made, but not later than 1 year after the
    enactment of the American Clean Energy and Security Act of 2009.
        ``(h) Federal Support.--
                ``(1) Allowance allocation for state compliance.--For each
            vintage year from 2012 through 2050, the Administrator shall
            distribute allowances allocated pursuant to section 782(g)(2)
            of the Clean Air Act to the SEED Account for each State. Such
            allowances shall be distributed according to a formula
            established by the Secretary as follows:
                        ``(A) One-fifth in an equal amount to each of the
                    50 States and United States territories.
                        ``(B) Two-fifths as a function of the relative
                    energy use in all buildings in each State in the most
                    recent year for which data is available.
                        ``(C) Two-fifths based on the number of building
                    construction starts recorded in each State, the number
                    of new building permits applied for in each State, or
                    other relevant available data indicating building
                    activity in each State, in the judgment of the
                    Secretary, for the year prior to the year of the
                    distribution.
                ``(2) Allowance allocation to local governments.--In the
            instance that the Secretary certifies that one or more local
            governments are in compliance with this section pursuant to
            subsection (e)(6)(B), the Administrator shall provide to each
            such local government the portion of the emission allowances
            that would have been provided to that State as a function of
            the population of that locality as a proportion of the
            population of that State as a whole.
                ``(3) Unallocated allowances.--To the extent that
            allowances are not provided to State or local governments for
            lack of certification in any year, those allowances shall be
            added to the amount provided to those States and local
            governments that are certified as eligible in that year.
                ``(4) Use of allowances.--Each State or each local
            government shall use such emission allowances as it receives
            pursuant to this section exclusively for the purposes of this
            section, including covering a reasonable portion of the costs
            of the development, adoption, implementation, and enforcement
            of a State or local energy efficiency building code that meets
            the national building code energy efficiency targets, or the
            national energy efficiency building code. In a State where
            local governments provide substantially all building code
            enforcement, a minimum of 50 percent of the allowance value
            received pursuant to this section shall be distributed to local
            governments as a function of the relative populations of such
            localities. In a State where local and State governments share
            building code enforcement duties, the State and local shares of
            allowance value required for enforcement shall be allocated in
            proportion to the number of building inspections performed by
            each level of government, and the share for local governments
            shall be distributed as a function of the relative populations
            of such localities. States shall further ensure that the
            allowance value made available pursuant to section 782 of the
            Clean Air Act and section 132 of the American Clean Energy and
            Security Act of 2009 is provided to the applicable State or
            local governmental entities as necessary to adopt and implement
            energy efficiency building codes, provide training for
            inspectors, ensure compliance, and provide such other functions
            as necessary. Actions taken by local authorities pursuant to
            this section shall constitute an acceptable use of funds
            authorized pursuant to the Energy Efficiency and Conservation
            Block Grant program under section 544 of the Energy
            Independence and Security Act of 2007 (42 U.S.C. 17154).
        ``(i) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary of Energy $25,000,000, and such
    additional sums as may be necessary to provide enforcement of a
    national energy efficiency building code, for each of fiscal years 2010
    through 2020, and such sums thereafter as may be necessary to support
    the purposes of this section.
        ``(j) Annual Reports by Secretary.--The Secretary shall annually
    submit to Congress, and publish in the Federal Register, a report on--
                ``(1) the status of national energy efficiency building
            codes;
                ``(2) the status of energy efficiency building code
            adoption and compliance in the States;
                ``(3) the implementation of this section;
                ``(4) the status of Federal enforcement of building codes,
            including coordination with State and local enforcement, and
            the extent and resolution of any conflicts between the national
            energy efficiency building code and other residential and
            commercial building codes in force in the same jurisdictions;
            and
                ``(5) impacts of past action under this section, and
            potential impacts of further action, on lifetime energy use by
            buildings, including resulting energy and cost savings.''.

    SEC. 202. BUILDING RETROFIT PROGRAM.

        (a) Definitions.--For purposes of this section:
                (1) Assisted housing.--The term ``assisted housing'' means
            those properties receiving project-based assistance pursuant to
            section 202 of the Housing Act of 1959 (12 U.S.C. 1701q),
            section 811 of the Cranston-Gonzalez National Affordable
            Housing Act (42 U.S.C. 8013), section 8 of the United States
            Housing Act of 1937 (42 U.S.C. 1437f), or similar programs.
                (2) Nonresidential building.--The term ``nonresidential
            building'' means a building with a primary use or purpose other
            than residential housing, including any building used for
            commercial offices, schools, academic and other public and
            private institutions, nonprofit organizations including faith-
            based organizations, hospitals, hotels, and other
            nonresidential purposes. Such buildings shall include mixed-use
            properties used for both residential and nonresidential
            purposes in which more than half of building floor space is
            nonresidential.
                (3) Performance-based building retrofit program.--The term
            ``performance-based building retrofit program'' means a program
            that determines building energy efficiency success based on
            actual measured savings after a retrofit is complete, as
            evidenced by energy invoices or evaluation protocols.
                (4) Prescriptive building retrofit program.--The term
            ``prescriptive building retrofit program'' means a program that
            projects building retrofit energy efficiency success based on
            the known effectiveness of measures prescribed to be included
            in a retrofit.
                (5) Public housing.--The term ``public housing'' means
            properties receiving assistance under section 9 of the United
            States Housing Act of 1937 (42 U.S.C. 1437g).
                (6) Recommissioning; retrocommissioning.--The terms
            ``recommissioning'' and ``retrocommissioning'' have the meaning
            given those terms in section 543(f)(1) of the National Energy
            Conservation Policy Act (42 U.S.C. 8253(f)(1)).
                (7) Residential building.--The term ``residential
            building'' means a building whose primary use is residential.
            Such buildings shall include single-family homes (both attached
            and detached), owner-occupied units in larger buildings with
            their own dedicated space-conditioning systems, apartment
            buildings, multi-unit condominium buildings, public housing,
            assisted housing, and buildings used for both residential and
            nonresidential purposes in which more than half of building
            floor space is residential.
                (8) State energy program.--The term ``State Energy
            Program'' means the program under part D of title III of the
            Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.).
        (b) Establishment.--The Administrator shall develop and implement,
    in consultation with the Secretary of Energy, standards for a national
    energy and environmental building retrofit policy for single-family and
    multifamily residences. The Administrator shall develop and implement,
    in consultation with the Secretary of Energy and the Director of
    Commercial High-Performance Green Buildings, standards for a national
    energy and environmental building retrofit policy for nonresidential
    buildings. The programs to implement the residential and nonresidential
    policies based on the standards developed under this section shall
    together be known as the Retrofit for Energy and Environmental
    Performance (REEP) program.
        (c) Purpose.--The purpose of the REEP program is to facilitate the
    retrofitting of existing buildings across the United States to achieve
    maximum cost-effective energy efficiency improvements and significant
    improvements in water use and other environmental attributes.
        (d) Federal Administration.--
                (1) Existing programs.--In creating and operating the REEP
            program--
                        (A) the Administrator shall make appropriate use of
                    existing programs, including the Energy Star program
                    and in particular the Environmental Protection Agency
                    Energy Star for Buildings program; and
                        (B) the Secretary of Energy shall make appropriate
                    use of existing programs, including delegating
                    authority to the Director of Commercial High-
                    Performance Green Buildings appointed under section 421
                    of the Energy Independence and Security Act of 2007 (42
                    U.S.C. 17081), who shall designate and provide funding
                    to support a high-performance green building
                    partnership consortium pursuant to subsection (f) of
                    such section to support efforts under this section.
                (2) Consultation and coordination.--The Administrator and
            the Secretary of Energy shall consult with and coordinate with
            the Secretary of Housing and Urban Development in carrying out
            the REEP program with regard to retrofitting of public housing
            and assisted housing. As a result of such consultation, the
            Administrator shall establish standards to ensure that
            retrofits of public housing and assisted housing funded
            pursuant to this section are cost-effective, including
            opportunities to address the potential co-performance of repair
            and replacement needs that may be supported with other forms of
            Federal assistance. Owners of public housing or assisted
            housing receiving funding through the REEP program shall agree
            to continue to provide affordable housing consistent with the
            provisions of the authorizing legislation governing each
            program for an additional period commensurate with the funding
            received, as determined in accordance with guidelines
            established by the Secretary of Housing and Urban Development.
                (3) Assistance.--The Administrator and the Secretary of
            Energy shall provide consultation and assistance to State and
            local agencies for the establishment of revolving loan funds,
            loan guarantees, or other forms of financial assistance under
            this section.
        (e) State and Local Administration.--
                (1) Designation and delegation.--A State may designate one
            or more agencies or entities, including those regulated by the
            State, to carry out the purposes of this section, but shall
            designate one entity or individual as the principal point of
            contact for the Administrator regarding the REEP Program. The
            designated State agency, agencies, or entities may delegate
            performance of appropriate elements of the REEP program, upon
            their request and subject to State law, to counties,
            municipalities, appropriate public agencies, and other
            divisions of local government, as well as to entities regulated
            by the State. In making any such designation or delegation, a
            State shall give priority to entities that administer existing
            comprehensive retrofit programs, including those under the
            supervision of State utility regulators. States shall maintain
            responsibility for meeting the standards and requirements of
            the REEP program. In any State that elects not to administer
            the REEP program, a unit of local government may propose to do
            so within its jurisdiction, and if the Administrator finds that
            such local government is capable of administering the program,
            the Administrator may provide allowances to that local
            government, prorated according to the population of the local
            jurisdiction relative to the population of the State, for
            purposes of the REEP program.
                (2) Employment.--States and local government entities may
            administer a REEP program in a manner that authorizes public or
            regulated investor-owned utilities, building auditors and
            inspectors, contractors, nonprofit organizations, for-profit
            companies, and other entities to perform audits and retrofit
            services under this section. A State may provide incentives for
            retrofits without direct participation by the State or its
            agents, so long as the resulting savings are measured and
            verified. A State or local administrator of a REEP program
            shall seek to ensure that sufficient qualified entities are
            available to support retrofit activities so that building
            owners have a competitive choice among qualified auditors,
            raters, contractors, and providers of services related to
            retrofits. Nothing in this section is intended to deny the
            right of a building owner to choose the specific providers of
            retrofit services to engage for a retrofit project in that
            owner's building.
                (3) Equal incentives for equal improvement.--In general,
            the States should strive to offer the same levels of incentives
            for retrofits that meet the same efficiency improvement goals,
            regardless of whether the State, its agency or entity, or the
            building owner has conducted the retrofit achieving the
            improvement, provided the improvement is measured and verified.
        (f) Elements of Reep Program.--The Administrator, in consultation
    with the Secretary of Energy, shall establish goals, guidelines,
    practices, and standards for accomplishing the purpose stated in
    subsection (c), and shall annually review and, as appropriate, revise
    such goals, guidelines, practices, and standards. The program under
    this section shall include the following:
                (1) Residential Energy Services Network (RESNET) or
            Building Performance Institute (BPI) analyst certification of
            residential building energy and environment auditors,
            inspectors, and raters, or an equivalent certification system
            as determined by the Administrator.
                (2) BPI certification or licensing by States of residential
            building energy and environmental retrofit contractors, or an
            equivalent certification or licensing system as determined by
            the Administrator.
                (3) Provision of BPI, RESNET, or other appropriate
            information on equipment and procedures, as determined by the
            Administrator, that contractors can use to test the energy and
            environmental efficiency of buildings effectively (such as
            infrared photography and pressurized testing, and tests for
            water use and indoor air quality).
                (4) Provision of clear and effective materials to describe
            the testing and retrofit processes for typical buildings.
                (5) Guidelines for offering and managing prescriptive
            building retrofit programs and performance-based building
            retrofit programs for residential and nonresidential buildings.
                (6) Guidelines for applying recommissioning and
            retrocommissioning principles to improve a building's
            operations and maintenance procedures.
                (7) A requirement that building retrofits conducted
            pursuant to a REEP program utilize, especially in all air-
            conditioned buildings, roofing materials with high solar energy
            reflectance, unless inappropriate due to green roof management,
            solar energy production, or for other reasons identified by the
            Administrator, in order to reduce energy consumption within the
            building, increase the albedo of the building's roof, and
            decrease the heat island effect in the area of the building,
            without reduction of otherwise applicable ceiling insulation
            standards.
                (8) Determination of energy savings in a performance-based
            building retrofit program through--
                        (A) for residential buildings, comparison of before
                    and after retrofit scores on the Home Energy Rating
                    System (HERS) Index, where the final score is produced
                    by an objective third party;
                        (B) for nonresidential buildings, Environmental
                    Protection Agency Portfolio Manager benchmarks; or
                        (C) for either residential or nonresidential
                    buildings, use of an Administrator-approved simulation
                    program by a contractor with the appropriate
                    certification, subject to appropriate software
                    standards and verification of at least 15 percent of
                    all work done, or such other percentage as the
                    Administrator may determine.
                (9) Guidelines for utilizing the Energy Star Portfolio
            Manager, the Home Energy Rating System (HERS) rating system,
            Home Performance with Energy Star program approvals, and any
            other tools associated with the retrofit program.
                (10) Requirements and guidelines for post-retrofit
            inspection and confirmation of work and energy savings.
                (11) Detailed descriptions of funding options for the
            benefit of State and local governments, along with model forms,
            accounting aids, agreements, and guides to best practices.
                (12) Guidance on opportunities for--
                        (A) rating or certifying retrofitted buildings as
                    Energy Star buildings, or as green buildings under a
                    recognized green building rating system;
                        (B) assigning Home Energy Rating System (HERS) or
                    similar ratings; and
                        (C) completing any applicable building performance
                    labels.
                (13) Sample materials for publicizing the program to
            building owners, including public service announcements and
            advertisements.
                (14) Processes for tracking the numbers and locations of
            buildings retrofitted under the REEP program, with information
            on projected and actual savings of energy and its value over
            time.
        (g) Requirements.--As a condition of receiving allowances for the
    REEP program pursuant to this Act, a State or qualifying local
    government shall--
                (1) adopt the standards for training, certification of
            contractors, certification of buildings, and post-retrofit
            inspection as developed by the Administrator for residential
            and nonresidential buildings, respectively, except as necessary
            to match local conditions, needs, efficiency opportunities, or
            other local factors, or to accord with State laws or
            regulations, and then only after the Administrator approves
            such a variance;
                (2) establish fiscal controls and accounting procedures
            (which conform to generally accepted government accounting
            principles) sufficient to ensure proper accounting during
            appropriate accounting periods for payments received and
            disbursements, and for fund balances; and
                (3) agree to make not less than 10 percent of allowance
            value received pursuant to section 132(c)(2) for dedicated
            funding of its REEP program available on a preferential basis
            for retrofit projects proposed for public housing and assisted
            housing, provided that--
                        (A) none of such funds shall be used for demolition
                    of such housing;
                        (B) such retrofits not shall not be used to justify
                    any increase in rents charged to residents of such
                    housing; and
                        (C) owners of such housing shall agree to continue
                    to provide affordable housing consistent with the
                    provisions of the authorizing legislation governing
                    each program for an additional period commensurate with
                    the funding received.
    The Administrator shall conduct or require each State to have such
    independent financial audits of REEP-related funding as the
    Administrator considers necessary or appropriate to carry out the
    purposes of this section.
        (h) Options to Support Reep Program.--The emission allowances
    provided pursuant to this Act to the States SEED Accounts shall support
    the implementation through State REEP programs of alternate means of
    creating incentives for, or reducing financial barriers to, improved
    energy and environmental performance in buildings, consistent with this
    section, including--
                (1) implementing prescriptive building retrofit programs
            and performance-based building retrofit programs;
                (2) providing credit enhancement, interest rate subsidies,
            loan guarantees, or other credit support;
                (3) providing initial capital for public revolving fund
            financing of retrofits, with repayments by beneficiary building
            owners over time through their tax payments, calibrated to
            create net positive cash flow to the building owner;
                (4) providing funds to support utility-operated retrofit
            programs with repayments over time through utility rates,
            calibrated to create net positive cash flow to the building
            owner, and transferable from one building owner to the next
            with the building's utility services;
                (5) providing funds to local government programs to provide
            REEP services and financial assistance; and
                (6) other means proposed by State and local agencies,
            subject to the approval of the Administrator.
        (i) Support for Program.--
                (1) Use of allowances.--Direct Federal support for the REEP
            program is provided through the emission allowances allocated
            to the States' SEED Accounts pursuant to section 132 of this
            Act. To the extent that a State provides allowances to local
            governments within the State to implement elements of the REEP
            Program, that shall be deemed a distribution of such allowances
            to units of local government pursuant to subsection (c)(1) of
            that section.
                (2) Initial award limits.--Except as provided in paragraph
            (3), State and local REEP programs may make per-building direct
            expenditures for retrofit improvements, or their equivalent in
            indirect or other forms of financial support, from funds
            derived from the sale of allowances received directly from the
            Administrator in amounts not to exceed the following amounts
            per unit:
                        (A) Residential building program.--
                                (i) Awards.--For residential buildings--
                                        (I) support for a free or low-cost
                                    detailed building energy audit that
                                    prescribes measures sufficient to
                                    achieve at least a 20 percent reduction
                                    in energy use, by providing an
                                    incentive equal to the documented cost
                                    of such audit, but not more than $200,
                                    in addition to any earned by achieving
                                    a 20 percent or greater efficiency
                                    improvement;
                                        (II) a total of $1,000 for a
                                    combination of measures, prescribed in
                                    an audit conducted under subclause (I),
                                    designed to reduce energy consumption
                                    by more than 10 percent, and $2,000 for
                                    a combination of measures prescribed in
                                    such an audit, designed to reduce
                                    energy consumption by more than 20
                                    percent;
                                        (III) $3,000 for demonstrated
                                    savings of 20 percent, pursuant to a
                                    performance-based building retrofit
                                    program; and
                                        (IV) $1,000 for each additional 5
                                    percentage points of energy savings
                                    achieved beyond savings for which
                                    funding is provided under subclause
                                    (II) or (III).
                            Funding shall not be provided under clauses
                            (II) and (III) for the same energy savings.
                                (ii) Maximum percentage.--Awards under
                            clause (i) shall not exceed 50 percent of
                            retrofit costs for each building. For buildings
                            with multiple residential units, awards under
                            clause (i) shall not be greater than 50 percent
                            of the total cost of retrofitting the building,
                            prorated among individual residential units on
                            the basis of relative costs of the retrofit. In
                            the case of public housing and assisted
                            housing, the 50 percent contribution matching
                            the contribution from REEP program funds may
                            come from any other source, including other
                            Federal funds.
                                (iii) Additional awards.--Additional awards
                            may be provided for purposes of increasing
                            energy efficiency, for buildings achieving at
                            least 20 percent energy savings using funding
                            provided under clause (i), in the form of
                            grants of not more than $600 for measures
                            projected or measured (using an appropriate
                            method approved by the Administrator) to
                            achieve at least 35 percent potable water
                            savings through equipment or systems with an
                            estimated service life of not less than 7
                            years, and not more than an additional $20 may
                            be provided for each additional one percent of
                            such savings, up to a maximum total grant of
                            $1,200.
                        (B) Nonresidential building program.--
                                (i) Awards.--For nonresidential buildings--
                                        (I) support for a free or low-cost
                                    detailed building energy audit that
                                    prescribes, as part of a energy-
                                    reducing measures sufficient to achieve
                                    at least a 20 percent reduction in
                                    energy use, by providing an incentive
                                    equal to the documented cost of such
                                    audit, but not more than $500, in
                                    addition to any award earned by
                                    achieving a 20 percent or greater
                                    efficiency improvement;
                                        (II) $0.15 per square foot of
                                    retrofit area for demonstrated energy
                                    use reductions from 20 percent to 30
                                    percent;
                                        (III) $0.75 per square foot for
                                    demonstrated energy use reductions from
                                    30 percent to 40 percent;
                                        (IV) $1.60 per square foot for
                                    demonstrated energy use reductions from
                                    40 percent to 50 percent; and
                                        (V) $2.50 per square foot for
                                    demonstrated energy use reductions
                                    exceeding 50 percent.
                                (ii) Maximum percentage.--Amounts provided
                            under subclauses (II) through (V) of clause (i)
                            combined shall not exceed 50 percent of the
                            total retrofit cost of a building. In
                            nonresidential buildings with multiple units,
                            such awards shall be prorated among individual
                            units on the basis of relative costs of the
                            retrofit.
                                (iii) Additional awards.--Additional awards
                            may be provided, for buildings achieving at
                            least 20 percent energy savings using funding
                            provided under clause (i), as follows:
                                        (I) Water.--For purposes of
                                    increasing energy efficiency, grants
                                    may be made for whole building potable
                                    water use reduction (using an
                                    appropriate method approved by the
                                    Administrator) for up to 50 percent of
                                    the total retrofit cost, including
                                    amounts up to--
                                                (aa) $24.00 per thousand
                                            gallons per year of potable
                                            water savings of 40 percent or
                                            more;
                                                (bb) $27.00 per thousand
                                            gallons per year of potable
                                            water savings of 50 percent or
                                            more; and
                                                (cc) $30.00 per thousand
                                            gallons per year of potable
                                            water savings of 60 percent or
                                            more.
                                        (II) Environmental improvements.--
                                    Additional awards of up to $1,000 may
                                    be granted for the inclusion of other
                                    environmental attributes that the
                                    Administrator, in consultation with the
                                    Secretary, identifies as contributing
                                    to energy efficiency. Such attributes
                                    may include, but are not limited to
                                    waste diversion and the use of
                                    environmentally preferable materials
                                    (including salvaged, renewable, or
                                    recycled materials, and materials with
                                    no or low-VOC content). The
                                    Administrator may recommend that States
                                    develop such standards as are necessary
                                    to account for local or regional
                                    conditions that may affect the
                                    feasibility or availability of
                                    identified resources and attributes.
                                (iv) Indoor air quality minimum.--
                            Nonresidential buildings receiving incentives
                            under this section must satisfy at a minimum
                            the most recent version of ASHRAE Standard 62.1
                            for ventilation, or the equivalent as
                            determined by the Administrator. A State may
                            issue a waiver from this requirement to a
                            building project on a showing that such
                            compliance is infeasible due to the physical
                            constraints of the building's existing
                            ventilation system, or such other limitations
                            as may be specified by the Administrator.
                        (C) Disaster damaged buildings.--Any source of
                    funds, including Federal funds provided through the
                    Robert T. Stafford Disaster Relief and Emergency
                    Assistance Act, shall qualify as the building owner's
                    50 percent contribution, in order to match the
                    contribution of REEP funds, so long as the REEP funds
                    are only used to improve the energy efficiency of the
                    buildings being reconstructed. In addition, the
                    appropriate Federal agencies providing assistance to
                    building owners through the Robert T. Stafford Disaster
                    Relief and Emergency Assistance Act shall make
                    information available, following a disaster, to
                    building owners rebuilding disaster damaged buildings
                    with assistance from the Act, that REEP funds may be
                    used for energy efficiency improvements.
                        (D) Historic buildings.--Notwithstanding
                    subparagraphs (A) and (B), a building in or eligible
                    for the National Register of Historic Places shall be
                    eligible for awards under this paragraph in amounts up
                    to 120 percent of the amounts set forth in
                    subparagraphs (A) and (B).
                        (E) Supplemental support.--State and local
                    governments may supplement the per-building
                    expenditures under this paragraph with funding from
                    other sources.
                (3) Adjustment.--The Administrator may adjust the specific
            dollar limits funded by the sale of allowances pursuant to
            paragraph (2) in years subsequent to the second year after the
            date of enactment of this Act, and every 2 years thereafter, as
            the Administrator determines necessary to achieve optimum cost-
            effectiveness and to maximize incentives to achieve energy
            efficiency within the total building award amounts provided in
            that paragraph, and shall publish and hold constant such
            revised limits for at least 2 years.
        (j) Report to Congress.--The Administrator shall conduct an annual
    assessment of the achievements of the REEP program in each State, shall
    prepare an annual report of such achievements and any recommendations
    for program modifications, and shall provide such report to Congress at
    the end of each fiscal year during which funding or other resources
    were made available to the States for the REEP Program.
        (k) Other Sources of Federal Support.--
                (1) Additional state energy program funds.--Any Federal
            funding provided to a State Energy Program that is not required
            to be expended for a different federally designated purpose may
            be used to support a REEP program.
                (2) Program administration.--State Energy Offices or
            designated State agencies may expend up to 10 percent of
            available allowance value provided under this section for
            program administration.
                (3) Authorization of appropriations.--There are authorized
            to be appropriated for the purposes of this section, for each
            of fiscal years 2010, 2011, 2012, and 2013--
                        (A) $50,000,000 to the Administrator for program
                    administration costs; and
                        (B) $20,000,000 to the Secretary of Energy for
                    program administration costs.

    SEC. 203. ENERGY EFFICIENT MANUFACTURED HOMES.

        (a) Definitions.--In this section:
                (1) Manufactured home.--The term ``manufactured home'' has
            the meaning given such term in section 603 of the National
            Manufactured Housing Construction and Safety Standards Act of
            1974 (42 U.S.C. 5402).
                (2) Energy star qualified manufactured home.--The term
            ``Energy Star qualified manufactured home'' means a
            manufactured home that has been designed, produced, and
            installed in accordance with Energy Star's guidelines by an
            Energy Star certified plant.
        (b) Purpose.--The purpose of this section is to assist low-income
    households residing in manufactured homes constructed prior to 1976 to
    save energy and energy expenditures by providing support toward the
    purchase of new Energy Star qualified manufactured homes.
        (c) State Implementation of Program.--
                (1) Manufactured home replacement program.--Any State may
            provide to the owner of a manufactured home constructed prior
            to 1976 a rebate to use toward the purchase of a new Energy
            Star qualified manufactured home pursuant to this section.
                (2) Use of allowances.--Direct Federal support for the
            program established in this section is provided through the
            emission allowances allocated to the States' SEED Accounts
            pursuant to section 132 of this Act. To the extent that a State
            provides allowances to local governments within the State to
            implement this program, that shall be deemed a distribution of
            such allowances to units of local government pursuant to
            subsection (c)(1) of that section.
                (3) Rebates.--
                        (A) Primary residence requirement.--A rebate
                    described under paragraph (1) may only be made to an
                    owner of a manufactured home constructed prior to 1976
                    that is used on a year-round basis as a primary
                    residence.
                        (B) Dismantling and replacement.--A rebate
                    described under paragraph (1) may be made only if the
                    manufactured home constructed prior to 1976 will be--
                                (i) rendered unusable for human habitation
                            (including appropriate recycling); and
                                (ii) replaced, in the same general
                            location, as determined by the applicable State
                            agency, with an Energy Star qualified
                            manufactured home.
                        (C) Single rebate.--A rebate described under
                    paragraph (1) may not be provided to any owner of a
                    manufactured home constructed prior to 1976 that was or
                    is a member of a household for which any other member
                    of the household was provided a rebate pursuant to this
                    section.
                        (D) Eligible households.--To be eligible to receive
                    a rebate described under paragraph (1), an owner of a
                    manufactured home constructed prior to 1976 shall
                    demonstrate to the applicable State agency that the
                    total income of all members the owner's household does
                    not exceed 200 percent of the Federal poverty level for
                    income in the applicable area.
                        (E) Advance availability.--A rebate may be provided
                    under this section in a manner to facilitate the
                    purchase of a new Energy Star qualified manufactured
                    home.
                (4) Rebate limitation.--Rebates provided by States under
            this section shall not exceed $7,500 per manufactured home from
            any value derived from the use of emission allowances provided
            to the State pursuant to section 132.
                (5) Use of state funds.--A State providing rebates under
            this section may supplement the amount of such rebates under
            paragraph (4) by any additional amount is from State funds and
            other sources, including private donations or grants from
            charitable organizations.
                (6) Coordination with similar programs.--
                        (A) State programs.--A State conducting an existing
                    program that has the purpose of replacing manufactured
                    homes constructed prior to 1976 with Energy Star
                    qualified manufactured homes, may use allowance value
                    provided under section 782 of the Clean Air Act to
                    support such a program, provided such funding does not
                    exceed the rebate limitation amount under paragraph
                    (4).
                        (B) Federal programs.--The Secretary of Energy
                    shall coordinate with and seek to achieve the purpose
                    of this section through similar Federal programs
                    including--
                                (i) the Weatherization Assistance Program
                            under part A of title IV of the Energy
                            Conservation and Production Act (42 U.S.C. 6861
                            et seq.); and
                                (ii) the program under part D of title III
                            of the Energy Policy and Conservation Act (42
                            U.S.C. 6321 et seq.).
                        (C) Coordination with other state agencies.--A
                    State agency using allowance value to administer the
                    program under this section may coordinate its efforts,
                    and share funds for administration, with other State
                    agencies involved in low-income housing programs.
                (7) Administrative expenses.--A State using allowance value
            under this section may expend not more than 10 percent of such
            value for administrative expenses related to this program.

    SEC. 204. BUILDING ENERGY PERFORMANCE LABELING PROGRAM.

        (a) Establishment.--
                (1) Purpose.--The Administrator shall establish a building
            energy performance labeling program with broad applicability to
            the residential and commercial markets to enable and encourage
            knowledge about building energy performance by owners and
            occupants and to inform efforts to reduce energy consumption
            nationwide.
                (2) Components.--In developing such program, the
            Administrator shall--
                        (A) consider existing programs, such as
                    Environmental Protection Agency's Energy Star program,
                    the Home Energy Rating System (HERS) Index, and
                    programs at the Department of Energy;
                        (B) support the development of model performance
                    labels for residential and commercial buildings; and
                        (C) utilize incentives and other means to spur use
                    of energy performance labeling of public and private
                    sector buildings nationwide.
        (b) Data Assessment for Building Energy Performance.--
                (1) Initial report.--Not later than 90 days after the date
            of enactment of this Act, the Administrator shall provide to
            Congress, as well as to the Secretary of Energy and the Office
            of Management and Budget, a report identifying--
                        (A) all principal building types for which
                    statistically significant energy performance data
                    exists to serve as the basis of measurement protocols
                    and labeling requirements for achieved building energy
                    performance; and
                        (B) those building types for which additional data
                    are required to enable the development of such
                    protocols and requirements.
                (2) Additional reports.--Additional updated reports shall
            be provided under this subsection as often as The Administrator
            considers practicable, but not less than every 2 years.
        (c) Building Data Acquisition.--
                (1) Resource requirements.--For all principal building
            types identified under subsection (b), the Secretary of Energy,
            not later than 90 days after a report by the Administrator
            under subsection (b), shall provide to Congress, the
            Administrator, and the Office of Management and Budget a
            statement of additional resources needed, if any, to fully
            develop the relevant data, as well as the anticipated timeline
            for data development.
                (2) Consultation.--The Secretary of Energy shall consult
            with the Administrator concerning the Administrator's ability
            to use data series for these additional building types to
            support the achieved performance component in the labeling
            program.
                (3) Improvements to building energy consumption
            databases.--
                        (A) Commercial database.--The Secretary of Energy
                    shall support improvements to the Commercial Buildings
                    Energy Consumption Survey (CBECS) as authorized by
                    section 205(k) of the Department of Energy Organization
                    Act (42 U.S.C. 7135(k))--
                                (i) to enable complete and robust data for
                            the actual energy performance of principal
                            building types currently covered by survey;
                                (ii) to cover additional building types as
                            identified by the Administrator under
                            subsection (b)(1)(B), to enable the development
                            of achieved performance measurement protocols
                            are developed for at least 90 percent of all
                            major commercial building types within 5 years
                            after the date of enactment of this Act; and
                                (iii) to include third-party audits of
                            random data samplings to ensure the quality and
                            accuracy of survey information.
                        (B) Residential databases.--The Administrator, in
                    consultation with the Energy Information Administration
                    and the Secretary of Energy, shall support improvements
                    to the Residential Energy Consumption Survey (RECS) as
                    authorized by section 205(k) of the Department of
                    Energy Organization Act (42 U.S.C. 7135(k)), or such
                    other residential energy performance databases as the
                    Administrator considers appropriate, to aid the
                    development of achieved performance measurement
                    protocols for residential building energy use for at
                    least 90 percent of the residential market within 5
                    years after the date of enactment of this Act.
                        (C) Consultation.--The Secretary of Energy and the
                    Administrator shall consult with public, private, and
                    nonprofit sector representatives from the building
                    industry and real estate industry to assist in the
                    evaluation and improvement of building energy
                    performance databases and labeling programs.
        (d) Identification of Measurement Protocols for Achieved
    Performance.--
                (1) Proposed protocols and requirements.--At the earliest
            practicable date, but not later than 1 year after identifying a
            building type under subsection (b)(1)(A), the Administrator
            shall propose a measurement protocol for that building type and
            a requirement detailing how to use that protocol in completing
            applicable commercial or residential performance labels created
            pursuant to this section.
                (2) Final rule.--After providing for notice and comment,
            the Administrator shall publish a final rule containing a
            measurement protocol and the corresponding requirements for
            applying that protocol. Such a rule--
                        (A) shall define the minimum period for measurement
                    of energy use by buildings of that type and other
                    details for determining achieved performance, to
                    include leased buildings or parts thereof;
                        (B) shall identify necessary data collection and
                    record retention requirements; and
                        (C) may specify transition rules and exemptions for
                    classes of buildings within the building type.
        (e) Procedures for Evaluating Designed Performance.--The
    Administrator shall develop protocols for evaluating the designed
    performance of individual building types. The Administrator may conduct
    such feasibility studies and demonstration projects as are necessary to
    evaluate the sufficiency of proposed protocols for designed
    performance.
        (f) Creation of Building Energy Performance Labeling Program.--
                (1) Model label.--Not later than 1 year after the date of
            enactment of this Act, the Administrator shall propose a model
            building energy label that provides a format--
                        (A) to display achieved performance and designed
                    performance data;
                        (B) that may be tailored for residential and
                    commercial buildings, and for single-occupancy and
                    multitenanted buildings; and
                        (C) to display other appropriate elements
                    identified during the development of measurement
                    protocols under subsections (d) and (e).
                (2) Inclusions.--Nothing in this section shall require the
            inclusion on such a label of designed performance data where
            impracticable or not cost effective, or to preclude the display
            of both achieved performance and designed performance data for
            a particular building where both such measures are available,
            practicable, and cost effective.
                (3) Existing programs.--In developing the model label, the
            Administrator shall consider existing programs, including--
                        (A) the Environmental Protection Agency's Energy
                    Star Portfolio Manager program and the California HERS
                    II Program Custom Approach for the achieved performance
                    component of the label;
                        (B) the Home Energy Rating System (HERS) Index
                    system for the designed performance component of the
                    label; and
                        (C) other Federal and State programs, including the
                    Department of Energy's related programs on building
                    technologies and those of the Federal Energy Management
                    Program.
                (4) Final rule.--After providing for notice and comment,
            the Administrator shall publish a final rule containing the
            label applicable to covered building types.
        (g) Demonstration Projects for Labeling Program.--
                (1) In general.--The Administrator shall conduct building
            energy performance labeling demonstration projects for
            different building types--
                        (A) to ensure the sufficiency of the current
                    Commercial Buildings Energy Consumption Survey and
                    other data to serve as the basis for new measurement
                    protocols for the achieved performance component of the
                    building energy performance labeling program;
                        (B) to inform the development of measurement
                    protocols for building types not currently covered by
                    the Commercial Buildings Energy Consumption Survey; and
                        (C) to identify any additional information that
                    needs to be developed to ensure effective use of the
                    model label.
                (2) Participation.--Such demonstration projects shall
            include participation of--
                        (A) buildings from diverse geographical and climate
                    regions;
                        (B) buildings in both urban and rural areas;
                        (C) single-family residential buildings;
                        (D) multihousing residential buildings with more
                    than 50 units, including at least one project that
                    provides affordable housing to individuals of diverse
                    incomes;
                        (E) single-occupant commercial buildings larger
                    than 30,000 square feet;
                        (F) multitenanted commercial buildings larger than
                    50,000 square feet; and
                        (G) buildings from both the public and private
                    sectors.
                (3) Priority.--Priority in the selection of demonstration
            projects shall be given to projects that facilitate large-scale
            implementation of the labeling program for samples of buildings
            across neighborhoods, geographic regions, cities, or States.
                (4) Findings.--The Administrator shall report any findings
            from demonstration projects under this subsection, including an
            identification of any areas of needed data improvement, to the
            Department of Energy's Energy Information Administration and
            Building Technologies Program.
                (5) Coordination.--The Administrator and the Secretary of
            Energy shall coordinate demonstration projects undertaken
            pursuant to this subsection with those undertaken as part of
            the Zero-Net-Energy Commercial Buildings Initiative adopted
            under section 422 of the Energy Independence and Security Act
            of 2007 (42 U.S.C. 17082).
        (h) Implementation of Labeling Program.--
                (1) In general.--The Administrator, in consultation with
            the Secretary of Energy, shall work with all State Energy
            Offices established pursuant to part D of title III of the
            Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.) or
            other State authorities as necessary for the purpose of
            implementing the labeling program established under this
            section for commercial and residential buildings.
                (2) Outreach to local authorities.--The Administrator
            shall, acting in consultation and coordination with the
            respective States, encourage use of the labeling program by
            counties and other localities to broaden access to information
            about building energy use, for example, through disclosure of
            building label contents in tax, title, and other records those
            localities maintain. For this purpose, the Administrator shall
            develop an electronic version of the label and information that
            can be readily transmitted and read in widely-available
            computer programs but is protected from unauthorized
            manipulation.
                (3) Means of implementation.--In adopting the model
            labeling program established under this section, a State shall
            seek to ensure that labeled information be made accessible to
            the public in a manner so that owners, lenders, tenants,
            occupants, or other relevant parties can utilize it. Such
            accessibility may be accomplished through--
                        (A) preparation, and public disclosure of the label
                    through filing with tax and title records at the time
                    of--
                                (i) a building audit conducted with support
                            from Federal or State funds;
                                (ii) a building energy-efficiency retrofit
                            conducted in response to such an audit;
                                (iii) a final inspection of major
                            renovations or additions made to a building in
                            accordance with a building permit issued by a
                            local government entity;
                                (iv) a sale that is recorded for title and
                            tax purposes consistent with paragraph (8);
                                (v) a new lien recorded on the property for
                            more than a set percentage of the assessed
                            value of the property, if that lien reflects
                            public financial assistance for energy-related
                            improvements to that building; or
                                (vi) a change in ownership or operation of
                            the building for purposes of utility billing;
                            or
                        (B) other appropriate means.
                (4) State implementation of program.--
                        (A) Eligibility.--A State may become eligible to
                    utilize allowance value to implement this program by--
                                (i) adopting by statute or regulation a
                            requirement that buildings be assessed and
                            labeled, consistent with the labeling
                            requirements of the program established under
                            this section; or
                                (ii) adopting a plan to implement a model
                            labeling program consistent with this section
                            within 1 year of enactment of this Act,
                            including the establishment of that program
                            within 3 years after the date of enactment of
                            this Act, and demonstrating continuous progress
                            under that plan.
                        (B) Use of allowances.--Direct Federal support for
                    the program established in this section is provided
                    through the emission allowances allocated to the
                    States' SEED Accounts pursuant to section 132 of this
                    Act. To the extent that a State provides allowances to
                    local governments within the State to implement this
                    program, that shall be deemed a distribution of such
                    allowances to units of local government pursuant to
                    subsection (c)(1) of that section.
                (5) Guidance.--The Administrator may create or identify
            model programs and resources to provide guidance to offer to
            States and localities for creating labeling programs consistent
            with the model program established under this section.
                (6) Progress report.--The Administrator, in consultation
            with the Secretary of Energy, shall provide a progress report
            to Congress not later than 3 years after the date of enactment
            of this Act that--
                        (A) evaluates the effectiveness of efforts to
                    advance use of the model labeling program by States and
                    localities;
                        (B) recommends any legislative changes necessary to
                    broaden the use of the model labeling program; and
                        (C) identifies any changes to broaden the use of
                    the model labeling program that the Administrator has
                    made or intends to make that do not require additional
                    legislative authority.
                (7) State information.--The Administrator may require
            States to report to the Administrator information that the
            Administrator requires to provide the report required under
            paragraph (6).
                (8) Prevention of disruption of sales transactions.--No
            State shall implement a new labeling program pursuant to this
            section in a manner that requires the labeling of a building to
            occur after a contract has been executed for the sale of that
            building and before the sales transaction is completed.
        (i) Implementation of Labeling Program in Federal Buildings.--
                (1) Use of labeling program.--The Secretary of Energy and
            the Administrator shall use the labeling program established
            under this section to evaluate energy performance in the
            facilities of the Department of Energy and the Environmental
            Protection Agency, respectively, to the extent practicable, and
            shall encourage and support implementation efforts in other
            Federal agencies.
                (2) Annual progress report.--The Secretary of Energy and
            Administrator shall provide an annual progress report to
            Congress and the Office of Management and Budget detailing
            efforts to implement this subsection, as well as any best
            practices or needed resources identified as a result of such
            efforts.
        (j) Public Outreach.--The Secretary of Energy and the
    Administrator, in consultation with nonprofit and industry stakeholders
    with specialized expertise, and in conjunction with other energy
    efficiency public awareness efforts, shall establish a business and
    consumer education program to increase awareness about the importance
    of building energy efficiency and to facilitate widespread use of the
    labeling program established under this section.
        (k) Definitions.--In this section:
                (1) Building type.--The term ``building type'' means a
            grouping of buildings as identified by their principal building
            activities, or as grouped by their use, including office
            buildings, laboratories, libraries, data centers, retail
            establishments, hotels, warehouses, and educational buildings.
                (2) Measurement protocol.--The term ``measurement
            protocol'' means the methodology, prescribed by the
            Administrator, for defining a benchmark for building energy
            performance for a specific building type and for measuring that
            performance against the benchmark.
                (3) Achieved performance.--The term ``achieved
            performance'' means the actual energy consumption of a building
            as compared to a baseline building of the same type and size,
            determined by actual consumption data normalized for
            appropriate variables.
                (4) Designed performance.--The term ``designed
            performance'' means the energy consumption performance a
            building would achieve if operated consistent with its design
            intent for building energy use, utilizing a standardized set of
            operational conditions informed by data collected or confirmed
            during an energy audit.
        (l) Authorization of Appropriations.--There are authorized to be
    appropriated--
                (1) to the Administrator $50,000,000 for implementation of
            this section for each fiscal year from 2010 through 2020; and
                (2) to the Secretary of Energy $20,000,000 for
            implementation of this section for fiscal year 2010 and
            $10,000,000 for fiscal years 2011 through 2020.
        (m) New Construction.--This section shall apply only to
    construction beginning after the date of enactment of this Act.

    SEC. 205. TREE PLANTING PROGRAMS.

        (a) Findings.--The Congress finds that--
                (1) the utility sector is the largest single source of
            greenhouse gas emissions in the United States today, producing
            approximately one-third of the country's emissions;
                (2) heating and cooling homes accounts for nearly 60
            percent of residential electricity usage in the United States;
                (3) shade trees planted in strategic locations can reduce
            residential cooling costs by as much as 30 percent;
                (4) shade trees have significant clean-air benefits
            associated with them;
                (5) every 100 healthy large trees removes about 300 pounds
            of air pollution (including particulate matter and ozone) and
            about 15 tons of carbon dioxide from the air each year;
                (6) tree cover on private property and on newly-developed
            land has declined since the 1970s, even while emissions from
            transportation and industry have been rising; and
                (7) in over a dozen test cities across the United States,
            increasing urban tree cover has generated between two and five
            dollars in savings for every dollar invested in such tree
            planting.
        (b) Definitions.--As used in this section:
                (1) The term ``Secretary'' refers to the Secretary of
            Energy.
                (2) The term ``retail power provider'' means any entity
            authorized under applicable State or Federal law to generate,
            distribute, or provide retail electricity, natural gas, or fuel
            oil service.
                (3) The term ``tree-planting organization'' means any
            nonprofit or not-for-profit group which exists, in whole or in
            part, to--
                        (A) expand urban and residential tree cover;
                        (B) distribute trees for planting;
                        (C) increase awareness of the environmental and
                    energy-related benefits of trees;
                        (D) educate the public about proper tree planting,
                    care, and maintenance strategies; or
                        (E) carry out any combination of the foregoing
                    activities.
                (4) The term ``tree-siting guidelines'' means a
            comprehensive list of science-based measurements outlining the
            species and minimum distance required between trees planted
            pursuant to this section, in addition to the minimum required
            distance to be maintained between such trees and--
                        (A) building foundations;
                        (B) air conditioning units;
                        (C) driveways and walkways;
                        (D) property fences;
                        (E) preexisting utility infrastructure;
                        (F) septic systems;
                        (G) swimming pools; and
                        (H) other infrastructure as deemed appropriate.
                (5) The terms ``small office'', ``small office buildings'',
            and ``small office settings'' means nonresidential buildings or
            structures zoned for business purposes that are 20,000 square
            feet or less in total area.
        (c) Purposes.--The purpose of this section is to establish a grant
    program to assist retail power providers with the establishment and
    operation of targeted tree-planting programs in residential and small
    office settings, for the following purposes:
                (1) Reducing the peak-load demand for electricity from
            residences and small office buildings during the summer months
            through direct shading of buildings provided by strategically
            planted trees.
                (2) Reducing wintertime demand for energy from residences
            and small office buildings by blocking cold winds from reaching
            such structures, which lowers interior temperatures and drives
            heating demand.
                (3) Protecting public health by removing harmful pollution
            from the air.
                (4) Utilizing the natural photosynthetic and transpiration
            process of trees to lower ambient temperatures and absorb
            carbon dioxide, thus mitigating the effects of climate change.
                (5) Lowering electric bills for residential and small
            office ratepayers by limiting electricity consumption without
            reducing benefits.
                (6) Relieving financial and demand pressure on retail power
            providers that stems from large peak-load energy demand.
                (7) Protecting water quality and public health by reducing
            stormwater runoff and keeping harmful pollutants from entering
            waterways.
                (8) Ensuring that trees are planted in locations that limit
            the amount of public money needed to maintain public and
            electric infrastructure.
        (d) General Authority.--
                (1) Assistance.--The Secretary is authorized to provide
            financial, technical, and related assistance to retail power
            providers to assist with the establishment of new, or continued
            operation of existing, targeted tree-planting programs for
            residences and small office buildings.
                (2) Public recognition initiative.--In carrying out the
            authority provided under this section, the Secretary shall also
            create a national public recognition initiative to encourage
            participation in tree-planting programs by retail power
            providers.
                (3) Eligibility.--Only those programs which utilize
            targeted, strategic tree-siting guidelines to plant trees in
            relation to building location, sunlight, and prevailing wind
            direction shall be eligible for assistance under this section.
                (4) Requirements.--In order to qualify for assistance under
            this section, a tree-planting program shall meet each of the
            following requirements:
                        (A) The program shall provide free or discounted
                    shade-providing or wind-reducing trees to residential
                    and small office consumers interested in lowering their
                    home energy costs.
                        (B) The program shall optimize the electricity-
                    consumption reduction benefit of each tree by planting
                    in strategic locations around a given residence or
                    small office.
                        (C) The program shall either--
                                (i) provide maximum amounts of shade during
                            summer intervals when residences and small
                            offices are exposed to the most sun intensity;
                            or
                                (ii) provide maximum amounts of wind
                            protection during fall and winter intervals
                            when residences and small offices are exposed
                            to the most wind intensity.
                        (D) The program shall use the best available
                    science to create tree siting guidelines which dictate
                    where the optimum tree species are best planted in
                    locations that achieve maximum reductions in consumer
                    energy demand while causing the least disruption to
                    public infrastructure, considering overhead and
                    underground facilities.
                        (E) The program shall receive certification from
                    the Secretary that it is designed to achieve the goals
                    set forth in subparagraphs (A) through (D). In
                    designating criteria for such certification, the
                    Secretary shall collaborate with the United States
                    Forest Service's Urban and Community Forestry Program
                    to ensure that certification requirements are
                    consistent with such above goals.
                (5) New program funding share.--The Secretary shall ensure
            that no less than 30 percent of the funds made available under
            this section are distributed to retail power providers which--
                        (A) have not previously established or operated
                    qualified tree-planting programs; or
                        (B) are operating qualified tree-planting programs
                    which were established no more than 3 years prior to
                    the date of enactment of this section.
        (e) Agreements Between Electricity Providers and Tree-planting
    Organizations.--
                (1) Grant authorization.--In providing assistance under
            this section, the Secretary is authorized to award grants only
            to retail power providers that have entered into binding legal
            agreements with nonprofit tree-planting organizations.
                (2) Conditions of agreement.--Those agreements between
            retail power providers and tree-planting organizations shall
            set forth conditions under which nonprofit tree-planting
            organizations shall provide targeted tree-planting programs
            which may require these organizations to--
                        (A) participate in local technical advisory
                    committees responsible for drafting general tree-siting
                    guidelines and choosing the most effective species of
                    trees to plant in given locations;
                        (B) coordinate volunteer recruitment to assist with
                    the physical act of planting trees in residential
                    locations;
                        (C) undertake public awareness campaigns to educate
                    local residents about the benefits, cost savings, and
                    availability of free shade trees;
                        (D) establish education and information campaigns
                    to encourage recipients to maintain their shade trees
                    over the long term;
                        (E) serve as the point of contact for existing and
                    potential residential participants who have questions
                    or concerns regarding the tree-planting program;
                        (F) require tree recipients to sign agreements
                    committing to voluntary stewardship and care of
                    provided trees;
                        (G) monitor and report on the survival, growth,
                    overall health, and estimated energy savings of
                    provided trees up until the end of their establishment
                    period which shall be no less than 5 years; and
                        (H) ensure that trees planted near existing power
                    lines will not interfere with energized electricity
                    distribution lines when mature, and that no new trees
                    will be planted under or adjacent to high-voltage
                    electric transmission lines without prior consultation
                    with the applicable retail power provider receiving
                    assistance under this section.
                (3) Lack of nonprofit organization.--If qualified nonprofit
            or not-for-profit tree planting organizations do not exist or
            operate within areas served by retail power providers applying
            for assistance under this section, the requirements of this
            section shall apply to binding legal agreements entered into by
            such retail power providers and one of the following entities:
                        (A) Local municipal governments with jurisdiction
                    over the urban or suburban forest.
                        (B) The State Forester for the State in which the
                    tree planting program will operate.
                        (C) The United States Forest Service's Urban and
                    Community Forestry representative for the State in
                    which the tree-planting program will operate.
                        (D) A landscaping services company that is--
                                (i) identified in consultation with a
                            national or State nonprofit or not-for-profit
                            tree-planting organization;
                                (ii) licensed to operate in the State in
                            which the tree-planting program will operate;
                            and
                                (iii) a business as defined by the United
                            States Census Bureau's 2007 North American
                            Industry Classification System Code 561730.
        (f) Technical Advisory Committees.--
                (1) Description.--In order to qualify for assistance under
            this section, the retail power provider shall establish and
            consult with a local technical advisory committee which shall
            provide advice and consultation to the program, and may--
                        (A) design and adopt an approved plant list that
                    emphasizes the use of hardy, noninvasive tree species
                    and, where geographically appropriate, the use of
                    native, or site-adapted, or low water-use shade trees;
                        (B) design and adopt planting, installation, and
                    maintenance specifications and create a process for
                    inspection and quality control;
                        (C) ensure that tree recipients are educated to
                    care for and maintain their trees over the long term;
                        (D) help the public become more engaged and
                    educated in the planting and care of shade trees;
                        (E) prioritize which sites receive trees, giving
                    preference to locations with the most potential for
                    energy conservation and secondary preference to areas
                    where the average annual income is below the regional
                    median; and
                        (F) assist with monitoring and collection of data
                    on tree health, tree survival, and energy conservation
                    benefits generated under this section.
                (2) Compensation.--Individuals serving on local technical
            advisory committees shall not receive compensation for their
            service.
                (3) Composition.--Local technical advisory committees shall
            be composed of representatives from public, private, and
            nongovernmental agencies with expertise in demand-side energy
            efficiency management, urban forestry, or arboriculture, and
            shall be composed of the following:
                        (A) Up to 4 persons, but no less than one person,
                    representing the retail power provider receiving
                    assistance under this section.
                        (B) Up to 4 persons, but no less than one person,
                    representing the local tree-planting organization which
                    will partner with the retail power provider to carry
                    out this section.
                        (C) Up to 3 persons representing local nonprofit
                    conservation or environmental organizations. Preference
                    shall be given to those entities which are organized
                    under section 501(c)(3) of the Internal Revenue Code of
                    1986, and which have demonstrated expertise engaging
                    the public in energy conservation, energy efficiency,
                    or green building practices or a combination thereof,
                    such that no single organization is represented by more
                    than one individual under this paragraph.
                        (D) Up to 2 persons representing a local affordable
                    housing agency, affordable housing builder, or
                    community development corporation.
                        (E) Up to 3, but no less than one, persons
                    representing local city or county government for each
                    municipality where a shade tree-planting program will
                    take place; at least one of these representatives shall
                    be the city or county forester, city or county
                    arborist, or functional equivalent.
                        (F) Up to one person representing the local
                    government agency responsible for management of roads,
                    sewers, and infrastructure, including but not limited
                    to public works departments, transportation agencies,
                    or equivalents.
                        (G) Up to 3 persons representing the nursery and
                    landscaping industry.
                        (H) Up to 3 persons representing the research
                    community or academia with expertise in natural
                    resources or energy management issues.
                (4) Chairperson.--Each local technical advisory committee
            shall elect a chairperson to preside over Committee meetings,
            act as a liaison to governmental and other outside entities,
            and direct the general operation of the committee; only
            committee representatives from paragraph (3)(A) or paragraph
            (3)(B) of this subsection shall be eligible to act as local
            technical advisory committee chairpersons.
                (5) Credentials.--At least one of the members of each local
            technical advisory committee shall be certified with one or
            more of the following credentials: International Society of
            Arboriculture; Certified Arborist, ISA; Certified Arborist
            Municipal Specialist, ISA; Certified Arborist Utility
            Specialist, ISA; Board Certified Master Arborist; or Registered
            Landscape Architect recommended by the American Society of
            Landscape Architects.
        (g) Cost-share Program.--
                (1) Federal share.--The Federal share of support for
            projects funded under this section shall not exceed 50 percent
            of the cost of such project and shall be provided on a matching
            basis.
                (2) Non-federal share.--The non-Federal share of such costs
            may be paid or contributed by any governmental or
            nongovernmental entity other than from funds derived directly
            or indirectly from an agency or instrumentality of the United
            States.
        (h) Rulemaking.--
                (1) Rulemaking period.--The Secretary shall be authorized
            to solicit comments and initiate a rulemaking period that shall
            last no more than 6 months after the date of enactment of this
            section.
                (2) Competitive grant rule.--At the conclusion of the
            rulemaking period under paragraph (1), the Secretary shall
            promulgate a rule governing a public, competitive grants
            process through which retail power providers may apply for
            Federal support under this section.
        (i) Nonduplicity.--Nothing in this section shall be construed to
    supersede, duplicate, cancel, or negate the programs or authorities
    provided under section 9 of the Cooperative Forestry Assistance Act of
    1978 (92 Stat. 369; Public Law 95-313; 16 U.S.C. 2105).
        (j) Authorization of Appropriations.--There are hereby authorized
    to be appropriated such sums as may be necessary for the implementation
    of this section.

    SEC. 206. ENERGY EFFICIENCY FOR DATA CENTER BUILDINGS.

        Section 453(c)(1) of the Energy Independence and Security Act of
    2007 (42 U.S.C. 17112(c)(1)) is amended by inserting ``but not later
    than 2 years after the date of enactment of this Act'' after
    ``described in subsection (b)''.

    SEC. 207. COMMUNITY BUILDING CODE ADMINISTRATION GRANTS.

        (a) Grant Program Authorized.--
                (1) Grant authorization.--The Secretary of Housing and
            Urban Development shall to the extent amounts are made
            available for grants under this section provide grants to local
            building code enforcement departments.
                (2) Competitive awards.--The Secretary shall award grants
            under paragraph (1) on a competitive basis taking into
            consideration the following:
                        (A) The financial need of each building code
                    enforcement department.
                        (B) The benefit to the jurisdiction of having an
                    adequately funded building code enforcement department.
                        (C) The demonstrated ability of each building code
                    enforcement department to work cooperatively with other
                    local code enforcement offices, health departments, and
                    local prosecutorial agencies.
                (3) Maximum amount.--The maximum amount of any grant
            awarded under this subsection shall not exceed $1,000,000.
                (4) Coordination.--The Secretary of Housing and Urban
            Development shall coordinate with the Secretary of Energy to
            ensure that any unnecessarily duplicative funding through
            grants under this section of activities otherwise funded
            through the Department of Energy is minimized or eliminated.
        (b) Required Elements in Grant Proposals.--In order to be eligible
    for a grant under subsection (a), a building code enforcement
    department of a jurisdiction shall submit to the Secretary the
    following:
                (1) A demonstration of the jurisdiction's needs in
            executing building code enforcement administration.
                (2) A plan for the use of any funds received from a grant
            under this section that addresses the needs discussed in
            paragraph (1) and that is consistent with the authorized uses
            established in subsection (c).
                (3) A plan for local governmental actions to be taken to
            establish and sustain local building code enforcement
            administration functions, without continuing Federal support,
            at a level at least equivalent to that proposed in the grant
            application.
                (4) A plan to create and maintain a program of public
            outreach that includes a regularly updated and readily
            accessible means of public communication, interaction, and
            reporting regarding the services and work of the building code
            enforcement department to be supported by the grant.
                (5) A plan for ensuring the timely and effective
            administrative enforcement of building safety and fire
            prevention violations.
        (c) Use of Funds; Matching Funds.--
                (1) Authorized uses.--Amounts from grants awarded under
            subsection (a) may be used by the grant recipient to supplement
            existing State or local funding for administration of building
            code enforcement, or to supplement allowance value received
            pursuant to this Act for implementation and enforcement of
            energy efficiency building codes. Such amounts may be used to
            increase staffing, provide staff training, increase staff
            competence and professional qualifications, or support
            individual certification or departmental accreditation, or for
            capital expenditures specifically dedicated to the
            administration of the building code enforcement department.
                (2) Additional requirement.--Each building code enforcement
            department receiving a grant under subsection (a) shall empanel
            a code administration and enforcement team consisting of at
            least 1 full-time building code enforcement officer, a city
            planner, and a health planner or similar officer.
                (3) Matching funds required.--
                        (A) In general.--To be eligible to receive a grant
                    under this section, a building code enforcement
                    department shall provide matching, non-Federal funds in
                    the following amount:
                                (i) In the case of a building code
                            enforcement department serving an area with a
                            population of more than 50,000, an amount equal
                            to not less than 50 percent of the total amount
                            of any grant to be awarded under this section.
                                (ii) In the case of a building code
                            enforcement department serving an area with a
                            population of between 20,001 and 50,000, an
                            amount equal to not less than 25 percent of the
                            total amount of any grant to be awarded under
                            this section.
                                (iii) In the case of a building code
                            enforcement department serving an area with a
                            population of less than 20,000, an amount equal
                            to not less than 12.5 percent of the total
                            amount of any grant to be awarded under this
                            section.
                        (B) Economic distress.--
                                (i) In general.--The Secretary may waive
                            the matching fund requirements under
                            subparagraph (A), and institute, by regulation,
                            new matching fund requirements based upon the
                            level of economic distress of the jurisdiction
                            in which the local building code enforcement
                            department seeking such grant is located.
                                (ii) Content of regulations.--Any
                            regulations instituted under clause (i) shall
                            include--
                                        (I) a method that allows for a
                                    comparison of the degree of economic
                                    distress among the local jurisdictions
                                    of grant applicants, as measured by the
                                    differences in the extent of growth
                                    lag, the extent of poverty, and the
                                    adjusted age of housing in such
                                    jurisdiction; and
                                        (II) any other factor determined to
                                    be relevant by the Secretary in
                                    assessing the comparative degree of
                                    economic distress among such
                                    jurisdictions.
                (4) In-kind contributions.--In determining the non-Federal
            share required to be provided under paragraph (3), the
            Secretary shall consider in-kind contributions, not to exceed
            50 percent of the amount that the department contributes in
            non-Federal funds.
                (5) Waiver of matching requirement.--The Secretary shall
            waive the matching fund requirements under paragraph (3) for
            any recipient jurisdiction that has dedicated all building code
            permitting fees to the conduct of local building code
            enforcement.
        (d) Evaluation and Report.--
                (1) In general.--Grant recipients under this section
            shall--
                        (A) be obligated to fully account and report for
                    the use of all grants funds; and
                        (B) provide a report to the Secretary on the
                    effectiveness of the program undertaken by the grantee
                    and any other criteria requested by the Secretary for
                    the purpose of indicating the effectiveness of, and
                    ideas for, refinement of the grant program.
                (2) Report.--The report required under paragraph (1)(B)
            shall include a discussion of--
                        (A) the specific capabilities and functions in
                    local building code enforcement administration that
                    were addressed using funds received under this section;
                        (B) the lessons learned in carrying out the plans
                    supported by the grant; and
                        (C) the manner in which the programs supported by
                    the grant are to be maintained by the grantee.
                (3) Content of reports.--The Secretary shall--
                        (A) require each recipient of a grant under this
                    section to file interim and final reports under
                    paragraph (2) to ensure that grant funds are being used
                    as intended and to measure the effectiveness and
                    benefits of the grant program; and
                        (B) develop and maintain a means whereby the public
                    can access such reports, at no cost, via the Internet.
        (e) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Building code enforcement.--The term ``building code
            enforcement'' means the enforcement of any code, adopted by a
            State or local government, that regulates the construction of
            buildings and facilities to mitigate hazards to life or
            property. Such term includes building codes, electrical codes,
            energy codes, fire codes, fuel gas codes, mechanical codes, and
            plumbing codes.
                (2) Building code enforcement department.--The term
            ``building code enforcement department'' means an inspection or
            enforcement agency of a jurisdiction that is responsible for
            conducting building code enforcement.
                (3) Jurisdiction.--The term ``jurisdiction'' means a city,
            county, parish, city and county authority, or city and parish
            authority having local authority to enforce building codes and
            regulations and to collect fees for building permits.
                (4) Secretary.--The term ``Secretary'' means the Secretary
            of Housing and Urban Development.
        (f) Authorization of Appropriations.--
                (1) In general.--There are authorized to be appropriated
            $20,000,000 for each of fiscal years 2010 through 2014 to the
            Secretary of Housing and Urban Development to carry out the
            provisions of this section.
                (2) Reservation.--From the amount made available under
            paragraph (1), the Secretary may reserve not more than 5
            percent for administrative costs.
                (3) Availability.--Any funds appropriated pursuant to
            paragraph (1) shall remain available until expended.

    SEC. 208. SOLAR ENERGY SYSTEMS BUILDING PERMIT REQUIREMENTS FOR RECEIPT
                  OF COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS.

        Section 104 of the Housing and Community Development Act of 1974
    (42 U.S.C. 5304) is amended by adding at the end the following new
    subsection:
        ``(n) Requirements for Building Permits Regarding Solar Energy
    Systems.--
                ``(1) In general.--A grant under section 106 for a fiscal
            year may be made only if the grantee certifies to the Secretary
            that--
                        ``(A) in the case of a grant under section 106(a)
                    for any Indian tribe or insular area, during such
                    fiscal year the cost of any permit or license, for
                    construction or installation of any solar energy system
                    for any structure, that is required by the tribe or
                    insular area or by any other unit of general local
                    government or other political subdivision of such tribe
                    or insular area, complies with paragraph (2);
                        ``(B) in the case of a grant under section 106(b)
                    for any metropolitan city or urban county, during such
                    fiscal year the cost of any permit or license, for
                    construction or installation of any solar energy system
                    for any structure, that is required by the metropolitan
                    city or urban county, or by any other political
                    subdivision of such city or county, complies with
                    paragraph (2); and
                        ``(C) in the case of a grant under section 106(d)
                    for any State, during such fiscal year the cost of any
                    permit or license, for construction or installation of
                    any solar energy system for any structure, that is
                    required by the State, or by any other unit of general
                    local government within any nonentitlement area of such
                    State, or other political subdivision within any
                    nonentitlement area of such State or such a unit of
                    general local government, complies with paragraph (2).
                ``(2) Limitation on cost.--The cost of permit or license
            for construction or installation of any solar energy system
            complies with this paragraph only if such cost does not exceed
            the following amount:
                        ``(A) Residential structures.--In the case of a
                    structure primarily for residential use, $500.
                        ``(B) Nonresidential structures.--In the case of a
                    structure primarily for nonresidential use, 1.0 percent
                    of the total cost of the installation or construction
                    of the solar energy system, but not in excess of
                    $10,000.
                ``(3) Noncompliance.--If the Secretary determines that a
            grantee of a grant made under section 106 is not in compliance
            with a certification under paragraph (1)--
                        ``(A) the Secretary shall notify the grantee of
                    such determination; and
                        ``(B) if the grantee has not corrected such
                    noncompliance before the expiration of the 6-month
                    period beginning upon notification under subparagraph
                    (A), such grantee shall not be eligible for 5 percent
                    of any amounts awarded under a grant under section 106
                    for the first fiscal year that commences after the
                    expiration of such 6-month period.
                ``(4) Solar energy system.--For purposes of this
            subsection, the term `solar energy system' means, with respect
            to a structure, equipment that uses solar energy to generate
            electricity for, or to heat or cool (or provide hot water for
            use in), such structure.''.

    SEC. 209. PROHIBITION OF RESTRICTIONS ON RESIDENTIAL INSTALLATION OF
                  SOLAR ENERGY SYSTEM.

        (a) Regulations.--Within 180 days after the enactment of this Act,
    the Secretary of Housing and Urban Development, in consultation with
    the Secretary of Energy, shall issue regulations--
                (1) to prohibit any private covenant, contract provision,
            lease provision, homeowners' association rule or bylaw, or
            similar restriction, that impairs the ability of the owner or
            lessee of any residential structure designed for occupancy by 1
            family to install, construct, maintain, or use a solar energy
            system on such residential property; and
                (2) to require that whenever any such covenant, provision,
            rule or bylaw, or restriction requires approval for the
            installation or use of a solar energy system, the application
            for approval shall be processed and approved by the appropriate
            approving entity in the same manner as an application for
            approval of an architectural modification to the property, and
            shall not be willfully avoided or delayed.
        (b) Contents.--The regulations required under subsection (a) shall
    provide that--
                (1) such a covenant, provision, rule or bylaw, or
            restriction impairs the installation, construction,
            maintenance, or use of a solar energy system if it--
                        (A) unreasonably delays or prevents installation,
                    maintenance, or use;
                        (B) unreasonably increases the cost of
                    installation, maintenance, or use; or
                        (C) precludes use of such a system; and
                (2) any fee or cost imposed on the owner or lessee of such
            a residential structure by such a covenant, provision, rule or
            bylaw, or restriction shall be considered unreasonable if--
                        (A) such fee or cost is not reasonable in
                    comparison to the cost of the solar energy system or
                    the value of its use; or
                        (B) treatment of solar energy systems by the
                    covenant, provision, rule or bylaw, or restriction is
                    not reasonable in comparison with treatment of
                    comparable systems by the same covenant, provision,
                    rule or bylaw, or restriction.
        (c) Solar Energy System.--For purposes of this section, the term
    ``solar energy system'' means, with respect to a structure, equipment
    that uses solar energy to generate electricity for, or to heat or cool
    (or provide hot water for use in), such structure.

         Subtitle B--Lighting and Appliance Energy Efficiency Programs

    SEC. 211. LIGHTING EFFICIENCY STANDARDS.

        (a) Outdoor Lighting.--
                (1) Definitions.--
                        (A) Section 340(1) of the Energy Policy and
                    Conservation Act (42 U.S.C. 6311(1)) is amended by
                    striking subparagraph (L) and inserting the following:
                        ``(L) Outdoor luminaires.
                        ``(M) Outdoor high light output lamps.
                        ``(N) Any other type of industrial equipment which
                    the Secretary classifies as covered equipment under
                    section 341(b).''.
                        (B) Section 340 of the Energy Policy and
                    Conservation Act (42 U.S.C. 6311) is amended as adding
                    at the end the following:
                ``(25) The term `luminaire' means a complete lighting unit
            consisting of one or more light sources and ballast(s),
            together with parts designed to distribute the light, to
            position and protect such lamps, and to connect such light
            sources to the power supply.
                ``(26) The term `outdoor luminaire' means a luminaire that
            is listed as suitable for wet locations pursuant to
            Underwriters Laboratories Inc. standard UL 1598 and is labeled
            as `Suitable for Wet Locations' consistent with section
            410.4(A) of the National Electrical Code 2005, or is designed
            for roadway illumination and meets the requirements of Addendum
            A for IESNA TM-15-07: Backlight, Uplight, and Glare (BUG)
            Ratings, except for--
                        ``(A) luminaires designed for outdoor video display
                    images that cannot be used in general lighting
                    applications;
                        ``(B) portable luminaires designed for use at
                    construction sites;
                        ``(C) luminaires designed for continuous immersion
                    in swimming pools and other water features;
                        ``(D) seasonal luminaires incorporating solely
                    individual lamps rated at 10 watts or less;
                        ``(E) luminaires designed to be used in emergency
                    conditions that incorporate a means of charging a
                    battery and a device to switch the power supply to
                    emergency lighting loads automatically upon failure of
                    the normal power supply;
                        ``(F) components used for repair of installed
                    luminaries and that meet the requirements of section
                    342(h);
                        ``(G) a luminaire utilizing an electrode-less
                    fluorescent lamp as the light source;
                        ``(H) decorative gas lighting systems;
                        ``(I) luminaires designed explicitly for lighting
                    for theatrical purposes, including performance, stage,
                    film production, and video production;
                        ``(J) luminaires designed as theme elements in
                    theme/amusement parks and that cannot be used in most
                    general lighting applications;
                        ``(K) luminaires designed explicitly for vehicular
                    roadway tunnels designed to comply with ANSI/IESNA RP-
                    22-05;
                        ``(L) luminaires designed explicitly for hazardous
                    locations meeting UL Standard 844;
                        ``(M) searchlights;
                        ``(N) luminaires that are designed to be recessed
                    into a building, and that cannot be used in most
                    general lighting applications;
                        ``(O) a luminaire rated only for residential
                    applications utilizing a light source or sources
                    regulated under the amendments made by section 321 of
                    the Energy Independence and Security Act of 2007 and
                    with a light output no greater than 2,600 lumens;
                        ``(P) a residential pole-mounted luminaire that is
                    not rated for commercial use utilizing a light source
                    or sources meeting the efficiency requirements of
                    section 231 of the Energy Independence and Security Act
                    of 2007 and mounted on a post or pole not taller than
                    10.5 feet above ground and with a light output not
                    greater than 2,600 lumens;
                        ``(Q) a residential fixture with E12 (Candelabra)
                    bases that is rated for not more than 300 watts total;
                    or
                        ``(R) a residential fixture with medium screw bases
                    that is rated for not more than 145 watts.
                ``(27) The term `outdoor high light outputlamp' means a
            lamp that--
                        ``(A) has a rated lumen output not less than 2601
                    lumens;
                        ``(B) is capable of being operated at a voltage not
                    less than 110 volts and not greater than 300 volts, or
                    driven at a constant current of 6.6 amperes;
                        ``(C) is not a Parabolic Aluminized Reflector lamp;
                    and
                        ``(D) is not a J-type double-ended (T-3) halogen
                    quartz lamp, utilizing R-7S bases, that is manufactured
                    before January 1, 2015.
                ``(28) The term `outdoor lighting control' means a device
            incorporated in a luminaire that receives a signal, from either
            a sensor (such as an occupancy sensor, motion sensor, or
            daylight sensor) or an input signal (including analog or
            digital signals communicated through wired or wireless
            technology), and can adjust the light level according to the
            signal.''.
                (2) Standards.-- Section 342 of the Energy Policy and
            Conservation Act (42 U.S.C. 6313) is amended by adding at the
            end the following:
        ``(g) Outdoor Luminaires.--
                ``(1) Each outdoor luminaire manufactured on or after
            January 1, 2016, shall--
                        ``(A) have an initial luminaire efficacy of at
                    least 50 lumens per watt; and
                        ``(B) be designed to use a light source with a
                    lumen maintenance, calculated as mean rated lumens
                    divided by initial lumens, of at least 0.6.
                ``(2) Each outdoor luminaire manufactured on or after
            January 1, 2018, shall--
                        ``(A) have an initial luminaire efficacy of at
                    least 70 lumens per watt; and
                        ``(B) be designed to use a light source with a
                    lumen maintenance, calculated as mean rated lumens
                    divided by initial lumens, of at least 0.6.
                ``(3) In addition to the requirements of paragraphs (1)
            through (3), each outdoor luminaire manufactured on or after
            January 1, 2016, shall have the capability of producing at
            least two different light levels, including 100 percent and 60
            percent of full lamp output as tested with the maximum rated
            lamp per UL1598 or the manufacturer's maximum specified for the
            luminaire under test. Outdoor luminaries used for roadway
            lighting applications shall be exempt the 2 light level
            requirement.
                ``(4)(A) Not later than January 1, 2022, the Secretary
            shall issue a final rule amending the applicable standards
            established in paragraph (3) if technologically feasible and
            economically justified.
                ``(B) A final rule issued under subparagraph (A) shall
            establish efficiency standards at the maximum level that is
            technically feasible and economically justified, as provided in
            subsections (o) and (p) of section 325. The Secretary may also,
            in such rulemaking, amend or discontinue the product exclusions
            listed in section 340(26)(A) through (P), or amend the lumen
            maintenance requirements in paragraph (2) if the Secretary
            determines that such amendments are consistent with the
            purposes of this Act.
                ``(C) If the Secretary issues a final rule under
            subparagraph (A) establishing amended standards, the final rule
            shall provide that the amended standards apply to products
            manufactured on or after January 1, 2025, or 1 year after the
            date on which the final amended standard is published,
            whichever is later.
        ``(h) Outdoor High Light Output Lamps.--Each outdoor high light
    output lamp manufactured on or after January 1, 2017, shall have a
    lighting efficiency of at least 45 lumens per watt.''.
                (3) Test procedures.-- Section 343(a) of the Energy Policy
            and Conservation Act (42 U.S.C. 6314(a)) is amended by adding
            at the end the following:
                ``(10) Outdoor lighting.--
                        ``(A) With respect to outdoor luminaires and
                    outdoor high light output lamps, the test procedures
                    shall be based upon the test procedures specified in
                    illuminating engineering society procedures LM-79 as of
                    March 1, 2009, and LM-31, and/or other appropriate
                    consensus test procedures developed by the Illuminating
                    Engineering Society or other appropriate consensus
                    standards bodies.
                        ``(B) If illuminating engineering society procedure
                    LM-79 is amended, the Secretary shall amend the test
                    procedures established in subparagraph (A) as necessary
                    to be consistent with the amended LM-79 test procedure,
                    unless the Secretary determines, by rule, published in
                    the Federal Register and supported by clear and
                    convincing evidence, that to do so would not meet the
                    requirements for test procedures under paragraph (2).
                        ``(C) The Secretary may revise the test procedures
                    for outdoor luminaires or outdoor high light output
                    lamps by rule consistent with paragraph (2), and may
                    incorporate as appropriate consensus test procedures
                    developed by the Illuminating Engineering Society or
                    other appropriate consensus standards bodies.''.
                (4) Preemption.-- Section 345 of the Energy Policy and
            Conservation Act (42 U.S.C. 6316) is amended by adding at the
            end the following:
        ``(i)(1) Except as provided in paragraph (2), section 327 shall
    apply to outdoor luminaires to the same extent and in the same manner
    as the section applies under part B.
        ``(2) Any State standard that is adopted on or before January 1,
    2015, pursuant to a statutory requirement to adopt efficiency standards
    for reducing outdoor lighting energy use enacted prior to January 31,
    2008, shall not be preempted.''.
                (5) Energy efficiency standards for certain luminaires.--
            Not later than 1 year after the date of enactment of this Act,
            the Secretary of Energy shall, in consultation with the
            National Electrical Manufacturers Association, collect data for
            United States sales of luminaires described in section
            340(26)(H) and (M) of the Energy Policy and Conservation Act,
            to determine the historical growth rate. If the Secretary finds
            that the growth in market share of such luminaires exceeds
            twice the year-to-year rate of the average of the previous 3
            years, then the Secretary shall within 12 months initiate a
            rulemaking to determine if such exclusion should be eliminated,
            if substitute products exist that perform more efficiently and
            fulfill the performance functions of these luminaires.
        (b) Portable Lighting.--
                (1) Portable light fixtures.--
                        (A) Definitions.--Section 321 of the Energy Policy
                    and Conservation Act (42 U.S.C. 6291) is amended by
                    adding at the end the following:
                ``(67) Art work light fixture.--The term `art work light
            fixture' means a light fixture designed only to be mounted
            directly to an art work and for the purpose of illuminating
            that art work.
                ``(68) LED light engine.--The term `LED light engine' or
            `LED light engine with integral heat sink' means a subsystem of
            an LED light fixture that--
                        ``(A) includes 1 or more LED components,
                    including--
                                ``(i) an LED driver power source with
                            electrical and mechanical interfaces; and
                                ``(ii) an integral heat sink to provide
                            thermal dissipation; and
                        ``(B) may be designed to accept additional
                    components that provide aesthetic, optical, and
                    environmental control.
                ``(69) LED light fixture.--The term `LED light fixture'
            means a complete lighting unit consisting of--
                        ``(A) an LED light source with 1 or more LED lamps
                    or LED light engines; and
                        ``(B) parts--
                                ``(i) to distribute the light;
                                ``(ii) to position and protect the light
                            source; and
                                ``(iii) to connect the light source to
                            electrical power.
                ``(70) Light fixture.--The term `light fixture' means a
            product designed to provide light that includes--
                        ``(A) at least 1 lamp socket; and
                        ``(B) parts--
                                ``(i) to distribute the light;
                                ``(ii) position and protect 1 or more
                            lamps; and
                                ``(iii) to connect 1 or more lamps to a
                            power supply.
                ``(71) Portable light fixture.--
                        ``(A) In general.--The term `portable light
                    fixture' means a light fixture that has a flexible cord
                    and an attachment plug for connection to a nominal 120-
                    volt circuit that--
                                ``(i) allows the user to relocate the
                            product without any rewiring; and
                                ``(ii) typically can be controlled with a
                            switch located on the product or the power cord
                            of the product.
                        ``(B) Exclusions.--The term `portable light
                    fixture' does not include--
                                ``(i) direct plug-in night lights, sun or
                            heat lamps, medical or dental lights, portable
                            electric hand lamps, signs or commercial
                            advertising displays, photographic lamps,
                            germicidal lamps, or light fixtures for marine
                            use or for use in hazardous locations (as those
                            terms are defined in ANSI/NFPA 70 of the
                            National Electrical Code); or
                                ``(ii) decorative lighting strings,
                            decorative lighting outfits, or electric
                            candles or candelabra without lamp shades that
                            are covered by Underwriter Laboratories (UL)
                            standard 588, `Seasonal and Holiday Decorative
                            Products'.''.
                        (B) Coverage.--
                                (i) In general.--Section 322(a) of the
                            Energy Policy and Conservation Act (42 U.S.C.
                            6292(a)) is amended--
                                        (I) by redesignating paragraph (20)
                                    as paragraph (24); and
                                        (II) by inserting after paragraph
                                    (19) the following:
                ``(20) Portable light fixtures.''.
                                (ii) Conforming amendments.--Section 325(l)
                            of the Energy Policy and Conservation Act (42
                            U.S.C. 6295(l)) is amended by striking
                            ``paragraph (19)'' each place it appears in
                            paragraphs (1) and (2) and inserting
                            ``paragraph (24)''.
                        (C) Test procedures.--Section 323(b) of the Energy
                    Policy and Conservation Act (42 U.S.C. 6293(b)) is
                    amended by adding at the end the following:
                ``(19) LED fixtures and led light engines.--Test procedures
            for LED fixtures and LED light engines shall be based on
            Illuminating Engineering Society of North America (IESNA) test
            procedure LM-79, Approved Method for Electrical and Photometric
            Testing of Solid-State Lighting Devices, and IESNA-approved
            test procedure for testing LED light engines.''.
                        (D) Standards.--Section 325 of the Energy Policy
                    and Conservation Act (42 U.S.C. 6295) is amended--
                                (i) by redesignating subsection (ii) as
                            subsection (oo);
                                (ii) in subsection (oo)(2), as redesignated
                            in clause (i) of this subparagraph, by striking
                            ``(hh)'' each place it appears and inserting
                            ``(mm)''; and
                                (iii) by inserting after subsection (hh)
                            the following:
        ``(ii) Portable Light Fixtures.--
                ``(1) In general.--Subject to paragraphs (2) and (3),
            portable light fixtures manufactured on or after January 1,
            2012, shall meet 1 or more of the following requirements:
                        ``(A) Be a fluorescent light fixture that meets the
                    requirements of the Energy Star Program for Residential
                    Light Fixtures, Version 4.2.
                        ``(B) Be equipped with only 1 or more GU-24 line-
                    voltage sockets, not be rated for use with incandescent
                    lamps of any type (as defined in ANSI standards), and
                    meet the requirements of version 4.2 of the Energy Star
                    program for residential light fixtures.
                        ``(C) Be an LED light fixture or a light fixture
                    with an LED light engine and comply with the following
                    minimum requirements:
                                ``(i) Minimum light output: 200 lumens
                            (initial).
                                ``(ii) Minimum LED light engine efficacy:
                            40 lumens/watt installed in fixtures that meet
                            the minimum light fixture efficacy of 29
                            lumens/watt or, alternatively, a minimum LED
                            light engine efficacy of 60 lumens/watt for
                            fixtures that do not meet the minimum light
                            fixture efficacy of 29 lumens/watt.
                                ``(iii) All portable fixtures shall have a
                            minimum LED light fixture efficacy of 29
                            lumens/watt and a minimum LED light engine
                            efficacy of 60 lumens/watt by January 1, 2016.
                                ``(iv) Color Correlated Temperature (CCT):
                            2700K through 4000K.
                                ``(v) Minimum Color Rendering Index (CRI):
                            75.
                                ``(vi) Power factor equal to or greater
                            than 0.70.
                                ``(vii) Portable luminaries that have
                            internal power supplies shall have zero standby
                            power when the luminaire is turned off.
                                ``(viii) LED light sources shall deliver at
                            least 70 percent of initial lumens for at least
                            25,000 hours.
                        ``(D)(i) Be equipped with an ANSI-designated E12,
                    E17, or E26 screw-based socket and be prepackaged and
                    sold together with 1 screw-based compact fluorescent
                    lamp or screw-based LED lamp for each screw-based
                    socket on the portable light fixture.
                        ``(ii) The compact fluorescent or LED lamps
                    prepackaged with the light fixture shall be fully
                    compatible with any light fixture controls incorporated
                    into the light fixture (for example, light fixtures
                    with dimmers shall be packed with dimmable lamps).
                        ``(iii) Compact fluorescent lamps prepackaged with
                    light fixtures shall meet the requirements of the
                    Energy Star Program for CFLs Version 4.0.
                        ``(iv) Screw-based LED lamps shall comply with the
                    minimum requirements described in subparagraph (C).
                        ``(E) Be equipped with 1 or more single-ended, non-
                    screw based halogen lamp sockets (line or low voltage),
                    a dimmer control or high-low control, and be rated for
                    a maximum of 100 watts.
                ``(2) Review.--
                        ``(A) Review.--The Secretary shall review the
                    criteria and standards established under paragraph (1)
                    to determine if revised standards are technologically
                    feasible and economically justified.
                        ``(B) Components.--The review shall include
                    consideration of--
                                ``(i) whether a separate compliance
                            procedure is still needed for halogen fixtures
                            described in subparagraph (E) and, if
                            necessary, what an appropriate standard for
                            halogen fixtures shall be;
                                ``(ii) whether the specific technical
                            criteria described in subparagraphs (A), (C),
                            and (D)(iii) should be modified; and
                                ``(iii) which fixtures should be exempted
                            from the light fixture efficacy standard as of
                            January 1, 2016, because the fixtures are
                            primarily decorative in nature (as defined by
                            the Secretary) and, even if exempted, are
                            likely to be sold in limited quantities.
                        ``(C) Timing.--
                                ``(i) Determination.--Not later than
                            January 1, 2014, the Secretary shall publish
                            amended standards, or a determination that no
                            amended standards are justified, under this
                            subsection.
                                ``(ii) Standards.--Any standards under this
                            paragraph shall take effect on January 1, 2016.
                ``(3) Art work light fixtures.--Art work light fixtures
            manufactured on or after January 1, 2012, shall--
                        ``(A) comply with paragraph (1); or
                        ``(B)(i) contain only ANSI-designated E12 screw-
                    based line-voltage sockets;
                        ``(ii) have not more than 3 sockets;
                        ``(iii) be controlled with an integral high/low
                    switch;
                        ``(iv) be rated for not more than 25 watts if
                    fitted with 1 socket; and
                        ``(v) be rated for not more than 15 watts per
                    socket if fitted with 2 or 3 sockets.
                ``(4) Exception from preemption.--Notwithstanding section
            327, Federal preemption shall not apply to a regulation
            concerning portable light fixtures adopted by the California
            Energy Commission on or before January 1, 2014.''.
                (2) GU-24 base lamps.--
                        (A) Definitions.--Section 321 of the Energy Policy
                    and Conservation Act (42 U.S.C. 6291) (as amended by
                    paragraph (1)(A)) is amended by adding at the end the
                    following:
                ``(72) GU-24.--The term `GU-24' means the designation of a
            lamp socket, based on a coding system by the International
            Electrotechnical Commission, under which--
                        ``(A) `G' indicates a holder and socket type with 2
                    or more projecting contacts, such as pins or posts;
                        ``(B) `U' distinguishes between lamp and holder
                    designs of similar type that are not interchangeable
                    due to electrical or mechanical requirements; and
                        ``(C) 24 indicates the distance in millimeters
                    between the electrical contact posts.
                ``(73) GU-24 adaptor.--
                        ``(A) In general.--The term `GU-24 Adaptor' means a
                    1-piece device, pig-tail, wiring harness, or other such
                    socket or base attachment that--
                                ``(i) connects to a GU-24 socket on 1 end
                            and provides a different type of socket or
                            connection on the other end; and
                                ``(ii) does not alter the voltage.
                        ``(B) Exclusion.--The term `GU-24 Adaptor' does not
                    include a fluorescent ballast with a GU-24 base.
                ``(74) GU-24 base lamp.--`GU-24 base lamp' means a light
            bulb designed to fit in a GU-24 socket.''.
                        (B) Standards.--Section 325 of the Energy Policy
                    and Conservation Act (42 U.S.C. 6295) (as amended by
                    paragraph (1)(D)) is amended by inserting after
                    subsection (ii) the following:
        ``(jj) GU-24 Base Lamps.--
                ``(1) In general.--A GU-24 base lamp shall not be an
            incandescent lamp as defined by ANSI.
                ``(2) GU-24 adaptors.--GU-24 adaptors shall not adapt a GU-
            24 socket to any other line voltage socket.''.
                (3) Standards for certain incandescent reflector lamps.--
            Section 325(i) of the Energy Policy and Conservation Act (42
            U.S.C. 6295(i)), as amended by section 161(a)(12) of this Act,
            is amended by adding at the end the following:
                ``(9) Certain incandescent reflector lamps.--(A) No later
            than 12 months after enactment of this paragraph, the Secretary
            shall publish a final rule establishing standards for
            incandescent reflector lamp types described in paragraph
            (1)(D). Such standards shall be effective on July 1, 2013.
                ``(B) Any rulemaking for incandescent reflector lamps
            completed after enactment of this section shall consider
            standards for all incandescent reflector lamps, inclusive of
            those specified in paragraph (1)(C).
                ``(10) Reflector lamps.--No later than January 1, 2015, the
            Secretary shall publish a final rule establishing and amending
            standards for reflector lamps, including incandescent reflector
            lamps. Such standards shall be effective no sooner than 3 years
            after publication of the final rule. Such rulemaking shall
            consider incandescent and nonincandescent technologies. Such
            rulemaking shall consider a new metric other than lumens-per-
            watt based on the photometric distribution of light from such
            lamps.''.

    SEC. 212. OTHER APPLIANCE EFFICIENCY STANDARDS.

        (a) Standards for Water Dispensers, Hot Food Holding Cabinets, and
    Portable Electric Spas.--
                (1) Definitions.--Section 321 of the Energy Policy and
            Conservation Act (42 U.S.C. 6291), as amended by section 211 of
            this Act, is further amended by adding at the end the
            following:
                ``(75) The term `water dispenser' means a factory-made
            assembly that mechanically cools and heats potable water and
            that dispenses the cooled or heated water by integral or remote
            means.
                ``(76) The term `bottle-type water dispenser' means a
            drinking water dispenser designed for dispensing both hot and
            cold water that uses a removable bottle or container as the
            source of potable water.
                ``(77) The term `commercial hot food holding cabinet' means
            a heated, fully-enclosed compartment with one or more solid or
            glass doors that is designed to maintain the temperature of hot
            food that has been cooked in a separate appliance. Such term
            does not include heated glass merchandising cabinets, drawer
            warmers, commercial hot food holding cabinets with interior
            volumes of less than 8 cubic feet, or cook-and-hold appliances.
                ``(78) The term `portable electric spa' means a factory-
            built electric spa or hot tub, supplied with equipment for
            heating and circulating water.''.
                (2) Coverage.--Section 322(a) of the Energy Policy and
            Conservation Act (42 U.S.C. 6292(a)), as amended by section
            211(b)(1)(B) of this Act, is further amended by inserting after
            paragraph (20) the following new paragraphs:
                ``(21) Bottle type water dispensers.
                ``(22) Commercial hot food holding cabinets.
                ``(23) Portable electric spas.''.
                (3) Test procedures.--Section 323(b) of the Energy Policy
            and Conservation Act (42 U.S.C. 6293(b)), as amended by section
            211(b)(1)(C) of this Act, is further amended by adding at the
            end the following:
                ``(20) Bottle type water dispensers.--Test procedures for
            bottle type water dispensers shall be based on `Energy Star
            Program Requirements for Bottled Water Coolers version 1.1'
            published by the Environmental Protection Agency. Units with an
            integral, automatic timer shall not be tested using section 4D,
            `Timer Usage,' of the test criteria.
                ``(21) Commercial hot food holding cabinets.--Test
            procedures for commercial hot food holding cabinets shall be
            based on the test procedures described in ANSI/ASTM F2140-01
            (Test for idle energy rate-dry test). Interior volume shall be
            based on the method shown in the Environmental Protection
            Agency's `Energy Star Program Requirements for Commercial Hot
            Food Holding Cabinets' as in effect on August 15, 2003.
                ``(22) Portable electric spas.--Test procedures for
            portable electric spas shall be based on the test method for
            portable electric spas contained in section 1604, title 20,
            California Code of Regulations as amended on December 3, 2008.
            When the American National Standards Institute publishes a test
            procedure for portable electric spas, the Secretary shall
            revise the Department of Energy's procedure.''.
                (4) Standards.--Section 325 of the Energy Policy and
            Conservation Act (42 U.S.C. 6295), as amended by section 211 of
            this Act, is further amended by adding after subsection (jj)
            the following:
        ``(kk) Bottle Type Water Dispensers.--Effective January 1, 2012,
    bottle-type water dispensers designed for dispensing both hot and cold
    water shall not have standby energy consumption greater than 1.2
    kilowatt-hours per day.
        ``(ll) Commercial Hot Food Holding Cabinets.--Effective January 1,
    2012, commercial hot food holding cabinets with interior volumes of 8
    cubic feet or greater shall have a maximum idle energy rate of 40 watts
    per cubic foot of interior volume.
        ``(mm) Portable Electric Spas.--Effective January 1, 2012, portable
    electric spas shall not have a normalized standby power greater than
    5(V\2/3\) Watts where V=the fill volume in gallons.
        ``(nn) Revisions.--The Secretary of Energy shall consider revisions
    to the standards in subsections (kk), (ll), and (mm) in accordance with
    subsection (o) and publish a final rule no later than January 1, 2013
    establishing such revised standards, or make a finding that no
    revisions are technically feasible and economically justified. Any such
    revised standards shall take effect January 1, 2016.''.
        (b) Commercial Furnace Efficiency Standards.--Section 342(a) of the
    Energy Policy and Conservation Act (42 U.S.C. 6312(a)) is amended by
    inserting after paragraph (10) the following new paragraph:
                ``(11) Warm air furnaces.--Each warm air furnace with an
            input rating of 225,000 Btu per hour or more and manufactured
            after January 1, 2011, shall meet the following standard
            levels:
                        ``(A) Gas-fired units.--
                                ``(i) Minimum thermal efficiency of 80
                            percent.
                                ``(ii) Include an interrupted or
                            intermittent ignition device.
                                ``(iii) Have jacket losses not exceeding
                            0.75 percent of the input rating.
                                ``(iv) Have either power venting or a flue
                            damper.
                        ``(B) Oil-fired units.--
                                ``(i) Minimum thermal efficiency of 81
                            percent.
                                ``(ii) Have jacket losses not exceeding
                            0.75 percent of the input rating.
                                ``(iii) Have either power venting or a flue
                            damper.''.

    SEC. 213. APPLIANCE EFFICIENCY DETERMINATIONS AND PROCEDURES.

        (a) Definition of Energy Conservation Standard.--Section 321(6) of
    the Energy Policy and Conservation Act (42 U.S.C. 6291(6)) is amended
    to read as follows:
                ``(6) Energy conservation standard.--
                        ``(A) In general.--The term `energy conservation
                    standard' means 1 or more performance standards that--
                                ``(i) for covered products (excluding
                            clothes washers, dishwashers, showerheads,
                            faucets, water closets, and urinals), prescribe
                            a minimum level of energy efficiency or a
                            maximum quantity of energy use, determined in
                            accordance with test procedures prescribed
                            under section 323;
                                ``(ii) for showerheads, faucets, water
                            closets, and urinals, prescribe a minimum level
                            of water efficiency or a maximum quantity of
                            water use, determined in accordance with test
                            procedures prescribed under section 323; and
                                ``(iii) for clothes washers and
                            dishwashers--
                                        ``(I) prescribe a minimum level of
                                    energy efficiency or a maximum quantity
                                    of energy use, determined in accordance
                                    with test procedures prescribed under
                                    section 323; and
                                        ``(II) may include a minimum level
                                    of water efficiency or a maximum
                                    quantity of water use, determined in
                                    accordance with those test procedures.
                        ``(B) Inclusions.--The term `energy conservation
                    standard' includes--
                                ``(i) 1 or more design requirements, if the
                            requirements were established--
                                        ``(I) on or before the date of
                                    enactment of this subclause;
                                        ``(II) as part of a direct final
                                    rule under section 325(p)(4); or
                                        ``(III) as part of a final rule
                                    published on or after January 1, 2012,
                                    and
                                ``(ii) any other requirements that the
                            Secretary may prescribe under section 325(r).
                        ``(C) Exclusion.--The term `energy conservation
                    standard' does not include a performance standard for a
                    component of a finished covered product, unless
                    regulation of the component is specifically authorized
                    or established pursuant to this title.''.
        (b) Adopting Consensus Test Procedures and Test Procedures in Use
    Elsewhere.--Section 323(b) of the Energy Policy and Conservation Act
    (42 U.S.C. 6293(b)), as amended by sections 211 and 212 of this Act, is
    further amended by adding the following new paragraph after paragraph
    (22):
                ``(23) Consensus and alternate test procedures.--
                        ``(A) Receipt of joint recommendation or alternate
                    testing procedure.--On receipt of--
                                ``(i) a statement that is submitted jointly
                            by interested persons that are fairly
                            representative of relevant points of view
                            (including representatives of manufacturers of
                            covered products, States, and efficiency
                            advocates), as determined by the Secretary, and
                            contains recommendations with respect to the
                            testing procedure for a covered product; or
                                ``(ii) a submission of a testing procedure
                            currently in use for a covered product by a
                            State, nation, or group of nations--
                                        ``(I) if the Secretary determines
                                    that the recommended testing procedure
                                    contained in the statement or
                                    submission is in accordance with
                                    subsection (b)(3), the Secretary may
                                    issue a final rule that establishes an
                                    energy or water conservation testing
                                    procedure that is published
                                    simultaneously with a notice of
                                    proposed rulemaking that proposes a new
                                    or amended energy or water conservation
                                    testing procedure that is identical to
                                    the testing procedure established in
                                    the final rule to establish the
                                    recommended testing procedure (referred
                                    to in this paragraph as a `direct final
                                    rule'); or
                                        ``(II) if the Secretary determines
                                    that a direct final rule cannot be
                                    issued based on the statement or
                                    submission, the Secretary shall publish
                                    a notice of the determination, together
                                    with an explanation of the reasons for
                                    the determination.
                        ``(B) Public comment.--The Secretary shall solicit
                    public comment for a period of at least 110 days with
                    respect to each direct final rule issued by the
                    Secretary under subparagraph (A)(ii)(I).
                        ``(C) Withdrawal of direct final rules.--
                                ``(i) In general.--Not later than 120 days
                            after the date on which a direct final rule
                            issued under subparagraph (A)(ii)(I) is
                            published in the Federal Register, the
                            Secretary shall withdraw the direct final rule
                            if--
                                        ``(I) the Secretary receives 1 or
                                    more adverse public comments relating
                                    to the direct final rule under
                                    subparagraph (B)or any alternative
                                    joint recommendation; and
                                        ``(II) based on the rulemaking
                                    record relating to the direct final
                                    rule, the Secretary determines that
                                    such adverse public comments or
                                    alternative joint recommendation may
                                    provide a reasonable basis for
                                    withdrawing the direct final rule under
                                    paragraph (3) or any other applicable
                                    law.
                                ``(ii) Action on withdrawal.--On withdrawal
                            of a direct final rule under clause (i), the
                            Secretary shall--
                                        ``(I) proceed with the notice of
                                    proposed rulemaking published
                                    simultaneously with the direct final
                                    rule as described in subparagraph
                                    (A)(ii)(I); and
                                        ``(II) publish in the Federal
                                    Register the reasons why the direct
                                    final rule was withdrawn.
                                ``(iii) Treatment of withdrawn direct final
                            rules.--A direct final rule that is withdrawn
                            under clause (i) shall not be considered to be
                            a final rule for purposes of subsection (b).
                        ``(D) Effect of paragraph.--Nothing in this
                    paragraph authorizes the Secretary to issue a direct
                    final rule based solely on receipt of more than 1
                    statement containing recommended test procedures
                    relating to the direct final rule.''.
        (c) Updating Television Test Methods.--Section 323(b) of the Energy
    Policy and Conservation Act (42 U.S.C. 6293(b)), as amended by sections
    211 and 212 of this Act, and subsection (b) of this section, is further
    amended by adding at the end the following new paragraph:
                ``(24) Televisions.--(A) On the date of enactment of this
            paragraph, Appendix H to Subpart B of Part 430 of the United
            States Code of Federal Regulations, `Uniform Test Method for
            Measuring the Energy Consumption of Television Sets', is
            repealed.
                ``(B) No later than 12 months after the date of enactment
            of this paragraph the Secretary shall publish in the Federal
            Register a final rule prescribing a new test method for
            televisions.''.
        (d) Criteria for Prescribing New or Amended Standards.--(1) Section
    325(o)(2)(B)(i) of the Energy Policy and Conservation Act (42 U.S.C.
    6295(o)(2)(B)(i)) is amended as follows:
                (A) By striking ``and'' at the end of subclause (VI).
                (B) By redesignating subclause (VII) as subclause (XI).
                (C) By inserting the following new subclauses after
            subclause (VI):
                ``(VII) the estimated value of the carbon dioxide and other
            emission reductions that will be achieved by virtue of the
            higher energy efficiency of the covered products resulting from
            the imposition of the standard;
                ``(VIII) the estimated impact of standards for a particular
            product on average consumer energy prices;
                ``(IX) the increased energy efficiency that may be
            attributable to the installation of Smart Grid technologies or
            capabilities in the covered products, if applicable in the
            determination of the Secretary;
                ``(X) the availability in the United States or in other
            nations of examples or prototypes of covered products that
            achieve significantly higher efficiency standards for energy or
            for water; and''.
        (2) Section 325(o)(2)(B)(iii) of such Act is amended as follows:
                (A) By striking ``three'' and inserting ``5''.
                (B) By inserting after the first sentence the following
            ``For products with an average expected useful life of less
            than 5 years, such rebuttable presumption shall be determined
            utilizing 75 percent of the product's average expected useful
            life as a multiplier instead of 5.''.
                (C) By striking the last sentence and inserting the
            following: ``Such a presumption may be rebutted only if the
            Secretary finds, based on clear, convincing, and reliable
            evidence, that--
                ``(I) such standard level would cause serious and
            unavoidable hardship to the average consumer of the product, or
            to manufacturers supplying a significant portion of the market
            for the product, that substantially outweighs the standard
            level's benefits;
                ``(II) the standard and implementing regulations cannot be
            designed to avoid or mitigate the hardship identified under
            subclause (I), through the adoption of regional standards
            consistent with paragraph (6) of this subsection, or other
            reasonable means consistent with this part;
                ``(III) the same or substantially similar hardship would
            not occur under a standard adopted in the absence of the
            presumption, but that otherwise meets the requirements of this
            section; and
                ``(IV) the hardship cannot be avoided or mitigated pursuant
            the procedures specified in section 504 of the Department of
            Energy Organization Act (42 U.S.C. 7194).
    A determination by the Secretary that the criteria triggering such
    presumption are not met, or that the criterion for rebutting the
    presumption are met shall not be taken into consideration in the
    Secretary's determination of whether a standard is economically
    justified.''.
        (e) Obtaining Appliance Information From Manufacturers.--Section
    326(d) of the Energy Policy and Conservation Act (42 U.S.C. 6295(d)) is
    amended to read as follows:
        ``(d) Information Requirements.--(1) For purposes of carrying out
    this part, the Secretary shall publish proposed regulations not later
    than 1 year after the date of enactment of the American Clean Energy
    and Security Act of 2009, and after receiving public comment, final
    regulations not later than 18 months from such date of enactment under
    this part or other provision of law administered by the Secretary,
    which shall require each manufacturer of a covered product to submit
    information or reports to the Secretary on an annual basis in a form
    adopted by the Secretary. Such reports shall include information or
    data with respect to--
                ``(A) the manufacturers' compliance with all requirements
            applicable pursuant to this part;
                ``(B) the economic impact of any proposed energy
            conservation standard;
                ``(C) the manufacturers' annual shipments of each class or
            category of covered products, organized, to the maximum extent
            practicable, by--
                        ``(i) energy efficiency, energy use, and, if
                    applicable, water use;
                        ``(ii) the presence or absence of such efficiency
                    related or energy consuming operational characteristics
                    or components as the Secretary determines are relevant
                    for the purposes of carrying out this part; and
                        ``(iii) the State or regional location of sale, for
                    covered products for which the Secretary may adopt
                    regional standards; and
                ``(D) such other categories of information as the Secretary
            deems relevant to carry out this part, including such other
            information as may be necessary to establish and revise test
            procedures, labeling rules, and energy conservation standards
            and to insure compliance with the requirements of this part.
        ``(2) In adopting regulations under this subsection, the Secretary
    shall consider existing public sources of information, including
    nationally recognized certification programs of trade associations.
        ``(3) The Secretary shall exercise authority under this section in
    a manner designed to minimize unnecessary burdens on manufacturers of
    covered products.
        ``(4) To the extent that they do not conflict with the duties of
    the Secretary in carrying out this part, the provisions of section
    11(d) of the Energy Supply and Environmental Coordination Act of 1974
    (15 U.S.C. 796(d)) shall apply with respect to information obtained
    under this subsection to the same extent and in the same manner as they
    apply with respect to other energy information obtained under such
    section.''.
        (f) State Waiver.--Section 327(c) of the Energy Policy and
    Conservation Act (42 U.S.C. 6297(c)), as amended by section 161(a)(19)
    of this Act, is further amended by adding at the end the following:
                ``(12) is a regulation concerning standards for hot food
            holding cabinets, drinking water dispensers and portable
            electric spas adopted by the California Energy Commission on or
            before January 1, 2013.''.
        (g) Waiver of Federal Preemption.--Paragraph (1) of section 327(d)
    of the Energy Policy and Conservation Act (42 U.S.C. 6297(d)) is
    amended as follows:
                (1) In subparagraph (A) by striking ``State regulation''
            each place it appears and inserting ``State statute or
            regulation''.
                (2) In subparagraph (B) by adding at the end the following
            new sentence: ``In making such a finding, the Secretary may not
            reject a petition for failure of the petitioning State or river
            basin commission to produce confidential information maintained
            by any manufacturer or distributor, or group or association of
            manufacturers or distributors, and which the petitioning party
            does not have the legal right to obtain.''.
                (3) In clause (ii) of subparagraph (C) by striking
            ``costs'' each place it appears and inserting ``estimated
            costs''.
                (4) In subparagraph (C) by striking ``within the context of
            the State's energy plan and forecast, and,''.
        (h) Inclusion of Carbon Output on Appliance ``Energyguide''
    Labels.--(1) Section 324(a)(2) of the Energy Policy and Conservation
    Act (42 U.S.C. 6294(a)(2)) is amended by adding the following at the
    end:
        ``(I)(i) Not later than 90 days after the date of enactment of this
    subparagraph, the Commission shall initiate a rulemaking to implement
    the additional labeling requirements specified in subsection (c)(1)(C)
    of this section with an effective date for the revised labeling
    requirement not later than 12 months from issuance of the final rule.
        ``(ii) Not later than 24 months after the date of enactment of this
    subparagraph, the Commission shall complete the rulemaking initiated
    under clause (i).
        ``(iii) Not later than 90 days after issuance of the final rule as
    provided in this subparagraph, the Secretary shall issue calculation
    methods required to effectuate the labeling requirements specified in
    subsection (c)(1)(C) of this section.''.
        (2) Section 324(c)(1) of the Energy Policy and Conservation Act (42
    U.S.C. 6294(c)(1)) is amended--
                (A) by striking ``and'' at the end of subparagraph (A);
                (B) by striking the period at the end of subparagraph (B)
            and inserting a semicolon; and
                (C) by adding at the end the following new subparagraphs:
                ``(C) for products or groups of products providing a
            comparable function (including the group of products comprising
            the heating function of heat pumps and furnaces) among covered
            products listed in paragraphs (3), (4), (5), (8), (9), (10),
            and (11) of section 322(a) of this part, and others designated
            by the Secretary, the estimated total annual atmospheric carbon
            dioxide emissions (or their equivalent in other greenhouse
            gases) associated with, or caused by, the product, calculated
            utilizing--
                        ``(i) national average energy use for the product
                    including energy consumed at the point of end use based
                    on test procedures developed under section 323 of this
                    part;
                        ``(ii) national average energy consumed or lost in
                    the production, generation, transportation, storage,
                    and distribution of energy to the point of end use; and
                        ``(iii) any direct emissions of greenhouse gases
                    from the product during normal use;
                        ``(D) in determining the national average energy
                    consumption and total annual atmospheric carbon dioxide
                    emissions, the Secretary shall utilize Federal
                    Government sources, including the Energy Information
                    Administration Annual Energy Review, the Environmental
                    Protection Agency eGRID database, Environmental
                    Protection Agency AP-42 Emission Factors as amended,
                    and other sources determined to be appropriate by the
                    Secretary; and
                        ``(E) information presenting, for each product (or
                    group of products providing the comparable function)
                    identified in section (c)(1)(C) of this section, the
                    estimated annual carbon dioxide emissions calculated
                    within the range of emissions calculated for all models
                    of the product or group according to its function,
                    including those models consuming fuels and those models
                    not consuming fuels.''.
        (i) Permitting States to Seek Injunctive Enforcement.--(1) Section
    334 of the Energy Policy and Conservation Act (42 U.S.C. 6304) is
    amended to read as follows:

    ``SEC. 334. JURISDICTION AND VENUE.

        ``(a) Jurisdiction.--The United States district courts shall have
    jurisdiction to restrain--
                ``(1) any violation of section 332; and
                ``(2) any person from distributing in commerce any covered
            product which does not comply with an applicable rule under
            section 324 or 325.
        ``(b) Authority.--Any action referred to in subsection (a) shall be
    brought by the Commission or by the attorney general of a State in the
    name of the State, except that--
                ``(1) any such action to restrain any violation of section
            332(a)(3) which relates to requirements prescribed by the
            Secretary or any violation of section 332(a)(4) which relates
            to request of the Secretary under section 326(b)(2) shall be
            brought by the Secretary; and
                ``(2) any violation of section 332(a)(5) or 332(a)(7) shall
            be brought by the Secretary or by the attorney general of a
            State in the name of the State.
        ``(c) Venue and Service of Process.--Any such action may be brought
    in the United States district court for a district wherein any act,
    omission, or transaction constituting the violation occurred, or in
    such court of the district wherein the defendant is found or transacts
    business. In any action under this section, process may be served on a
    defendant in any other district in which the defendant resides or may
    be found.''.
        (2) The item relating to section 334 in the table of contents for
    such Act is amended to read as follows:

    ``Sec. 334. Jurisdiction and venue.''.
        (j) Treatment of Appliances Within Building Codes.--(1) Section
    327(f)(3) of the Energy Policy and Conservation Act (42 U.S.C.
    6297(f)(3)) is amended by striking subparagraphs (B) through (G) and
    inserting the following:
                ``(B) The code meets at least one of the following
            requirements:
                        ``(i) The code does not require that the covered
                    product have an energy efficiency exceeding--
                                ``(I) the applicable energy conservation
                            standard established in or prescribed under
                            section 325;
                                ``(II) the level required by a regulation
                            of that State for which the Secretary has
                            issued a rule granting a waiver under
                            subsection (d) of this section; or
                                ``(III) the required level established in
                            the International Energy Conservation Code or
                            in a standard of the American Society of
                            Heating, Refrigerating and Air-Conditioning
                            Engineers, or by the Secretary pursuant to
                            section 304 of the Energy Conservation and
                            Production Act.
                        ``(ii) If the code uses one or more baseline
                    building designs against which all submitted building
                    designs are to be evaluated and such baseline building
                    designs contain a covered product subject to an energy
                    conservation standard established in or prescribed
                    under section 325, the baseline building designs are
                    based on an efficiency level for such covered product
                    which meets but does not exceed one of the levels
                    specified in clause (i).
                        ``(iii) If the code sets forth one or more optional
                    combinations of items which meet the energy consumption
                    or conservation objective, in at least one combination
                    that the State has found to be reasonably achievable
                    using commercially available technologies the
                    efficiency of the covered product meets but does not
                    exceed one of the levels specified in clause (i).
                ``(C) The credit to the energy consumption or conservation
            objective allowed by the code for installing covered products
            having energy efficiencies exceeding one of the levels
            specified in subparagraph (B)(i) is on a one-for-one equivalent
            energy use or equivalent energy cost basis, taking into account
            the typical lifetime of the product.
                ``(D) The energy consumption or conservation objective is
            specified in terms of an estimated total consumption of energy
            (which may be calculated from energy loss- or gain-based codes)
            utilizing an equivalent amount of energy (which may be
            specified in units of energy or its equivalent cost) and
            equivalent lifetimes.
                ``(E) The estimated energy use of any covered product
            permitted or required in the code, or used in calculating the
            objective, is determined using the applicable test procedures
            prescribed under section 323, except that the State may permit
            the estimated energy use calculation to be adjusted to reflect
            the conditions of the areas where the code is being applied if
            such adjustment is based on the use of the applicable test
            procedures prescribed under section 323 or other technically
            accurate documented procedure.''.
                (2) Section 327(f)(4)(B) of the Energy Policy and
            Conservation Act (42 U.S.C. 6297(f)(4)(B)) is amended to read
            as follows:
        ``(B) If a building code requires the installation of covered
    products with efficiencies exceeding the levels and requirements
    specified in paragraph (3)(B), such requirement of the building code
    shall not be applicable unless the Secretary has granted a waiver for
    such requirement under subsection (d) of this section.''.

    SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PROGRAM.

        (a) In General.--Not later than 1 year after the date of enactment
    of this Act, the Secretary of Energy, in consultation with the
    Administrator, shall establish a program to be known as the ``Best-in-
    Class Appliances Deployment Program'' to--
                (1) provide bonus payments to retailers or distributors
            under subsection (c) for sales of best-in-class high-efficiency
            household appliance models, high-efficiency installed building
            equipment, and high-efficiency consumer electronics, with the
            goal of reducing life-cycle costs for consumers, encouraging
            innovation, and maximizing energy savings and public benefit;
                (2) provide bounties under subsection (d) to retailers and
            manufacturers for the replacement, retirement, and recycling of
            old, inefficient, and environmentally harmful products; and
                (3) provide premium awards under subsection (e) to
            manufacturers for developing and producing new Superefficient
            Best-in-Class Products.
        (b) Designation of Best-in-Class Product Models.--
                (1) In general.--The Secretary of Energy shall designate
            product models of appliances, equipment, or electronics as
            Best-in-Class Product models. The Secretary shall publicly
            announce the Best-in-Class Product models designated under this
            subsection. The Secretary shall define product classes broadly
            and, except as provided in paragraph (2), shall designate as
            Best-in-Class Product models no more than the most efficient 10
            percent of the commercially available product models in a class
            that demonstrate, as a group, a distinctly greater energy
            efficiency than the average energy efficiency of that class of
            appliances, equipment, or electronics. In designating models,
            the Secretary shall--
                        (A) identify commercially available models in the
                    relevant class of products;
                        (B) identify the subgroup of those models that
                    share the distinctly higher energy-efficiency
                    characteristics that warrant designation as best-in-
                    class; and
                        (C) add other models in that class to the list of
                    Best-in-Class Product models as they demonstrate their
                    ability to meet the higher-efficiency characteristics
                    on which the designation was made.
                (2) Percentage exception.--If there are fewer than 10
            product models in a class of products, the Secretary may
            designate one or more of such models as Best-in-Class Products.
                (3) Review of best-in-class standards.--The Secretary shall
            review annually the product-specific criteria for designating,
            and the product models that qualify as, Best-in-Class Products
            and, after notice and a 30-day comment period, make upwards
            adjustments in the efficiency criteria as necessary to maintain
            an appropriate ratio of such product models to the total number
            of product models in the product class.
                (4) Smart grid energy efficiency savings.--The Secretary
            shall include energy efficiency savings achieved by a
            commercially available product having smart grid capability in
            determining the efficiency level of a product for purposes of a
            Best-In-Class Product designation pursuant to this subsection.
            In measuring energy efficiency savings achieved by smart grid
            capability, the Secretary shall use a metric that--
                        (A) is based on the time-differentiated value and
                    amount of energy consumption;
                        (B) accounts for the capability of the product to
                    respond to a smart grid in which the physical
                    capability of the product to save or delay energy
                    because of a smart grid feature is weighted by the
                    likelihood that the feature will be used;
                        (C) is based on the value of a unit of electric or
                    gas consumption as a function of time of day and
                    season; and
                        (D) includes a test method by which the
                    manufacturer shall determine the energy efficiency of
                    smart grid capable products.
        (c) Bonuses for Sales of Best-in-Class Products.--
                (1) In general.--The Secretary of Energy shall make bonus
            payments to retailers or, as provided in paragraph (5)(B),
            distributors for the sale of Best-in-Class Products.
                (2) Bonus program.--The Secretary shall--
                        (A) publicly announce the availability and amount
                    of the bonus to be paid for each sale of a Best-in-
                    Class Product of a model designated under subsection
                    (b); and
                        (B) make bonus payments in at least that amount for
                    each Best-in-Class Product of that model sold during
                    the 3-year period beginning on the date the model is
                    designated under subsection (b).
                (3) Upgrade of best-in-class product eligibility.--In
            conducting a review under subsection (b)(3), the Secretary
            shall--
                        (A) consider designating as a Best-in-Class Product
                    model a Superefficient Best-in-Class Product model that
                    has been designated pursuant to subsection (e);
                        (B) announce any change in the bonus payment as
                    necessary to increase the market share of Best-in-Class
                    Product models;
                        (C) list models that will be eligible for bonuses
                    in the new amount; and
                        (D) continue paying bonus payments at the original
                    level, for the sale of any models that previously
                    qualified as Best-in-Class Products but do not qualify
                    at the new level, for the remainder of the 3-year
                    period announced with the original designation.
                (4) Size of individual bonus payments.--(A) The size of
            each bonus payment under this subsection shall be the product
            of--
                        (i) an amount determined by the Secretary; and
                        (ii) the difference in energy consumption between
                    the Best-in-Class Product and the average product in
                    the product class.
                (B) The Secretary shall determine the amount under
            subparagraph (A)(i) for each product type, in consultation with
            State and utility efficiency program administrators as well as
            the Administrator, based on estimates of the amount of bonus
            payment that would provide significant incentive to increase
            the market share of Best-in-Class Products.
                (5) Eligible bonus recipient.--(A) The Secretary shall
            ensure that not more than 1 bonus payment is provided under
            this subsection for each Best-in-Class Product.
                (B) The Secretary may make distributors eligible to receive
            bonus payments under this subsection for sales that are not to
            the final end-user, to the extent that the Secretary determines
            that for a particular product category distributors are well
            situated to increase sales of Best-in-Class Products.
        (d) Bounties for Replacement, Retirement, and Recycling of Existing
    Low-Efficiency Products.--
                (1) In general.--The Secretary of Energy shall make bounty
            payments to--
                        (A) retailers for the replacement, retirement, and
                    recycling of older operating low-efficiency products
                    that might otherwise continue in operation; and
                        (B) manufacturers of Superefficient Best-in-Class
                    Products for the retirement and recycling of older
                    operating low-efficiency products that perform the same
                    function and which might otherwise continue in
                    operation.
                (2) Bounties.--Bounties shall be payable--
                        (A) to a retailer upon documentation that the sale
                    of a Best-in-Class Product was accompanied by the
                    replacement, retirement, and recycling of--
                                (i) an inefficient but still-functioning
                            product; or
                                (ii) a nonfunctioning product containing a
                            refrigerant, by the consumer to whom the Best-
                            in-Class Product was sold; and
                        (B) to a manufacturer upon documentation of the
                    retirement and recycling of--
                                (i) an inefficient but still-functioning
                            product from a consumer to whom a
                            Superefficient Best-in-Class Product was
                            delivered; or
                                (ii) a nonfunctioning product containing a
                            refrigerant from a consumer to whom a
                            Superefficient Best-in-Class Product was
                            delivered.
                (3) Amount.--
                        (A) Functioning products.--The bounty payment
                    payable under this subsection for a product described
                    in paragraphs (2)(A)(i) and (2)(B)(i) shall be based on
                    the difference between the estimated energy use of the
                    product replaced and the energy use of an average new
                    product in the product class, over the estimated
                    remaining lifetime of the product that was replaced.
                        (B) Nonfunctioning products containing
                    refrigerants.--The bounty payment payable under this
                    subsection for a product described in paragraphs
                    (2)(A)(ii) and (2)(B)(ii) shall be in the amount that
                    the Secretary of Energy, in consultation with the
                    Administrator, determines is sufficient to promote the
                    recycling of such products, up to the amount of bounty
                    for a comparable product described in paragraphs (2)(A)
                    and (2)(B).
                (4) Retirement.--The Secretary shall ensure that no product
            for which a bounty is paid under this subsection is returned to
            active service, but that it is instead destroyed, and recycled
            to the extent feasible.
                (5) Recycling appliances containing refrigerants.--
            Exclusively for the purpose of implementing the bounty payment
            program for products containing a refrigerant under this
            section, the Administrator shall establish standards for
            environmentally responsible methods of recycling and disposal
            of refrigerant-containing appliances that, at a minimum, meet
            the requirements set by the Responsible Appliance Disposal
            (RAD) Program for refrigerant disposal. The Secretary shall
            ensure that such standards are met before a bounty payment is
            made under this subsection for a product containing a
            refrigerant. Nothing in this section shall be interpreted to
            alter the requirements of section 608 of the Clean Air Act or
            to relieve any person from complying with those requirements.
        (e) Premium Awards for Development and Production of Superefficient
    Best-in-Class Products.--
                (1) In general.--(A) The Secretary of Energy shall provide
            premium awards to manufacturers for the development and
            production of Superefficient Best-in-Class Products. The
            Secretary shall set and periodically revise standards for
            eligibility of products for designation as a Superefficient
            Best-in-Class Product.
                (B) The Secretary may establish a standard for a
            Superefficient Best-in-Class Product even if no product meeting
            that standard exists, if the Secretary has reasonable grounds
            to conclude that a mass-producible product could be made to
            meet that standard.
                (C) The Secretary may also establish a Superefficient Best-
            in-Class Product standard that is met by one or more existing
            Best-in-Class Product models, if those product models have
            distinct energy efficiency attributes and performance
            characteristics that make them significantly better than other
            product models qualifying as best-in-class. The Secretary may
            not designate as Superefficient Best-in-Class Products under
            this subparagraph models that represent more than 10 percent of
            the currently qualifying Best-in-Class Product models. This
            subparagraph shall not apply to products designated pursuant to
            paragraph (4)(A).
                (D) In making its finding on the efficiency level a product
            can achieve for purposes of a Superefficient Best-In-Class
            Product designation pursuant to this paragraph, the Secretary
            shall include energy efficiency savings that would be achieved
            by a product as a result of smart grid capability when a
            product having such capability can be produced and sold
            commercially to mass market consumers. In measuring energy
            efficiency savings achieved by smart grid capability, the
            Secretary shall use a metric that--
                        (i) is based on the time-differentiated value and
                    amount of energy consumption;
                        (ii) accounts for the capability of the product to
                    respond to a smart grid in which the physical
                    capability of the product to save or delay energy
                    because of a smart grid feature is weighted by the
                    likelihood that the feature will be used;
                        (iii) is based on the value of a unit of electric
                    or gas consumption as a function of time of day and
                    season; and
                        (iv) includes a test method by which the
                    manufacturer shall determine the energy efficiency of
                    smart grid capable products.
                (2) Premium awards.--(A) The premium award payment provided
            to a manufacturer under this subsection shall be in addition to
            any bonus payments made under subsection (c).
                (B) The amount of the premium award paid per unit of
            Superefficient Best-in-Class Products sold to retailers or
            distributors shall, except as provided by subparagraph (F), be
            the product of--
                        (i) an amount determined by the Secretary; and
                        (ii) the difference in energy consumption between
                    the Superefficient Best-in-Class Product and the
                    average product in the product class.
                (C) The Secretary shall determine the amount under
            subparagraph (B)(i) for each product type, in consultation with
            State and utility efficiency program administrators as well as
            the Administrator, based on consideration of the present value
            to the Nation of the energy (and water or other resources or
            inputs) saved over the useful life of the product. The
            Secretary may also take into consideration the methods used to
            increase sales of qualifying products in determining such
            amount.
                (D) The Secretary may adjust the value described in
            subparagraph (C) upward or downward as appropriate, including
            based on the effect of the premium awards on the sales of
            products in different classes that may be affected by the
            program under this subsection.
                (E) Premium award payments shall be applied to sales of any
            Superefficient Best-in-Class Product for the first 3 years
            after designation as a Superefficient Best-in-Class Product.
                (F) For years 2011 through 2013, the Secretary shall make
            bonus payments to manufacturers of the products designated in
            paragraph (4)(A) for each product produced in the following
            amounts:
                        (i) $75 for each dishwasher.
                        (ii) $250 for each clothes washer.
                        (iii) $200 for each refrigerator or refrigerator-
                    freezer.
                        (iv) $250 for each clothes dryer.
                        (v) $200 for each cooking product.
                        (vi) $300 for each water heater.
                (3) Coordination of incentives.--No product for which
            Federal tax credit is received under section 45M of the
            Internal Revenue Code of 1986 shall be eligible to receive
            premium award payments pursuant to this subsection.
                (4) Designations.--
                        (A) Initial designations.--Notwithstanding any
                    other provisions of this section, the products the
                    Secretary shall designate as a Superefficient Best-In-
                    Class Product include, but are not limited to, the
                    following products manufactured in 2011 through 2013:
                                (i) A dishwasher, clothes washer,
                            refrigerator, or refrigerator-freezer that
                            meets the highest efficiency performance
                            standards in its product category as provided
                            in Section 305(b) of the Emergency Economic
                            Stabilization Act of 2008 and has the smart
                            grid capability specified in paragraph (5).
                                (ii) A water heater that meets an
                            efficiency standard that is the same or
                            equivalent to the standard provided in Section
                            1333 of the Energy Policy Act of 2005 and has
                            the smart grid capability specified in
                            paragraph (5).
                                (iii) A clothes dryer or cooking product
                            that the Secretary determines meets the
                            standards specified in subsection (j)(3), which
                            the Secretary shall promulgate no later than 1
                            year after the date of enactment, and has the
                            smart grid capability specified in paragraph
                            (5).
                        (B) Extension of initial designations.--
                                (i) General.--The Secretary shall in 2013
                            extend the Superefficient Best-In-Class Product
                            designation of each product specified in
                            subparagraph (A)(i) through (iii) through 2017,
                            provided that for each product designation
                            extended--
                                        (I) the extension will result in
                                    significant energy efficiency savings;
                                        (II) the product meets the
                                    Superefficient Best-In-Class Product
                                    criteria specified in paragraph (1);
                                        (III) the eligibility standards of
                                    the product include the smart grid
                                    capability specified in paragraph (5);
                                    and
                                        (IV) the Secretary makes
                                    appropriate revisions to the
                                    eligibility standards of the product as
                                    provided by paragraph (1).
                                (ii) Awards.--If a Superefficient Best-In-
                            Class Product designation for a product is
                            extended pursuant to this subparagraph, the
                            premium award for the product shall be
                            determined in accordance with paragraph (2).
                (5) Smart grid capability.--
                        (A) Until the Secretary promulgates criteria under
                    subparagraph (B), the term ``smart grid capability''
                    means capability of receiving and interpreting time-of-
                    use pricing and peak-load-shed signals from a utility
                    and--
                                (i) in the case of a cooking product,
                            reducing a minimum of 20 percent during peak
                            demand as measured by the tested average
                            wattage over the course of a typical operating
                            cycle of the product; or
                                (ii) in the case of a clothes washer, a
                            refrigerator, a dishwasher, a dryer and a water
                            heater, reducing a minimum of 50 percent during
                            peak demand as measured by the tested average
                            wattage over the course of a typical operating
                            cycle of the product, provided that the typical
                            operating cycle of a refrigerator and a water
                            heater shall be a 24-hour period.
                        (B) After completion of the analysis required under
                    section 142(b) of this Act, the Secretary shall
                    expeditiously promulgate, after notice and a 30-day
                    public comment period, criteria for what constitutes
                    ``smart grid capability.''
        (f) Reporting.--The Secretary of Energy shall require, as a
    condition of receiving a bonus, bounty, or premium award under this
    section, that a report containing the following documentation be
    provided:
                (1) For retailers and distributors, the number of units
            sold within each product type, and model-specific wholesale
            purchase prices and retail sale prices, on a monthly basis.
                (2) For manufacturers, model-specific energy efficiency and
            consumption data.
                (3) For manufacturers, on an immediate basis, information
            concerning any product design or function changes that affect
            the energy consumption of the unit.
                (4) The methods used to increase the sales of qualifying
            products.
        (g) Monitoring and Verification Protocols.--The Secretary of Energy
    shall establish monitoring and verification protocols for energy
    consumption tests for each product model and for sales of energy-
    efficient models. The Secretary shall estimate actual savings of energy
    from the use of Smart Grid capability in appliances for which premium
    award payments are made pursuant to subsection (e) as a function of
    utility and consumer readiness to utilize such capability.
        (h) Disclosure.--The Secretary of Energy may require that
    manufacturers, retailers and distributors disclose publicly and to
    consumers their participation in the program under this section.
        (i) Cost-Effectiveness Requirement.--
                (1) Requirement.--The Secretary of Energy shall make cost-
            effectiveness a top priority in designing the program under,
            and administering, this section, except that the cost-
            effectiveness of providing premium awards to manufacturers
            under subsection (e), in aggregate, may be lower by this
            measure than that of the bonuses and bounties to retailers and
            distributors under subsections (c) and (d).
                (2) Definitions.--In this subsection:
                        (A) Cost-effectiveness.--The term ``cost-
                    effectiveness'' means a measure of aggregate savings in
                    the cost of energy over the lifetime of a product in
                    relation to the cost to the Secretary of the bonuses,
                    bounties, and premium awards provided under this
                    section for a product.
                        (B) Savings.--The term ``savings'' means the
                    cumulative megawatt-hours of electricity or million
                    British thermal units of other fuels saved by a product
                    during the projected useful life of the product, in
                    comparison to projected energy consumption of the
                    average product in the same class, taking into
                    consideration the impact of any documented measures to
                    replace, retire, and recycle low-efficiency products at
                    the time of purchase of highly-efficient substitutes.
        (j) Definitions.--In this section--
                (1) the term ``distributor'' mean an individual,
            organization, or company that sells products in multiple lots
            and not directly to end-users;
                (2) the term ``retailer'' means an individual,
            organization, or company that sells products directly to end-
            users;
                (3) the term ``manufacturer'' means an individual,
            organization, or company that transforms raw materials into
            mass-producible finished goods; and
                (4) the term ``Superefficient Best-in-Class Product'' means
            a product that--
                        (A) can be mass produced; and
                        (B) achieves the highest level of efficiency that
                    the Secretary of Energy finds can, given the current
                    state of technology, be produced and sold commercially
                    to mass-market consumers.
        (k) Authorization of Appropriations.--There are authorized to be
    appropriated $600,000,000 for each of the fiscal years 2011 through
    2013 to the Secretary of Energy for purposes of this section, and such
    sums as may be necessary for subsequent fiscal years. Of funds
    appropriated, not more than 10 percent for any fiscal year may be
    expended on program administration, and not less than 40 percent of any
    funds appropriated during fiscal years 2011 through 2013 shall be for
    purposes of subsection (e).

    SEC. 215. WATERSENSE.

        (a) In General.--There is established within the Environmental
    Protection Agency a WaterSense program to identify and promote water
    efficient products, buildings and landscapes, and services in order--
                (1) to reduce water use;
                (2) to reduce the strain on water, wastewater, and
            stormwater infrastructure;
                (3) to conserve energy used to pump, heat, transport, and
            treat water; and
                (4) to preserve water resources for future generations,
    through voluntary labeling of, or other forms of communications about,
    products, buildings and landscapes, and services that meet the highest
    water efficiency and performance standards.
        (b) Duties.--The Administrator shall--
                (1) promote WaterSense labeled products, buildings and
            landscapes, and services in the market place as the preferred
            technologies and services for--
                        (A) reducing water use; and
                        (B) ensuring product and service performance;
                (2) work to enhance public awareness of the WaterSense
            label through public outreach, education, and other means;
                (3) establish and maintain performance standards so that
            products, buildings and landscapes, and services labeled with
            the WaterSense label perform as well or better than their less
            efficient counterparts;
                (4) publicize the need for proper installation and
            maintenance of WaterSense products by a licensed, and where
            certification guidelines exist, WaterSense-certified
            professional to ensure optimal performance;
                (5) preserve the integrity of the WaterSense label;
                (6) regularly review and, when appropriate, update
            WaterSense criteria for categories of products, buildings and
            landscapes, and services, at least once every 4 years;
                (7) to the extent practical, regularly estimate and make
            available to the public the production and relative market
            shares of WaterSense labeled products, buildings and
            landscapes, and services, at least annually;
                (8) to the extent practical, regularly estimate and make
            available to the public the water and energy savings
            attributable to the use of WaterSense labeled products,
            buildings and landscapes, and services, at least annually;
                (9) solicit comments from interested parties and the public
            prior to establishing or revising a WaterSense category,
            specification, installation criterion, or other criterion (or
            prior to effective dates for any such category, specification,
            installation criterion, or other criterion);
                (10) provide reasonable notice to interested parties and
            the public of any changes (including effective dates), on the
            adoption of a new or revised category, specification,
            installation criterion, or other criterion, along with--
                        (A) an explanation of changes; and
                        (B) as appropriate, responses to comments submitted
                    by interested parties;
                (11) provide appropriate lead time (as determined by the
            Administrator) prior to the applicable effective date for a new
            or significant revision to a category, specification,
            installation criterion, or other criterion, taking into account
            the timing requirements of the manufacturing, marketing,
            training, and distribution process for the specific product,
            building and landscape, or service category addressed; and
                (12) identify and, where appropriate, implement other
            voluntary approaches in commercial, institutional, residential,
            municipal, and industrial sectors to encourage reuse and
            recycling technologies, improve water efficiency, or lower
            water use while meeting, where applicable, the performance
            standards established under paragraph (3).
        (c) Authorization of Appropriations.--There are authorized to be
    appropriated $7,500,000 for fiscal year 2010, $10,000,000 for fiscal
    year 2011, $20,000,000 for fiscal year 2012, and $50,000,000 for fiscal
    year 2013 and each year thereafter, adjusted for inflation, to carry
    out this section.

    SEC. 216. FEDERAL PROCUREMENT OF WATER EFFICIENT PRODUCTS.

        (a) Definitions.--In this section:
                (1) Agency.--The term ``agency'' has the meaning given that
            term in section 7902(a) of title 5, United States Code.
                (2) Watersense product or service.--The term ``WaterSense
            product or service'' means a product or service that is rated
            for water efficiency under the WaterSense program.
                (3) Watersense program.--The term ``WaterSense program''
            means the program established by section 215 of this Act.
                (4) FEMP designated product.--The term ``FEMP designated
            product'' means a product that is designated under the Federal
            Energy Management Program of the Department of Energy as being
            among the highest 25 percent of equivalent products for
            efficiency.
                (5) Product and service.--The terms ``product'' and
            ``service'' do not include any water consuming product or
            service designed or procured for combat or combat-related
            missions. The terms also exclude products or services already
            covered by the Federal procurement regulations established
            under section 553 of the National Energy Conservation Policy
            Act (42 U.S.C. 8259b).
        (b) Procurement of Water Efficient Products.--
                (1) Requirement.--To meet the requirements of an agency for
            a water consuming product or service, the head of the agency
            shall, except as provided in paragraph (2), procure--
                        (A) a WaterSense product or service; or
                        (B) a FEMP designated product.
            A WaterSense plumbing product should preferably, when possible,
            be installed by a licensed and, when WaterSense certification
            guidelines exist, WaterSense-certified plumber or mechanical
            contractor, and a WaterSense irrigation system should
            preferably, when possible, be installed, maintained, and
            audited by a WaterSense-certified irrigation professional to
            ensure optimal performance.
                (2) Exceptions.--The head of an agency is not required to
            procure a WaterSense product or service or FEMP designated
            product under paragraph (1) if the head of the agency finds in
            writing that--
                        (A) a WaterSense product or service or FEMP
                    designated product is not cost-effective over the life
                    of the product, taking energy and water cost savings
                    into account; or
                        (B) no WaterSense product or service or FEMP
                    designated product is reasonably available that meets
                    the functional requirements of the agency.
                (3) Procurement planning.--The head of an agency shall
            incorporate into the specifications for all procurements
            involving water consuming products and systems, including guide
            specifications, project specifications, and construction,
            renovation, and services contracts that include provision of
            water consuming products and systems, and into the factors for
            the evaluation of offers received for the procurement, criteria
            used for rating WaterSense products and services and FEMP
            designated products. The head of an agency shall consider, to
            the maximum extent practicable, additional measures for
            reducing agency water consumption, including water reuse
            technologies, leak detection and repair, and use of waterless
            products that perform similar functions to existing water-
            consuming products.
        (c) Regulations.--Not later than 180 days after the date of
    enactment of this Act, the Secretary of Energy, working in coordination
    with the Administrator, shall issue guidelines to carry out this
    section.

    SEC. 217. EARLY ADOPTER WATER EFFICIENT PRODUCT INCENTIVE PROGRAMS.

        (a) Definitions.--In this section:
                (1) Eligible entity.--The term ``eligible entity'' means a
            State government, local or county government, tribal
            government, wastewater or sewerage utility, municipal water
            authority, energy utility, water utility, or nonprofit
            organization that meets the requirements of subsection (b).
                (2) Incentive program.--The term ``incentive program''
            means a program for administering financial incentives for
            consumer purchase and installation of residential water
            efficient products and services as described in subsection
            (b)(1).
                (3) Residential water efficient product or service.--The
            term ``residential water efficient product or service'' means a
            product or service for a single-family or multifamily residence
            or its landscape that is rated for water efficiency and
            performance--
                        (A) by the WaterSense program; or
                        (B) where a WaterSense specification does not
                    exist, by an incentive program.
            Categories of water efficient products and services may include
            faucets, irrigation technologies and services, point-of-use
            water treatment devices, reuse and recycling technologies,
            toilets, and showerheads.
                (4) Watersense program.--The term ``WaterSense program''
            means the program established by section 215 of this Act.
        (b) Eligible Entities.--An entity shall be eligible to receive an
    allocation under subsection (c) if the entity--
                (1) establishes (or has established) an incentive program
            to provide rebates, vouchers, other financial incentives, or
            direct installs to consumers for the purchase of residential
            water efficient products or services;
                (2) submits an application for the allocation at such time,
            in such form, and containing such information as the
            Administrator may require; and
                (3) provides assurances satisfactory to the Administrator
            that the entity will use the allocation to supplement, but not
            supplant, funds made available to carry out the incentive
            program.
        (c) Amount of Allocations.--For each fiscal year, the Administrator
    shall determine the amount to allocate to each eligible entity to carry
    out subsection (d) taking into consideration--
                (1) the population served by the eligible entity in the
            most recent calendar year for which data are available;
                (2) the targeted population of the eligible entity's
            incentive program, such as general households, low-income
            households, or first-time homeowners, and the probable
            effectiveness of the incentive program for that population;
                (3) for existing programs, the effectiveness of the
            incentive program in encouraging the adoption of water
            efficient products and services; and
                (4) any prior year's allocation to the eligible entity that
            remains unused.
        (d) Use of Allocated Funds.--Funds allocated to an entity under
    subsection (c) may be used to pay up to 50 percent of the cost of
    establishing and carrying out an incentive program.
        (e) Fixture Recycling.--Entities are encouraged to promote or
    implement fixture recycling programs to manage the disposal of older
    fixtures replaced due to the incentive program under this section.
        (f) Issuance of Incentives.--Financial incentives may be provided
    to consumers that meet the requirements of the incentive program. The
    entity may issue all financial incentives directly to consumers or,
    with approval of the Administrator, delegate some or all financial
    incentives administration to other organizations including, but not
    limited to, local governments, municipal water authorities, and water
    utilities. The amount of a financial incentives shall be determined by
    the entity, taking into consideration--
                (1) the amount of the allocation to the entity under
            subsection (c);
                (2) the amount of any Federal, State, or other
            organization's tax or financial incentive available for the
            purchase of the residential water efficient product or service;
                (3) the amount necessary to change consumer behavior to
            purchase water efficient products and services; and
                (4) the consumer expenditures for onsite preparation,
            assembly, and original installation of the product.
        (g) Authorization of Appropriations.--There are authorized to be
    appropriated to the Administrator to carry out this section $50,000,000
    for fiscal year 2010, $100,000,000 for fiscal year 2011, $150,000,000
    for fiscal year 2012, $100,000,000 for fiscal year 2013, and
    $50,000,000 for fiscal year 2014.

    SEC. 218. CERTIFIED STOVES PROGRAM.

        (a) Definitions.--In this section:
                (1) Agency.--The term ``Agency'' means the Environmental
            Protection Agency.
                (2) Wood stove or pellet stove.--The term ``wood stove or
            pellet stove'' means a wood stove, pellet stove, or fireplace
            insert that uses wood or pellets for fuel.
                (3) Certified stove.--The term ``certified stove'' means a
            wood stove or pellet stove that meets the standards of
            performance for new residential wood heaters under subpart AAA
            of part 60 of subchapter C of chapter I of title 40, Code of
            Federal Regulations (or successor regulations), as certified by
            the Administrator. Pellet stoves and fireplace inserts using
            pellets for fuel that are exempt from testing by the
            Administrator but meet the same standards of performance as
            wood stoves are considered certified for the purposes of this
            section.
                (4) Eligible entity.--The term ``eligible entity'' means--
                        (A) a State, a local government, or a federally
                    recognized Indian tribe;
                        (B) Alaskan Native villages or regional or village
                    corporations (as defined in, or established under, the
                    Alaskan Native Claims Settlement Act (43 U.S.C. 1601 et
                    seq.)); and
                        (C) a nonprofit organization or institution that--
                                (i) represents or provides pollution
                            reduction or educational services relating to
                            wood smoke minimization to persons,
                            organizations, or communities; or
                                (ii) has, as its principal purpose, the
                            promotion of air quality or energy efficiency.
        (b) Establishment.--The Administrator shall establish and carry out
    a program to assist in the replacement of wood stoves or pellet stoves
    that do not meet the standards of performance referred to in subsection
    (a)(4) by--
                (1) requiring that each wood stove or pellet stove sold in
            the United States on and after the date of enactment of this
            Act meet the standards of performance referred to in subsection
            (a)(4);
                (2) requiring that no wood stove or pellet stove replaced
            under this program is sold or returned to active service, but
            that it is instead destroyed and recycled to the maximum extent
            feasible;
                (3) providing funds to an eligible entity to replace a wood
            stove or pellet stove that does not meet the standards of
            performance in subsection (a)(4) with a certified stove,
            including funds to pay for--
                        (A) installation of a replacement certified stove;
                    and
                        (B) necessary replacement of or repairs to
                    ventilation, flues, chimneys, or other relevant items
                    necessary for safe installation of a replacement
                    certified stove;
                (4) in addition to any funds that may be appropriated for
            the program under this subsection, using existing Federal,
            State, and local programs and incentives, to the greatest
            extent practicable;
                (5) prioritizing the replacement of wood stoves or pellet
            stoves manufactured before July 1, 1990; and
                (6) carrying out such other activities as the Administrator
            determines appropriate to facilitate the replacement of wood
            stoves or pellet stoves that do not meet the standards of
            performance referred to in subsection (a)(3).
        (c) Regulations.--The Administrator may promulgate such regulations
    as are necessary to carry out the program established under subsection
    (b).
        (d) Funding.--
                (1) Authorization of appropriations.--There are authorized
            to be appropriated to carry out the program under this section
            $20,000,000 for the period of fiscal years 2010 through 2014.
                (2) Designated use.--Of amounts appropriated pursuant to
            this subsection--
                        (A) 25 percent shall be designated for use to carry
                    out the program under this section on lands held in
                    trust for the benefit of a federally recognized Indian
                    tribe;
                        (B) 3 percent shall be designated for use to carry
                    out the program under this section in Alaskan Native
                    villages or regional or village corporations (as
                    defined in, or established under, the Alaskan Native
                    Claims Settlement Act (43 U.S.C. 1601 et seq.)); and
                        (C) 72 percent shall be designated for use to carry
                    out the program under this section nationwide.
                (3) Regulatory programs.--
                        (A) In general.--No grant or loan provided under
                    this section shall be used to fund the costs of
                    emissions reductions that are mandated under Federal,
                    State, or local law.
                        (B) Mandated.--For purposes of subparagraph (A),
                    voluntary or elective emission reduction measures shall
                    not be considered ``mandated'', regardless of whether
                    the reductions are included in the implementation plan
                    of a State.
        (e) EPA Authority to Accept Wood Stove or Pellet Stove Replacement
    Supplemental Environmental Projects.--
                (1) In general.--The Administrator may accept
            (notwithstanding sections 3302 and 1301 of title 31, United
            States Code) wood stove or pellet stove replacement
            Supplemental Environmental Projects if such projects, as part
            of a settlement of any alleged violation of environmental law--
                        (A) protect human health or the environment;
                        (B) are related to the underlying alleged
                    violation;
                        (C) do not constitute activities that the defendant
                    would otherwise be legally required to perform; and
                        (D) do not provide funds for the staff of the
                    Agency or for contractors to carry out the Agency's
                    internal operations.
                (2) Certification.--In any settlement agreement regarding
            an alleged violation of environmental law in which a defendant
            agrees to perform a wood stove or pellet stove replacement
            Supplemental Environmental Project, the Administrator shall
            require the defendant to include in the settlement documents a
            certification under penalty of law that the defendant would
            have agreed to perform a comparably valued, alternative project
            other than a wood stove or pellet stove replacement
            Supplemental Environmental Project if the Administrator were
            precluded by law from accepting a wood stove or pellet stove
            replacement Supplemental Environmental Project. A failure by
            the Administrator to include this language in such a settlement
            agreement shall not create a cause of action against the United
            States under the Clean Air Act or any other law or create a
            basis for overturning a settlement agreement entered into by
            the United States.

    SEC. 219. ENERGY STAR STANDARDS.

        (a) Energy Star.--Section 324A(c) of the Energy Policy and
    Conservation Act is amended--
                (1) in paragraph (6)(B), by striking ``and'' after the
            semicolon at the end;
                (2) in paragraph (7), by striking the period at the end and
            inserting a semicolon; and
                (3) by adding at the end the following:
                ``(8) not later than 18 months after the date of enactment
            of this paragraph, establish and implement a rating system for
            products identified as Energy Star products pursuant to this
            section to provide consumers with the most helpful information
            on the relative energy efficiency, including cost effectiveness
            from the consumer's perspective, and relative length of time
            for consumers to recover costs attributable to the energy
            efficient features, of those products, unless the Administrator
            and the Secretary communicate to Congress that establishing
            such a system would diminish the value of the Energy Star brand
            to consumers;
                ``(9)(A) review the Energy Star product criteria for the 10
            product models in each product category with the greatest
            energy consumption at least once every 3 years; and
                ``(B) based on the review, update and publish the Energy
            Star product criteria for each such category, as necessary; and
                ``(10) require periodic verification of compliance with the
            Energy Star product criteria by products identified as Energy
            Star products pursuant to this section, including--
                        ``(A) purchase and testing of products from the
                    market; or
                        ``(B) other appropriate testing and compliance
                    approaches.''.
        (b) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out the amendments made by this section
    $5,000,000 for fiscal year 2010 and for each fiscal year thereafter.

                     Subtitle C--Transportation Efficiency

    SEC. 221. EMISSIONS STANDARDS.

        Title VIII of the Clean Air Act, as added by section 331 of this
    Act, is amended by inserting after part A the following new part:

                            ``PART B--MOBILE SOURCES

    ``SEC. 821. GREENHOUSE GAS EMISSION STANDARDS FOR MOBILE SOURCES.

        ``(a) New Motor Vehicles and New Motor Vehicle Engines.--(1)
    Pursuant to section 202(a)(1), by December 31, 2010, the Administrator
    shall promulgate standards applicable to emissions of greenhouse gases
    from new heavy-duty motor vehicles or new heavy-duty motor vehicle
    engines, excluding such motor vehicles covered by the Tier II standards
    (as established by the Administrator as of the date of the enactment of
    this section). The Administrator may revise these standards from time
    to time.
        ``(2) Regulations issued under section 202(a)(1) applicable to
    emissions of greenhouse gases from new heavy-duty motor vehicles or new
    heavy-duty motor vehicle engines, excluding such motor vehicles covered
    by the Tier II standards (as established by the Administrator as of the
    date of the enactment of this section), shall contain standards that
    reflect the greatest degree of emissions reduction achievable through
    the application of technology which the Administrator determines will
    be available for the model year to which such standards apply, giving
    appropriate consideration to cost, energy, and safety factors
    associated with the application of such technology. Any such
    regulations shall take effect after such period as the Administrator
    finds necessary to permit the development and application of the
    requisite technology, and, at a minimum, shall apply for a period no
    less than 3 model years beginning no earlier than the model year
    commencing 4 years after such regulations are promulgated.
        ``(3) Regulations issued under section 202(a)(1) applicable to
    emissions of greenhouse gases from new heavy-duty motor vehicles or new
    heavy-duty motor vehicle engines, excluding such motor vehicles covered
    by the Tier II standards (as established by the Administrator as of the
    date of the enactment of this section), shall supersede and satisfy any
    and all of the rulemaking and compliance requirements of section
    32902(k) of title 49, United States Code.
        ``(4) Other than as specifically set forth in paragraph (3) of this
    subsection, nothing in this section shall affect or otherwise increase
    or diminish the authority of the Secretary of Transportation to adopt
    regulations to improve the overall fuel efficiency of the commercial
    goods movement system.
        ``(b) Nonroad Vehicles and Engines.--(1) Pursuant to section
    213(a)(4) and (5), the Administrator shall identify those classes or
    categories of new nonroad vehicles or engines, or combinations of such
    classes or categories, that, in the judgment of the Administrator, both
    contribute significantly to the total emissions of greenhouse gases
    from nonroad engines and vehicles, and provide the greatest potential
    for significant and cost-effective reductions in emissions of
    greenhouse gases. The Administrator shall promulgate standards
    applicable to emissions of greenhouse gases from these new nonroad
    engines or vehicles by December 31, 2012. The Administrator shall also
    promulgate standards applicable to emissions of greenhouse gases for
    such other classes and categories of new nonroad vehicles and engines
    as the Administrator determines appropriate and in the timeframe the
    Administrator determines appropriate. The Administrator shall base such
    determination, among other factors, on the relative contribution of
    greenhouse gas emissions, and the costs for achieving reductions, from
    such classes or categories of new nonroad engines and vehicles. The
    Administrator may revise these standards from time to time.
        ``(2) Standards under section 213(a)(4) and (5) applicable to
    emissions of greenhouse gases from those classes or categories of new
    nonroad engines or vehicles identified in the first sentence of
    paragraph (1) of this subsection, shall achieve the greatest degree of
    emissions reduction achievable based on the application of technology
    which the Administrator determines will be available at the time such
    standards take effect, taking into consideration cost, energy, and
    safety factors associated with the application of such technology. Any
    such regulations shall take effect at the earliest possible date after
    such period as the Administrator finds necessary to permit the
    development and application of the requisite technology, giving
    appropriate consideration to the cost of compliance within such period,
    the applicable compliance dates for other standards, and other
    appropriate factors, including the period of time appropriate for the
    transfer of applicable technology from other applications, including
    motor vehicles, and the period of time in which previously promulgated
    regulations have been in effect.
        ``(3) For purposes of this section and standards under section
    213(a)(4) or (5) applicable to emissions of greenhouse gases, the term
    `nonroad engines and vehicles' shall include non-internal combustion
    engines and the vehicles these engines power (such as electric engines
    and electric vehicles), for those non-internal combustion engines and
    vehicles which would be in the same category and have the same uses as
    nonroad engines and vehicles that are powered by internal combustion
    engines.
        ``(c) Averaging, Banking, and Trading of Emissions Credits.--In
    establishing standards applicable to emissions of greenhouse gases
    pursuant to this section and sections 202(a), 213(a)(4) and (5), and
    231(a), the Administrator may establish provisions for averaging,
    banking, and trading of greenhouse gas emissions credits within or
    across classes or categories of motor vehicles and motor vehicle
    engines, nonroad vehicles and engines (including marine vessels), and
    aircraft and aircraft engines, to the extent the Administrator
    determines appropriate and considering the factors appropriate in
    setting standards under those sections. Such provisions may include
    reasonable and appropriate provisions concerning generation, banking,
    trading, duration, and use of credits.
        ``(d) Reports.--The Administrator shall, from time to time, submit
    a report to Congress that projects the amount of greenhouse gas
    emissions from the transportation sector, including transportation
    fuels, for the years 2030 and 2050, based on the standards adopted
    under this section.
        ``(e) Greenhouse Gases.--Notwithstanding the provisions of section
    711, hydrofluorocarbons shall be considered a greenhouse gas for
    purposes of this section.''.

    SEC. 222. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION
                  EFFICIENCY.

        (a) Environmental Protection Agency.--Title VIII of the Clean Air
    Act, as added by section 331 of this Act, is further amended by
    inserting after part C the following new part:

                       ``PART D--TRANSPORTATION EMISSIONS

    ``SEC. 841. GREENHOUSE GAS EMISSIONS REDUCTIONS THROUGH TRANSPORTATION
                  EFFICIENCY.

        ``(a) In General.--The Administrator, in consultation with the
    Secretary of Transportation, shall promulgate, and update from time to
    time, regulations to establish national transportation-related
    greenhouse gas emissions reduction goals, standardized models and
    methodologies for use in developing surface transportation-related
    greenhouse gas emissions reduction targets pursuant to sections 134 and
    135 of title 23 of the United States Code and methods for collection of
    data on transportation-related greenhouse gas emissions. Such goals
    shall be commensurate with the emissions reductions goals established
    under the American Clean Energy and Security Act of 2009. In
    establishing such goals, models, and methodologies, the Administrator
    shall consult with States and metropolitan planning organizations and
    may utilize existing models and methodologies.
        ``(b) Timing.--The Administrator shall--
                ``(1) publish proposed regulations under subsection (a) not
            later than 12 months after the date of enactment of this
            section; and
                ``(2) promulgate final regulations under subsection (a) not
            later than 18 months after the date of enactment of this
            section.
        ``(c) Assessment.--At least every 6 years after promulgating final
    regulations under subsection (a), the Administrator, jointly with the
    Secretary of Transportation, shall assess current and projected
    progress in reducing national transportation-related greenhouse gas
    emissions. The assessment shall examine the contributions to emissions
    reductions attributable to improvements in vehicle efficiency,
    greenhouse gas performance of transportation fuels, increased
    efficiency in utilizing transportation systems and the effects of local
    and State planning.''.
        (b) Metropolitan Planning Organizations.--Section 134 of title 23
    of the United States Code is amended as follows:
                (1) In subsection (a)(1)--
                        (A) by striking ``minimizing'' and inserting
                    ``reducing''; and
                        (B) by inserting ``, reliance on oil, impacts on
                    the environment, transportation-related greenhouse gas
                    emissions'' after ``consumption''.
                (2) In subsection (h)(1)(E)--
                        (A) by inserting ``sustainability and livability,
                    reduce surface transportation-related greenhouse gas
                    emissions and reliance on oil, adapt to the effects of
                    climate change,'' after ``energy conservation'';
                        (B) by inserting ``and public health'' after
                    ``quality of life''; and
                        (C) by inserting ``, including housing and land use
                    patterns'' after ``development patterns''.
                (3) In subsection (i)(4)(A) by inserting ``air quality,
            public health, housing, transportation,'' after
            ``conservation,''.
                (4) In subsection (k) by inserting at the end the following
            new paragraph:
                ``(6) Emissions reduction process.--
                        ``(A) In general.--Within a metropolitan planning
                    area serving a transportation management area, the
                    transportation planning process under this section
                    shall address transportation-related greenhouse gas
                    emissions by including emission reduction targets and
                    strategies.
                        ``(B) Establishment of emissions reduction targets
                    and strategies.--
                                ``(i) In general.--Not later than 1 year
                            after the promulgation of the final regulations
                            required under section 841 of the Clean Air
                            Act, each metropolitan planning organization
                            shall develop surface transportation-related
                            greenhouse gas emission reduction targets, as
                            well as strategies to meet such targets, as
                            part of the transportation planning process
                            under this section. If more than one
                            metropolitan planning organization has been
                            designated within a metropolitan planning area
                            serving a transportation management area, each
                            such metropolitan planning organization shall
                            work cooperatively with other such organization
                            to develop the surface transportation-related
                            greenhouse gas emission reduction targets
                            required under this subparagraph.
                                ``(ii) Minimum requirements.--Each
                            metropolitan planning organization that
                            develops targets and strategies required under
                            clause (i) shall demonstrate progress in
                            stabilizing and reducing transportation-related
                            greenhouse gas emissions in each metropolitan
                            planning area serving a surface transportation
                            management area. The targets and strategies
                            shall, at a minimum--
                                        ``(I) be based on the models and
                                    methodologies established in the final
                                    regulations required under section 841
                                    of the Clean Air Act;
                                        ``(II) address sources of surface
                                    transportation-related greenhouse gas
                                    emissions and contribute to achievement
                                    of the national transportation-related
                                    greenhouse gas emissions reduction
                                    goals;
                                        ``(III) include efforts to increase
                                    public transportation ridership; and
                                        ``(IV) include efforts to increase
                                    walking, bicycling, and other forms of
                                    nonmotorized transportation.
                        ``(C) Public notice.--Each metropolitan planning
                    organization shall make its emission reduction targets
                    and strategies, and an analysis of the anticipated
                    effects thereof, available to the public through its
                    Web site.
                        ``(D) Enforcement.--If the Secretary finds that a
                    metropolitan planning organization has failed to
                    develop, submit or publish its emission reduction
                    targets and strategies, the Secretary shall not certify
                    that the requirements of this section are met with
                    respect to the metropolitan planning process of such
                    organization.''.
        (c) States.--Section 135 of title 23 of the United States Code is
    amended as follows:
                (1) In subsection (d)(1)(E)--
                        (A) by inserting ``sustainability and livability,
                    reduce surface transportation-related greenhouse gas
                    emissions and reliance on oil, adapt to the effects of
                    climate change,'' after ``energy conservation'';
                        (B) by inserting ``and public health'' after
                    ``quality of life''; and
                        (C) by inserting ``, including housing and land use
                    patterns'' after ``development patterns''.
                (2) In subsection (f)(2)(D)(i) by inserting ``air quality,
            public health, housing, transportation,'' after
            ``conservation,''.
                (3) In subsection (f) by inserting at the end the following
            new paragraph:
                ``(9) Emissions reduction process.--
                        ``(A) In general.--Within a State, the
                    transportation planning process under this section
                    shall address transportation-related greenhouse gas
                    emissions by including emission reduction targets and
                    strategies.
                        ``(B) Establishment of emissions reduction targets
                    and strategies.--
                                ``(i) In general.--Not later than 1 year
                            after the promulgation of the final regulations
                            required under section 841 of the Clean Air
                            Act, each State shall develop surface
                            transportation-related greenhouse gas emission
                            reduction targets, as well as strategies to
                            meet such targets, as part of the
                            transportation planning process under this
                            section.
                                ``(ii) Minimum requirements.--Each State
                            that develops targets and strategies required
                            under clause (i) shall demonstrate progress in
                            stabilizing and reducing transportation-related
                            greenhouse gas emissions in such State. The
                            targets and strategies shall, at a minimum--
                                        ``(I) be based on the models and
                                    methodologies established in the final
                                    regulations required under section 841
                                    of the Clean Air Act;
                                        ``(II) address sources of surface
                                    transportation-related greenhouse gas
                                    emissions and contribute to achievement
                                    of the national transportation-related
                                    greenhouse gas emissions reduction
                                    goals;
                                        ``(III) include efforts to increase
                                    public transportation ridership; and
                                        ``(IV) include efforts to increase
                                    walking, bicycling, and other forms of
                                    nonmotorized transportation.
                        ``(D) Public notice.--Each State shall make its
                    emission reduction targets and strategies, and an
                    analysis of the anticipated effects thereof, available
                    to the public through its Web site.
                        ``(E) Enforcement.--If the Secretary finds that a
                    State has failed to develop, submit or publish its
                    emission reduction targets and strategies, the
                    Secretary shall not certify that the requirements of
                    this section are met with respect to the statewide
                    planning process of such State.''.
        (d) Department of Transportation.--The Secretary of Transportation
    shall establish appropriate requirements, including performance
    measures, to ensure that transportation plans developed under sections
    134 and 135 of title 23 of the United States Code sufficiently meet the
    requirements of this section, including achieving progress towards
    national transportation-related greenhouse gas emissions reduction
    goals.

    SEC. 223. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

        Part B of title VIII of the Clean Air Act, as added by section 221
    of this Act is amended by adding after section 821 the following
    section:

    ``SEC. 822. SMARTWAY TRANSPORTATION EFFICIENCY PROGRAM.

        ``(a) In General.--There is established within the Environmental
    Protection Agency a SmartWay Transport Program to quantify,
    demonstrate, and promote the benefits of technologies, products, fuels,
    and operational strategies that reduce petroleum consumption, air
    pollution, and greenhouse gas emissions from the mobile source sector.
        ``(b) General Duties.--Under the program established under this
    section, the Administrator shall carry out each of the following:
                ``(1) Development of measurement protocols to evaluate the
            energy consumption and greenhouse gas impacts from technologies
            and strategies in the mobile source sector, including those for
            passenger transport and goods movement.
                ``(2) Development of qualifying thresholds for certifying,
            verifying, or designating energy-efficient, low-greenhouse gas
            SmartWay technologies and strategies for each mode of passenger
            transportation and goods movement.
                ``(3) Development of partnership and recognition programs
            to promote best practices and drive demand for energy-
            efficient, low-greenhouse gas transportation performance.
                ``(4) Promotion of the availability of, and encouragement
            of the adoption of, SmartWay certified or verified technologies
            and strategies, and publication of the availability of
            financial incentives, such as assistance from loan programs and
            other Federal and State incentives.
        ``(c) Smartway Transport Freight Partnership.--The Administrator
    shall establish a SmartWay Transport Freight Partnership program with
    shippers and carriers of goods to promote energy-efficient, low-
    greenhouse gas transportation. In carrying out such partnership, the
    Administrator shall undertake each of the following:
                ``(1) Certification of the energy and greenhouse gas
            performance of participating freight carriers, including those
            operating rail, trucking, marine, and other goods movement
            operations.
                ``(2) Publication of a comprehensive energy and greenhouse
            gas performance index of freight modes (including rail,
            trucking, marine, and other modes of transporting goods) and
            individual freight companies so that shippers can choose to
            deliver their goods more efficiently.
                ``(3) Development of tools for--
                        ``(A) carriers to calculate their energy and
                    greenhouse gas performance; and
                        ``(B) shippers to calculate the energy and
                    greenhouse gas impacts of moving their products and to
                    evaluate the relative impacts from transporting their
                    goods by different modes and corporate carriers.
                ``(4) Provision of recognition opportunities for
            participating shipper and carrier companies demonstrating
            advanced practices and achieving superior levels of greenhouse
            gas performance.
        ``(d) Improving Freight Greenhouse Gas Performance Databases.--The
    Administrator shall, in coordination with other appropriate agencies,
    define and collect data on the physical and operational characteristics
    of the Nation's truck population, with special emphasis on data related
    to energy efficiency and greenhouse gas performance to inform the
    performance index published under subsection (c)(2) of this section,
    and other means of goods transport as necessary, at least every 5
    years.
        ``(e) Establishment of Financing Program.--The Administrator shall
    establish a SmartWay Financing Program to competitively award funding
    to eligible entities identified by the Administrator in accordance with
    the program requirements in subsection (g).
        ``(f) Purpose.--Under the SmartWay Financing Program, eligible
    entities shall--
                ``(1) use funds awarded by the Administrator to provide
            flexible loan and lease terms that increase approval rates or
            lower the costs of loans and leases in accordance with guidance
            developed by the Administrator; and
                ``(2) make such loans and leases available to public and
            private entities for the purpose of adopting low-greenhouse gas
            technologies or strategies for the mobile source sector that
            are designated by the Administrator.
        ``(g) Program Requirements.--The Administrator shall determine
    program design elements and requirements, including--
                ``(1) the type of financial mechanism with which to award
            funding, in the form of grants or contracts;
                ``(2) the designation of eligible entities to receive
            funding, including State, tribal, and local governments,
            regional organizations comprised of governmental units,
            nonprofit organizations, or for-profit companies;
                ``(3) criteria for evaluating applications from eligible
            entities, including anticipated--
                        ``(A) cost-effectiveness of loan or lease program
                    on a metric-ton-of-greenhouse gas-saved-per-dollar
                    basis;
                        ``(B) ability to promote the loan or lease program
                    and associated technologies and strategies to the
                    target audience; and
                ``(4) reporting requirements for entities that receive
            awards, including--
                        ``(A) actual cost-effectiveness and greenhouse gas
                    savings from the loan or lease program based on a
                    methodology designated by the Administrator;
                        ``(B) the total number of applications and number
                    of approved applications; and
                        ``(C) terms granted to loan and lease recipients
                    compared to prevailing market practices.
        ``(h) Authorization of Appropriations.--Such sums as necessary are
    authorized to be appropriated to the Administrator to carry out this
    section.''.

    SEC. 224. STATE VEHICLE FLEETS.

        Section 507(o) of the Energy Policy Act of 1992 (42 U.S.C. 13257)
    is amended by adding the following new paragraph at the end thereof:
        ``(3) The Secretary shall revise the rules under this subsection
    with respect to the types of alternative fueled vehicles required for
    compliance with this subsection to ensure those rules are consistent
    with any guidance issued pursuant to section 303 of this Act.''.

               Subtitle D--Industrial Energy Efficiency Programs

    SEC. 241. INDUSTRIAL PLANT ENERGY EFFICIENCY STANDARDS.

        The Secretary of Energy shall continue to support the development
    of the American National Standards Institute (ANSI) voluntary
    industrial plant energy efficiency certification program, pending
    International Standards Organization (ISO) consensus standard 50001,
    and other related ANSI/ISO standards. In addition, the Department shall
    undertake complementary activities through the Department of Energy's
    Industry Technologies Program that support the voluntary implementation
    of such standards by manufacturing firms. There are authorized to be
    appropriated to the Secretary such sums as are necessary to carry out
    these activities. The Secretary shall report to Congress on the status
    of standards development and plans for further standards development
    pursuant to this section by not later than 18 months after the date of
    enactment of this Act, and shall prepare a second such report 18 months
    thereafter.

    SEC. 242. ELECTRIC AND THERMAL WASTE ENERGY RECOVERY AWARD PROGRAM.

        (a) Electric and Thermal Waste Energy Recovery Awards.--The
    Secretary of Energy shall establish a program to make monetary awards
    to the owners and operators of new and existing electric energy
    generation facilities or thermal energy production facilities using
    fossil or nuclear fuel, to encourage them to use innovative means of
    recovering any thermal energy that is a potentially useful byproduct of
    electric power generation or other processes to--
                (1) generate additional electric energy; or
                (2) make sales of thermal energy not used for electric
            generation, in the form of steam, hot water, chilled water, or
            desiccant regeneration, or for other commercially valid
            purposes.
        (b) Amount of Awards.--
                (1) Eligibility.--Awards shall be made under subsection (a)
            only for the use of innovative means that achieve net energy
            efficiency at the facility concerned significantly greater than
            the current standard technology in use at similar facilities.
                (2) Amount.--The amount of an award made under subsection
            (a) shall equal an amount up to the value of 25 percent of the
            energy projected to be recovered or generated during the first
            5 years of operation of the facility using the innovative
            energy recovery method, or such lesser amount that the
            Secretary determines to be the minimum amount that can cost-
            effectively stimulate such innovation.
                (3) Limitation.--No person may receive an award under this
            section if a grant under the waste energy incentive grant
            program under section 373 of the Energy Policy and Conservation
            Act (42 U.S.C. 6343) is made for the same energy savings
            resulting from the same innovative method.
        (c) Regulatory Status.--The Secretary of Energy shall--
                (1) assist State regulatory commissions to identify and
            make changes in State regulatory programs for electric
            utilities to provide appropriate regulatory status for thermal
            energy byproduct businesses of regulated electric utilities to
            encourage those utilities to enter businesses making the sales
            referred to in subsection (a)(2); and
                (2) encourage self-regulated utilities to enter businesses
            making the sales referred to in subsection (a)(2).
        (d) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary of Energy such sums as are necessary for
    the purposes of this section.

    SEC. 243. CLARIFYING ELECTION OF WASTE HEAT RECOVERY FINANCIAL
                  INCENTIVES.

        Section 373(e) of the Energy Policy and Conservation Act (42 U.S.C.
    6343(e)) is amended--
                (1) by striking ``that qualifies for'' and inserting ``who
            elects to claim''; and
                (2) by inserting ``from that project'' after ``for waste
            heat recovery''.

    SEC. 244. MOTOR MARKET ASSESSMENT AND COMMERCIAL AWARENESS PROGRAM.

        (a) Findings.--Congress finds that--
                (1) electric motor systems account for about half of the
            electricity used in the United States;
                (2) electric motor energy use is determined by both the
            efficiency of the motor and the system in which the motor
            operates;
                (3) Federal Government research on motor end use and
            efficiency opportunities is more than a decade old; and
                (4) the Census Bureau has discontinued collection of data
            on motor and generator importation, manufacture, shipment, and
            sales.
        (b) Definitions.--In this section:
                (1) Department.--The term ``Department'' means the
            Department of Energy.
                (2) Interested parties.--The term ``interested parties''
            includes--
                        (A) trade associations;
                        (B) motor manufacturers;
                        (C) motor end users;
                        (D) electric utilities; and
                        (E) individuals and entities that conduct energy
                    efficiency programs.
                (3) Secretary.--The term ``Secretary'' means the Secretary
            of Energy, in consultation with interested parties.
        (c) Assessment.--The Secretary shall conduct an assessment of
    electric motors and the electric motor market in the United States that
    shall--
                (1) include important subsectors of the industrial and
            commercial electric motor market (as determined by the
            Secretary), including--
                        (A) the stock of motors and motor-driven equipment;
                        (B) efficiency categories of the motor population;
                    and
                        (C) motor systems that use drives, servos, and
                    other control technologies;
                (2) characterize and estimate the opportunities for
            improvement in the energy efficiency of motor systems by market
            segment, including opportunities for--
                        (A) expanded use of drives, servos, and other
                    control technologies;
                        (B) expanded use of process control, pumps,
                    compressors, fans or blowers, and material handling
                    components; and
                        (C) substitution of existing motor designs with
                    existing and future advanced motor designs, including
                    electronically commutated permanent magnet, interior
                    permanent magnet, and switched reluctance motors; and
                (3) develop an updated profile of motor system purchase and
            maintenance practices, including surveying the number of
            companies that have motor purchase and repair specifications,
            by company size, number of employees, and sales.
        (d) Recommendations; Update.--Based on the assessment conducted
    under subsection (c), the Secretary shall--
                (1) develop--
                        (A) recommendations to update the detailed motor
                    profile on a periodic basis;
                        (B) methods to estimate the energy savings and
                    market penetration that is attributable to the Save
                    Energy Now Program of the Department; and
                        (C) recommendations for the Director of the Census
                    Bureau on market surveys that should be undertaken in
                    support of the motor system activities of the
                    Department; and
                (2) prepare an update to the Motor Master+ program of the
            Department.
        (e) Program.--Based on the assessment, recommendations, and update
    required under subsections (c) and (d), the Secretary shall establish a
    proactive, national program targeted at motor end-users and delivered
    in cooperation with interested parties to increase awareness of--
                (1) the energy and cost-saving opportunities in commercial
            and industrial facilities using higher efficiency electric
            motors;
                (2) improvements in motor system procurement and management
            procedures in the selection of higher efficiency electric
            motors and motor-system components, including drives, controls,
            and driven equipment; and
                (3) criteria for making decisions for new, replacement, or
            repair motor and motor system components.

    SEC. 245. MOTOR EFFICIENCY REBATE PROGRAM.

        (a) In General.--Part C of title III of the Energy Policy and
    Conservation Act (42 U.S.C. 6311 et seq.) is amended by adding at the
    end the following:

    ``SEC. 347. MOTOR EFFICIENCY REBATE PROGRAM.

        ``(a) Establishment.--Not later than January 1, 2010, in accordance
    with subsection (b), the Secretary shall establish a program to provide
    rebates for expenditures made by entities--
                ``(1) for the purchase and installation of a new electric
            motor that has a nominal full load efficiency that is not less
            than the nominal full load efficiency as defined in--
                        ``(A) table 12-12 of NEMA Standards Publication MG
                    1-2006 for random wound motors rated 600 volts or
                    lower; or
                        ``(B) table 12-13 of NEMA Standards Publication MG
                    1-2006 for form wound motors rated 5000 volts or lower;
                    and
                ``(2) to replace an installed motor of the entity the
            specifications of which are established by the Secretary by a
            date that is not later than 90 days after the date of enactment
            of this section.
        ``(b) Requirements.--
                ``(1) Application.--To be eligible to receive a rebate
            under this section, an entity shall submit to the Secretary an
            application in such form, at such time, and containing such
            information as the Secretary may require, including--
                        ``(A) demonstrated evidence that the entity
                    purchased an electric motor described in subsection
                    (a)(1) to replace an installed motor described in
                    subsection (a)(2);
                        ``(B) demonstrated evidence that the entity--
                                ``(i) removed the installed motor of the
                            entity from service; and
                                ``(ii) properly disposed the installed
                            motor of the entity; and
                        ``(C) the physical nameplate of the installed motor
                    of the entity.
                ``(2) Authorized amount of rebate.--The Secretary may
            provide to an entity that meets each requirement under
            paragraph (1) a rebate the amount of which shall be equal to
            the product obtained by multiplying--
                        ``(A) the nameplate horsepower of the electric
                    motor purchased by the entity in accordance with
                    subsection (a)(1); and
                        ``(B) $25.00.
                ``(3) Payments to distributors of qualifying electric
            motors.--To assist in the payment for expenses relating to
            processing and motor core disposal costs, the Secretary shall
            provide to the distributor of an electric motor described in
            subsection (a)(1), the purchaser of which received a rebate
            under this section, an amount equal to the product obtained by
            multiplying--
                        ``(A) the nameplate horsepower of the electric
                    motor; and
                        ``(B) $5.00.
        ``(c) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section, to remain available until
    expended--
                ``(1) $80,000,000 for fiscal year 2011;
                ``(2) $75,000,000 for fiscal year 2012;
                ``(3) $70,000,000 for fiscal year 2013;
                ``(4) $65,000,000 for fiscal year 2014; and
                ``(5) $60,000,000 for fiscal year 2015.''.
        (b) Table of Contents.--The table of contents of the Energy Policy
    and Conservation Act (42 U.S.C. prec. 6201) is amended by adding at the
    end of the items relating to part C of title III the following:

    ``Sec. 347. Motor efficiency rebate program.''.

    SEC. 246. CLEAN ENERGY MANUFACTURING REVOLVING LOAN FUND PROGRAM.

        The National Institute of Standards and Technology Act (15 U.S.C.
    271 et seq.) is amended by inserting after section 26 the following:

    ``SEC. 27. CLEAN ENERGY MANUFACTURING REVOLVING LOAN FUND PROGRAM.

        ``(a) Purposes.--The purposes of this section are as follows:
                ``(1) To develop the long-term manufacturing capacity of
            the United States.
                ``(2) To create jobs through the retooling and expansion of
            manufacturing facilities to produce clean energy technology
            products and energy efficient products.
                ``(3) To improve the long-term competitiveness of domestic
            manufacturing by increasing the energy efficiency of
            manufacturing facilities.
                ``(4) To assist small and medium-sized manufacturers
            diversify operations to respond to emerging clean energy
            technology product markets.
        ``(b) Definitions.--In this section:
                ``(1) Clean energy technology product.--The term `clean
            energy technology product' means technology products relating
            to the following:
                        ``(A) Wind turbines.
                        ``(B) Solar energy.
                        ``(C) Fuel cells.
                        ``(D) Advanced batteries, battery systems, or
                    storage devices.
                        ``(E) Biomass equipment.
                        ``(F) Geothermal equipment.
                        ``(G) Advanced biofuels.
                        ``(H) Ocean energy equipment.
                        ``(I) Carbon capture and storage.
                        ``(J) Such other products as the Secretary
                    determines--
                                ``(i) relate to the production, use,
                            transmission, storage, control, or conservation
                            of energy;
                                ``(ii) reduce greenhouse gas
                            concentrations;
                                ``(iii) achieve the earliest and maximum
                            emission reductions within a reasonable period
                            per dollar invested;
                                ``(iv) result in the fewest non-greenhouse
                            gas environmental impacts; and
                                ``(v) either--
                                        ``(I) reduce the need for
                                    additional energy supplies by--
                                                ``(aa) using existing
                                            energy supplies with greater
                                            efficiency; or
                                                ``(bb) by transmitting,
                                            distributing, or transporting
                                            energy with greater
                                            effectiveness through the
                                            infrastructure of the United
                                            States; or
                                        ``(II) diversity the sources of
                                    energy supply of the United States--
                                                ``(aa) to strengthen energy
                                            security; and
                                                ``(bb) to increase supplies
                                            with a favorable balance of
                                            environmental effects if the
                                            entire technology system is
                                            considered.
                ``(2) Energy efficient product.--The term `energy efficient
            product' means a product that, as determined by the Secretary
            in consultation with the Secretary of Energy--
                        ``(A) consumes significantly less energy than the
                    average amount that all similar products consumed on
                    the day before the date of the enactment of this Act;
                    or
                        ``(B) is a component, system, or group of
                    subsystems that is designed, developed, and validated
                    to optimize the energy efficiency of a product.
                ``(3) Hollings manufacturing extension center.--The term
            `Hollings Manufacturing Extension Center' means a center
            established under section 25.
                ``(4) Hollings manufacturing partnership program.--The term
            `Hollings Manufacturing Partnership Program' means the program
            established under sections 25 and 26.
                ``(5) Program.--The term `Program' means the grant program
            established pursuant to subsection (c)(1).
                ``(6) Revolving loan fund.--The term `revolving loan fund'
            means a revolving loan fund described in subsection (d).
                ``(7) Secretary.--Except as otherwise provided, the term
            `Secretary' means the Secretary of Commerce.
                ``(8) Small or medium-sized manufacturer.--The term `small
            or medium-sized manufacturer' means a manufacturer that employs
            fewer than 500 full-time equivalent employees at a
            manufacturing facility that is not owned or controlled by an
            automobile manufacturer.
        ``(c) Grant Program.--
                ``(1) Establishment.--Not later than 120 days after the
            date of the enactment of this section, the Secretary shall
            establish a program under which the Secretary shall award
            grants to States to establish revolving loan funds to provide
            loans to small and medium-sized manufacturers to finance the
            cost of--
                        ``(A) reequipping, expanding, or establishing
                    (including applicable engineering costs) a
                    manufacturing facility in the United States to
                    produce--
                                ``(i) clean energy technology products;
                                ``(ii) energy efficient products; or
                                ``(iii) integral component parts of clean
                            energy technology products or energy efficient
                            products; or
                        ``(B) reducing the energy intensity or greenhouse
                    gas production of a manufacturing facility in the
                    United States, including using energy intensive
                    feedstocks.
                ``(2) Maximum amount.--The Secretary may not award a grant
            under the Program in an amount that exceeds $500,000,000 in any
            fiscal year.
        ``(d) Criteria for Awarding Grants.--
                ``(1) Matching funds.--The Secretary may make a grant to a
            State under the Program only if the State agrees to ensure that
            for each loan provided by the State under the Program, not less
            than 20 percent of the amount of each loan will come from a
            non-Federal source.
                ``(2) Administrative costs.--A State receiving a grant
            under the Program may only use such amount of the grant for the
            costs of administering the revolving loan fund as the Secretary
            shall provide in regulations.
                ``(3) Application.--Each State seeking a grant under the
            Program shall submit to the Secretary an application therefor
            in such form and in such manner as the Secretary considers
            appropriate.
                ``(4) Evaluation.--The Secretary shall evaluate and
            prioritize an application submitted by a State for a grant
            under the Program on the basis of--
                        ``(A) the description of the revolving loan fund to
                    be established with the grant and how such revolving
                    loan fund will achieve the purposes described in
                    subsection (a);
                        ``(B) whether the State will be able to provide
                    loans from the revolving loan fund to small or medium-
                    sized manufacturers before the date that is 120 days
                    after the date on which the State receives the grant;
                        ``(C) a description of how the State will
                    administer the revolving loan fund in coordination with
                    other State and Federal programs, including programs
                    administered by the Assistant Secretary for Economic
                    Development;
                        ``(D) a description of the actual or potential
                    clean energy manufacturing supply chains, including
                    significant component parts, in the region served by
                    the revolving loan fund;
                        ``(E) how the State will target the provision of
                    loans under the Program to manufacturers located in
                    regions characterized by high unemployment and sudden
                    and severe economic dislocation, in particular where
                    mass layoffs have resulted in a precipitous increase in
                    unemployment;
                        ``(F) the availability of a skilled manufacturing
                    workforce in the region served by the revolving loan
                    fund and the capacity of the region's workforce and
                    education systems to provide pathways for unemployed or
                    low-income workers into skilled manufacturing
                    employment;
                        ``(G) a description of how the State will target
                    loans to small or medium-sized manufacturers who are--
                                ``(i) manufacturers of automobile
                            components; and
                                ``(ii) either--
                                        ``(I) increasing the energy
                                    efficiency of their manufacturing
                                    facilities; or
                                        ``(II) retooling to manufacture
                                    clean energy products or energy
                                    efficient products, including
                                    manufacturing components to improve the
                                    compliance of an automobile with fuel
                                    economy standards prescribed under
                                    section 32902 of title 49, United
                                    States Code;
                        ``(H) a description of how the State will use the
                    loan fund to achieve the earliest and maximum
                    greenhouse gas emission reductions within a reasonable
                    period of time per dollar invested and with the fewest
                    non-greenhouse gas environmental impacts; and
                        ``(I) such other factors as the Secretary considers
                    appropriate to ensure that grants awarded under the
                    Program effectively and efficiently achieve the
                    purposes described in subsection (a).
        ``(e) Revolving Loan Funds.--
                ``(1) In general.--A State receiving a grant under the
            Program shall establish, maintain, and administer a revolving
            loan fund in accordance with this subsection.
                ``(2) Deposits.--A revolving loan fund shall consist of the
            following:
                        ``(A) Amounts from grants awarded under this
                    section.
                        ``(B) All amounts held or received by the State
                    incident to the provision of loans described in
                    subsection (f), including all collections of principal
                    and interest.
                ``(3) Expenditures.--Amounts in the revolving loan fund
            shall be available for the provision and administration of
            loans in accordance with subsection (f).
                ``(4) Limitation.--No funds provided pursuant to this
            section may be leveraged through use of tax-exempt bonding
            authority by a State or a political subdivision of a State.
        ``(f) Loans.--
                ``(1) In general.--A State receiving a grant under this
            section shall use the amount in the revolving loan fund to
            provide loans to small and medium-sized manufacturers as
            described in subsection (c)(1).
                ``(2) Loan terms and conditions.--The following shall apply
            with respect to loans provided under paragraph (1):
                        ``(A) Terms.--Loans shall have a term determined by
                    the State receiving the grant as follows:
                                ``(i) For fixed assets, the term of the
                            loan shall not exceed the useful life of the
                            asset and shall be less than 15 years.
                                ``(ii) For working capital, the term of the
                            loan shall not exceed 36 months.
                        ``(B) Interest rates.--Loans shall bear an interest
                    rate determined by the State receiving the grant as
                    follows:
                                ``(i) The interest rate shall enable the
                            loan recipient to accomplish the activities
                            described in subparagraphs (A) and (B) of
                            subsection (c)(1).
                                ``(ii) The interest rate may be set below-
                            market interest rates.
                                ``(iii) The interest rate may not be less
                            than zero percent.
                                ``(iv) The interest rate may not exceed the
                            current prime rate plus 500 basis points.
                        ``(C) Description and budget for use of loan
                    funds.--Each recipient of a loan from a State under the
                    Program shall develop and submit to the State and the
                    Secretary a description and budget for the use of loan
                    amounts, including a description of the following:
                                ``(i) Any new business expected to be
                            developed with the loan.
                                ``(ii) Any improvements to manufacturing
                            operations to be developed with the loan.
                                ``(iii) Any technology expected to be
                            commercialized with the loan.
                        ``(D) Priority in review and preference in
                    selection for certain loan applicants.--
                                ``(i) Review.--In reviewing applications
                            submitted by small or medium-sized
                            manufacturers for a loan, a recipient of a
                            grant under the Program shall give priority to
                            small or medium-sized manufacturers described
                            in clause (iii).
                                ``(ii) Selection.--In selecting small or
                            medium-sized manufacturers to receive a loan, a
                            recipient of a grant under the Program shall
                            give preference to small or medium-sized
                            manufacturers described in clause (iii).
                                ``(iii) Priority and preferred small or
                            medium-sized manufacturers.--A small or medium-
                            sized manufacturer described in this clause is
                            a manufacturer that--
                                        ``(I) is certified by a Hollings
                                    Manufacturing Extension Center or a
                                    manufacturing-related local
                                    intermediary designated by the
                                    Secretary for purposes of providing
                                    such certification; or
                                        ``(II) provides individuals
                                    employed at the manufacturing
                                    facilities of the manufacturer--
                                                ``(aa) pay in amounts that
                                            are, on average, equal to or
                                            more than the average wage of
                                            an individual working in a
                                            manufacturing facility in the
                                            State; and
                                                ``(bb) health benefits.
                                ``(iv) Certification by hollings
                            manufacturing extension center.--A Hollings
                            Manufacturing Extension Center or other entity
                            designated by the Secretary for purposes of
                            providing certification under clause (iii)(I)
                            shall only certify applications for a loan
                            after carrying out a qualitative and
                            quantitative review of the applicant's business
                            strategy, manufacturing operations, and
                            technological ability to contribute to the
                            purposes described in subsection (a).
                        ``(E) Repayment upon relocation outside united
                    states.--
                                ``(i) In general.--If a person receives a
                            loan under paragraph (1) to finance the cost of
                            reequipping, expanding, or establishing a
                            manufacturing facility as described in
                            subsection (c)(1)(A) or to reduce the energy
                            intensity of a manufacturing facility and such
                            person relocates the production activities of
                            such manufacturing facility outside the United
                            States during the term of the loan, the
                            recipient shall repay such loan in full with
                            interest as described in clause (ii) and for a
                            duration described in clause (iii).
                                ``(ii) Payment of interest.--Any amount
                            owed by the recipient of a loan under paragraph
                            (1) who is required to repay the loan under
                            clause (i) shall bear interest at a penalty
                            rate determined by the Secretary to deter
                            recipients of loans under paragraph (1) from
                            relocating production activities as described
                            in clause (i).
                                ``(iii) Period of repayment.--Repayment of
                            a loan under clause (i) shall be for a duration
                            determined by the Secretary.
                        ``(F) Compliance with wage rate requirements.--Each
                    recipient of a loan shall undertake and agree to
                    incorporate or cause to be incorporated into all
                    contracts for construction, alteration or repair, which
                    are paid for in whole or in part with funds obtained
                    pursuant to such loan, a requirement that all laborers
                    and mechanics employed by contractors and
                    subcontractors performing construction, alteration or
                    repair shall be paid wages at rates not less than those
                    determined by the Secretary of Labor, in accordance
                    with subchapter IV of chapter 31 of title 40, United
                    States Code (known as the `Davis-Bacon Act'), to be
                    prevailing for the corresponding classes of laborers
                    and mechanics employed on projects of a character
                    similar to the contract work in the same locality in
                    which the work is to be performed. The Secretary of
                    Labor shall have, with respect to the labor standards
                    specified in this subparagraph, the authority and
                    functions set forth in Reorganization Plan Numbered 14
                    of 1950 (15 Fed. Reg. 3176; 64 Stat. 1267) and section
                    3145 of title 40, United States Code.
                        ``(G) Annual reports by loan recipients.--Each
                    recipient of a loan issued by a State under paragraph
                    (1) shall, not less frequently than once each year
                    during the term of the loan, submit to such State a
                    report containing such information as the Secretary may
                    specify for purposes of the Program, including
                    information that the Secretary can use to determine
                    whether a recipient of a loan is required to repay the
                    loan under subparagraph (E).
                ``(3) Annual reports by grant recipients.--Each recipient
            of a grant under the Program shall, not less frequently than
            once each year, submit to the Secretary a report on the impact
            of each loan issued by the State under the Program and the
            aggregate impact of all loans so issued, including the
            following:
                        ``(A) The sales increased or retained.
                        ``(B) Cost savings or costs avoided.
                        ``(C) Additional investment encouraged.
                        ``(D) Jobs created or retained.
        ``(g) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $15,000,000,000 for each of
    fiscal years 2010 and 2011.''.

    SEC. 247. CLEAN ENERGY AND EFFICIENCY MANUFACTURING PARTNERSHIPS.

        (a) Hollings Manufacturing Partnership Program.--Section 25(b) of
    the National Institute of Standards and Technology Act (15 U.S.C.
    278k(b)) is amended--
                (1) in paragraph (2), by striking ``and'' at the end;
                (2) in paragraph (3), by striking the period at the end and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(4) the establishment of a clean energy manufacturing
            supply chain initiative--
                        ``(A) to support manufacturers in their
                    identification of and diversification to new markets,
                    including support for manufacturers transitioning to
                    the use of clean energy supply chains;
                        ``(B) to assist manufacturers improve their
                    competitiveness by reducing energy intensity and
                    greenhouse gas production, including the use of energy
                    intensive feedstocks;
                        ``(C) to increase adoption and implementation of
                    innovative manufacturing technologies;
                        ``(D) to coordinate and leverage the expertise of
                    the National Laboratories and Technology Centers and
                    the Industrial Assessment Centers of the Department of
                    Energy to meet the needs of manufacturers; and
                        ``(E) to identify, assist, and certify
                    manufacturers seeking loans under section 27(e)(1).''.
        (b) Reduction in Cost Share Requirements.--Section 25(c) of such
    Act (15 U.S.C. 278k(c)) is amended--
                (1) in paragraph (1), by inserting ``or as provided in
            paragraph (5)'' after ``not to exceed six years'';
                (2) in paragraph (3)(B), by striking ``not less than 50
            percent of the costs incurred for the first 3 years and an
            increasing share for each of the last 3 years'' and inserting
            ``50 percent of the costs incurred or such lesser percentage of
            the costs incurred as determined appropriate by the Secretary
            by rule''; and
                (3) in paragraph (5)--
                        (A) by striking ``at declining levels'';
                        (B) by striking ``one third'' and inserting ``50
                    percent''; and
                        (C) by inserting ``, or such lesser percentage as
                    determined appropriate by the Secretary by rule,''
                    after ``maintenance costs''.
        (c) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary of Commerce for the Hollings
    Manufacturing Partnership Program authorized under sections 25 of the
    National Institute of Standards and Technology Act (15 U.S.C. 278k) and
    for the provision of assistance under section 26 of such Act (15 U.S.C.
    278l)--
                (1) $200,000,000 for fiscal year 2010;
                (2) $250,000,000 for fiscal year 2011;
                (3) $300,000,000 for fiscal year 2012;
                (4) $350,000,000 for fiscal year 2013; and
                (5) $400,000,000 for fiscal year 2014.

    SEC. 248. TECHNICAL AMENDMENTS.

        (a) Amendment to National Institute of Standards and Technology
    Act.--Section 25 of the National Institute of Standards and Technology
    Act (15 U.S.C. 278k(b)) is amended--
                (1) in subsection (a), by striking ``(hereafter in this Act
            referred to as the `Centers')''; and
                (2) by adding at the end the following:
        ``(g) Designation.--
                ``(1) Hollings manufacturing partnership program.--The
            program under this section shall be known as the `Hollings
            Manufacturing Partnership Program'.
                ``(2) Hollings manufacturing extension centers.--The
            Regional Centers for the Transfer of Manufacturing Technology
            created and supported under subsection (a) shall be known as
            the `Hollings Manufacturing Extension Centers' (in this Act
            referred to as the `Centers').''.
        (b) Amendment to Consolidated Appropriations Act, 2005.--Division B
    of title II of the Consolidated Appropriations Act, 2005 (Public Law
    108-447; 118 Stat. 2879; 15 U.S.C. 278k note) is amended under the
    heading ``industrial technology services'' by striking ``2007: Provided
    further, That'' and all that follows through ``Extension Centers.'' and
    inserting ``2007.''.

       Subtitle E--Improvements in Energy Savings Performance Contracting

    SEC. 251. ENERGY SAVINGS PERFORMANCE CONTRACTS.

        (a) Competition Requirements for Task or Delivery Orders Under
    Energy Savings Performance Contracts.--
                (1) Competition requirements.--Subsection (a) of section
            801 of the National Energy Conservation Policy Act (42 U.S.C.
            8287(a)) is amended by adding at the end the following
            paragraph:
        ``(3)(A) The head of a Federal agency may issue a task or delivery
    order under an energy savings performance contract by--
                ``(i) notifying all contractors that have received an award
            under such contract that the agency proposes to discuss energy
            savings performance services for some or all of its facilities
            and, following a reasonable period of time to provide a
            proposal in response to the notice, soliciting an expression of
            interest in performing site surveys or investigations and
            feasibility designs and studies and the submission of
            qualifications from such contractors, and including in such
            notice summary information concerning energy use for any
            facilities that the agency has specific interest in including
            in such contract;
                ``(ii) reviewing all expressions of interest and
            qualifications submitted pursuant to the notice under clause
            (i);
                ``(iii) selecting two or more contractors (from among those
            reviewed under clause (ii)) to conduct discussions concerning
            the contractors' respective qualifications to implement
            potential energy conservation measures, including requesting
            references demonstrating experience on similar efforts and the
            resulting energy savings of such similar efforts, and providing
            an opportunity for a post-award debriefing to all contractors
            that submitted expressions of interest and qualifications under
            clause (ii) pursuant to the notice;
                ``(iv) selecting and authorizing--
                        ``(I) more than one contractor (from among those
                    selected under clause (iii)) to conduct site surveys,
                    investigations, feasibility designs and studies or
                    similar assessments for the energy savings performance
                    contract services (or for discrete portions of such
                    services), for the purpose of allowing each such
                    contractor to submit a firm, fixed-price proposal to
                    implement specific energy conservation measures; or
                        ``(II) one contractor (from among those selected
                    under clause (iii)) to conduct a site survey,
                    investigation, a feasibility design and study or
                    similar for the purpose of allowing the contractor to
                    submit a firm, fixed-price proposal to implement
                    specific energy conservation measures;
                ``(v) negotiating a task or delivery order for energy
            savings performance contracting services with the contractor or
            contractors selected under clause (iv) based on the energy
            conservation measures identified; and
                ``(vi) issuing a task or delivery order for energy savings
            performance contracting services to such contractor or
            contractors.
        ``(B) The issuance of a task or delivery order for energy savings
    performance contracting services pursuant to subparagraph (A) is deemed
    to satisfy the task and delivery order competition requirements in
    section 2304c(d) of title 10, United States Code, and section 303J(d)
    of the Federal Property and Administrative Services Act of 1949 (41
    U.S.C. 253j(d)).
        ``(C) The Secretary may issue guidance as necessary to agencies
    issuing task or delivery orders pursuant to subparagraph (A).''.
                (2) Effective date.--The amendment made by paragraph (1) is
            inapplicable to task or delivery orders issued before the date
            of enactment of this section.
        (b) Inclusion of Thermal Renewable Energy.--Section 203 of the
    Energy Policy Act of 2005 (42 U.S.C. 15852) is amended--
                (1) in subsection (a), by striking ``electric''; and
                (2) in subsection (b)(2), by inserting ``or thermal'' after
            ``means electric''.
        (c)  Credit for Renewable Energy Produced and Used on Site.--
    Subsection (c) of section 203 of the Energy Policy Act of 2005 (42
    U.S.C. 15852) is amended to read as follows:
        ``(c) Calculation.--Renewable energy produced at a Federal
    facility, on Federal lands, or on Indian lands (as defined in title
    XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 et seq.)) shall
    be calculated separately from renewable energy consumed at a Federal
    facility, and each may be used to comply with the consumption
    requirement under subsection (a).''.
        (d) Financing Flexibility.--Section 801(a)(2)(E) of the National
    Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)(E)) is amended by
    striking ``In'' and inserting ``Notwithstanding any other provision of
    law, in''.

                        Subtitle F--Public Institutions

    SEC. 261. PUBLIC INSTITUTIONS.

        Section 399A of the Energy Policy and Conservation Act (42 U.S.C.
    6371h-1) is amended--
                (1) in subsection (a)(5), by striking ``or a designee'' and
            inserting ``an Indian tribe, a not-for-profit hospital or not-
            for-profit inpatient health care facility, or a designated
            agent'';
                (2) in subsection (c)(1), by striking subparagraph (C);
                (3) in subsection (f)(3)(A), by striking ``$1,000,000'' and
            inserting ``$2,500,000''; and
                (4) in subsection (i)(1), by striking ``$250,000,000 for
            each of fiscal years 2009 through 2013'' and inserting
            ``$250,000,000 for each of fiscal years 2010 through 2015''.

    SEC. 262. COMMUNITY ENERGY EFFICIENCY FLEXIBILITY.

        Section 545(b)(3) of the Energy Independence and Security Act of
    2007 (42 U.S.C. 17155(b)(3)) is amended--
                (1) by striking ``Indian tribe may use'' and all that
            follows through ``for administrative expenses'' and inserting
            ``Indian tribe may use for administrative expenses'';
                (2) by striking subparagraphs (B) and (C);
                (3) by redesignating the remaining clauses (i) and (ii) as
            subparagraphs (A) and (B), respectively and adjusting the
            margin of those subparagraphs accordingly; and
                (4) by striking the semicolon at the end and inserting a
            period.

    SEC. 263. SMALL COMMUNITY JOINT PARTICIPATION.

        (a) Section 541(3)(A) of the Energy Independence and Security Act
    of 2007 is amended in clause (i) by striking ``and'' at the end of
    subclause (II), in clause (ii) by striking the period at the end of
    subclause (II) and inserting ``; or'', and by inserting the following
    new clause (iii):
                        ``(iii) a group of adjacent, contiguous, or
                    geographically proximate units of local government that
                    reach agreement to act jointly for purposes of this
                    section and that represent a combined population of not
                    less than 35,000.''.
        (b) Section 541(3)(B) of the Energy Independence and Security Act
    of 2007 is amended in clause (i) by striking ``or'', in clause (ii) by
    striking the period at the end and inserting ``; or'', and by inserting
    the following new clause (iii):
                        ``(iii) a group of adjacent, contiguous, or
                    geographically proximate units of local government that
                    reach agreement to act jointly for purposes of this
                    section and that represent a combined population of not
                    less than 50,000.''.

    SEC. 264. LOW INCOME COMMUNITY ENERGY EFFICIENCY PROGRAM.

        (a) In General.--The Secretary of Energy is authorized to make
    grants to private, nonprofit, mission-driven community development
    organizations including community development corporations and
    community development financial institutions to provide financing to
    businesses and projects that improve energy efficiency; identify and
    develop alternative, renewable, and distributed energy supplies;
    provide technical assistance and promote job and business opportunities
    for low-income residents; and increase energy conservation in low
    income rural and urban communities.
        (b) Grants.--The purpose of such grants is to increase the flow of
    capital and benefits to low income communities, minority-owned and
    woman-owned businesses and entrepreneurs and other projects and
    activities located in low income communities in order to reduce
    environmental degradation, foster energy conservation and efficiency
    and create job and business opportunities for local residents. The
    Secretary may make grants on a competitive basis for--
                (1) investments that develop alternative, renewable, and
            distributed energy supplies;
                (2) capitalizing loan funds that lend to energy efficiency
            projects and energy conservation programs;
                (3) technical assistance to plan, develop, and manage an
            energy efficiency financing program; and
                (4) technical and financial assistance to assist small-
            scale businesses and private entities develop new renewable and
            distributed sources of power or combined heat and power
            generation.
        (c) Authorization of Appropriations.--For the purposes of this
    section there is authorized to be appropriated $50,000,000 for each of
    the fiscal years 2010 through 2015.

    SEC. 265. CONSUMER BEHAVIOR RESEARCH.

        (a) In General.--The Secretary of Energy is authorized to establish
    a research program to identify the factors affecting consumer actions
    to conserve energy and make improvements in energy efficiency. Through
    the program the Secretary will make grants to public and private
    institutions of higher education to study the effects of consumer
    behavior on total energy use; potential energy savings from changes in
    consumption habits; the ability to reduce greenhouse gas emissions
    through changes in energy consumption habits; increase public awareness
    of Federal climate adaptation and mitigation programs; and the
    potential for alterations in consumer behavior to further American
    energy independence. Grants may also fund projects that evaluate or
    inform public knowledge of the effects of energy consumption habits on
    these topics.
        (b) Grants.--The purpose of the program is to provide grants to
    public and private institutions of higher education to carry out
    projects which will improve understanding of the effects of consumer
    behavior on energy consumption and conservation. The Secretary shall
    make grants on a competitive basis for--
                (1) studies of the effects of consumer habits on energy
            consumption and conservation;
                (2) development of strategies that communicate the
            importance of energy efficiency and conservation to consumers;
                (3) identification of best practices to improve consumer
            energy use habits;
                (4) education programs that inform consumers about the
            implications of consumption habits on energy use and climate
            change;
                (5) evaluation of the effectiveness of programs designed to
            promote public awareness of Federal Government climate
            adaptation and mitigation activities; and
                (6) other projects that advance the mission of the program.
        (c) Report.--The Secretary of Energy shall provide Congress with a
    report on progress towards establishing the program within 120 days
    after the date of enactment of this Act.
        (d) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section.

                           Subtitle G--Miscellaneous

    SEC. 271. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS TECHNOLOGIES.

        Section 543 of the National Energy Conservation Policy Act (42
    U.S.C. 8253) is amended to read as follows:

    ``SEC. 543. ENERGY EFFICIENT INFORMATION AND COMMUNICATIONS
                  TECHNOLOGIES.

        ``(a) In General.--Not later than 1 year after the date of
    enactment of the American Clean Energy and Security Act of 2009, each
    Federal agency shall collaborate with the Director of the Office of
    Management and Budget (referred to in this section as the `Director')
    to create an implementation strategy, including best practices and
    measurement and verification techniques, for the purchase and use of
    energy efficient information and communications technologies and
    practices. Wherever possible, existing standards, specifications,
    performance metrics, and best management practices that have been or
    are being developed in open collaboration and with broad stakeholder
    input and review should be incorporated. In addition, agency strategies
    shall be flexible, cost-effective, and based on the specific operating
    requirements and statutory mission of each agency.
        ``(b) Energy Efficient Information and Communications
    Technologies.--In developing an implementation strategy, each agency
    shall--
                ``(1) consider information and communications technologies
            and infrastructure, including, but not limited to, advanced
            metering infrastructure, information and communications
            technology services and products, efficient data center
            strategies, applications modernization and rationalization,
            building systems energy efficiency, and telework; and
                ``(2) ensure that agencies are eligible to realize the
            savings and rewards brought about through increased
            efficiencies.
        ``(c) Performance Goals.--Not later than 6 months after the date of
    enactment of the American Clean Energy and Security Act of 2009, the
    Director shall establish performance goals for evaluating the efforts
    of the agencies in improving the maintenance, purchase and use of
    energy efficiency of information and communications technology systems.
    These performance goals should measure information technology costs
    over a specific time horizon (3 to 5 years), providing a complete
    picture of all costs, including energy.
        ``(d) Report.--Not later than 18 months after the date of enactment
    of the American Clean Energy and Security Act of 2009, and annually
    thereafter, the Director shall submit a report to Congress on--
                ``(1) the progress of each agency in reducing energy use
            through its implementation strategy; and
                ``(2) new and emerging technologies that would help achieve
            increased energy efficiency.''.

    SEC. 272. NATIONAL ENERGY EFFICIENCY GOALS.

        (a) Goals.--The energy efficiency goals of the United States are--
                (1) to achieve an improvement in the overall energy
            productivity of the United States (measured in gross domestic
            product per unit of energy input) of at least 2.5 percent per
            year by the year 2012; and
                (2) to maintain that annual rate of improvement each year
            through 2030.
        (b) Strategic Plan.--
                (1) In general.--Not later than 1 year after the date of
            enactment of this Act, the Secretary of Energy (referred to in
            this section as the ``Secretary''), in cooperation with the
            Administrator and the heads of other appropriate Federal
            agencies, shall develop a strategic plan to achieve the
            national goals for improvement in energy productivity
            established under subsection (a).
                (2) Public input and comment.--The Secretary shall develop
            the plan in a manner that provides appropriate opportunities
            for public input and comment.
        (c) Plan Contents.--The strategic plan shall--
                (1) identify future regulatory, funding, and policy
            priorities that would assist the United States in meeting the
            national goals;
                (2) include energy savings estimates for each sector; and
                (3) include data collection methodologies and compilations
            used to establish baseline and energy savings data.
        (d) Plan Updates.--
                (1) In general.--The Secretary shall--
                        (A) update the strategic plan biennially; and
                        (B) include the updated strategic plan in the
                    national energy policy plan required by section 801 of
                    the Department of Energy Organization Act (42 U.S.C.
                    7321).
                (2) Contents.--In updating the plan, the Secretary shall--
                        (A) report on progress made toward implementing
                    efficiency policies to achieve the national goals
                    established under subsection (a); and
                        (B) verify, to the maximum extent practicable,
                    energy savings resulting from the policies.
        (e) Report to Congress and the Public.--The Secretary shall submit
    to Congress, and make available to the public, the initial strategic
    plan developed under subsection (b) and each updated plan.

    SEC. 273. AFFILIATED ISLAND ENERGY INDEPENDENCE TEAM.

        (a) Definitions.--In this section:
                (1) Affiliated island.--The term ``affiliated island''
            means--
                        (A) the Commonwealth of Puerto Rico;
                        (B) Guam;
                        (C) American Samoa;
                        (D) the Commonwealth of the Northern Mariana
                    Islands;
                        (E) the Federated States of Micronesia;
                        (F) the Republic of the Marshall Islands;
                        (G) the Republic of Palau; and
                        (H) the United States Virgin Islands.
                (2) Secretary.--The term ``Secretary'' means the Secretary
            of Energy (acting through the Assistant Secretary of Energy
            Efficiency and Renewable Energy), in consultation with the
            Secretary of the Interior and the Secretary of State.
                (3) Team.--The term ``team'' means the team established by
            the Secretary under subsection (b).
        (b) Establishment.--As soon as practicable after the date of
    enactment of this Act, the Secretary shall assemble a team of
    technical, policy, and financial experts to address the energy needs of
    each affiliated island--
                (1) to reduce the reliance and expenditure of each
            affiliated island on imported fossil fuels;
                (2) to increase the use by each affiliated island of
            indigenous, nonfossil fuel energy sources;
                (3) to improve the performance of the energy infrastructure
            of the affiliated island through projects--
                        (A) to improve the energy efficiency of power
                    generation, transmission, and distribution; and
                        (B) to increase consumer energy efficiency;
                (4) to improve the performance of the energy infrastructure
            of each affiliated island through enhanced planning, education,
            and training;
                (5) to adopt research-based and public-private partnership-
            based approaches as appropriate;
                (6) to stimulate economic development and job creation; and
                (7) to enhance the engagement by the Federal Government in
            international efforts to address island energy needs.
        (c) Duties of Team.--
                (1) Energy action plans.--
                        (A) In general.--In accordance with subparagraph
                    (B), the team shall provide technical, programmatic,
                    and financial assistance to each utility of each
                    affiliated island, and the government of each
                    affiliated island, as appropriate, to develop and
                    implement an energy Action Plan for each affiliated
                    island to reduce the reliance of each affiliated island
                    on imported fossil fuels through increased efficiency
                    and use of indigenous clean-energy resources.
                        (B) Requirements.--Each Action Plan described in
                    subparagraph (A) for each affiliated island shall
                    require and provide for--
                                (i) the conduct of 1 or more studies to
                            assess opportunities to reduce fossil fuel use
                            through--
                                        (I) the improvement of the energy
                                    efficiency of the affiliated island;
                                    and
                                        (II) the increased use by the
                                    affiliated island of indigenous clean-
                                    energy resources;
                                (ii) the identification and implementation
                            of the most cost-effective strategies and
                            projects to reduce the dependence of the
                            affiliated island on fossil fuels;
                                (iii) the promotion of education and
                            training activities to improve the capacity of
                            the local utilities of the affiliated island,
                            and the government of the affiliated island, as
                            appropriate, to plan for, maintain, and operate
                            the energy infrastructure of the affiliated
                            island through the use of local or regional
                            institutions, as appropriate;
                                (iv) the coordination of the activities
                            described in clause (iii) to leverage the
                            expertise and resources of international
                            entities, the Department of Energy, the
                            Department of the Interior, and the regional
                            utilities of the affiliated island;
                                (v) the identification, and development, as
                            appropriate, of research-based and private-
                            public, partnership approaches to implement the
                            Action Plan; and
                                (vi) any other component that the Secretary
                            determines to be necessary to reduce
                            successfully the use by each affiliated island
                            of fossil fuels.
                (2) Reports to secretary.--Not later than 1 year after the
            date on which the Secretary establishes the team and biennially
            thereafter, the team shall submit to the Secretary a report
            that contains a description of the progress of each affiliated
            island in--
                        (A) implementing the Action Plan of the affiliated
                    island developed under paragraph (1)(A); and
                        (B) reducing the reliance of the affiliated island
                    on fossil fuels.
        (d) Use of Regional Utility Organizations.--To provide expertise to
    affiliated islands to assist the affiliated islands in meeting the
    purposes of this section, the Secretary shall consider--
                (1) including regional utility organizations in the
            establishment of the team; and
                (2) providing assistance through regional utility
            organizations.
        (e) Annual Reports to Congress.--Not later than 30 days after the
    date on which the Secretary receives a report submitted by the team
    under subsection (c)(2), the Secretary shall submit to the appropriate
    committees of Congress a report that contains a summary of the report
    of the team.
        (f) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    SEC. 274. PRODUCT CARBON DISCLOSURE PROGRAM.

        (a) EPA Study.--The Administrator shall conduct a study to
    determine the feasibility of establishing a national program for
    measuring, reporting, publicly disclosing, and labeling products or
    materials sold in the United States for their carbon content, and
    shall, not later than 18 months after the date of enactment of this
    Act, transmit a report to Congress which shall include the following:
                (1) A determination of whether a national product carbon
            disclosure program and labeling program would be effective in
            achieving the intended goals of achieving greenhouse gas
            reductions and an examination of existing programs globally and
            their strengths and weaknesses.
                (2) Criteria for identifying and prioritizing sectors and
            products and processes that should be covered in such program
            or programs.
                (3) An identification of products, processes, or sectors
            whose inclusion could have a substantial carbon impact
            (prioritizing industrial products such as iron and steel,
            aluminum, cement, chemicals, and paper products, and also
            including food, beverage, hygiene, cleaning, household
            cleaners, construction, metals, clothing, semiconductor, and
            consumer electronics).
                (4) Suggested methodology and protocols for measuring the
            carbon content of the products across the entire carbon
            lifecycle of such products for use in a carbon disclosure
            program and labeling program.
                (5) A review of existing greenhouse gas product accounting
            standards, methodologies, and practices including the
            Greenhouse Gas Protocol, ISO 14040/44, ISO 14067, and
            Publically Available Specification 2050, and including a review
            of the strengths and weaknesses of each.
                (6) A survey of secondary databases including the
            Manufacturing Energy Consumption Survey and evaluate the
            quality of data for use in a product carbon disclosure program
            and product carbon labeling program and an identification of
            gaps in the data relative to the potential purposes of a
            national product carbon disclosure program and product carbon
            labeling program and development of recommendations for
            addressing these data gaps.
                (7) An assessment of the utility of comparing products and
            the appropriateness of product carbon standards.
                (8) An evaluation of the information needed on a label for
            clear and accurate communication, including what pieces of
            quantitative and qualitative information needs to be disclosed.
                (9) An evaluation of the appropriate boundaries of the
            carbon lifecycle analysis for different sectors and products.
                (10) An analysis of whether default values should be
            developed for products whose producer does not participate in
            the program or does not have data to support a disclosure or
            label and determine best ways to develop such default values.
                (11) A recommendation of certification and verification
            options necessary to assure the quality of the information and
            avoid greenwashing or the use of insubstantial or meaningless
            environmental claims to promote a product.
                (12) An assessment of options for educating consumers about
            product carbon content and the product carbon disclosure
            program and product carbon labeling program.
                (13) An analysis of the costs and timelines associated with
            establishing a national product carbon disclosure program and
            product carbon labeling program, including options for a phased
            approach. Costs should include those for businesses associated
            with the measurement of carbon footprints and those associated
            with creating a product carbon label and managing and operating
            a product carbon labeling program, and options for minimizing
            these costs.
                (14) An evaluation of incentives (such as financial
            incentives, brand reputation, and brand loyalty) to determine
            whether reductions in emissions can be accelerated through
            encouraging more efficient manufacturing or by encouraging
            preferences for lower-emissions products to substitute for
            higher-emissions products whose level of performance is no
            better.
        (b) Development of National Carbon Disclosure Program.--Upon
    conclusion of the study, and not more than 36 months after the date of
    enactment of this Act, the Administrator shall establish a national
    product carbon disclosure program, participation in which shall be
    voluntary, and which may involve a product carbon label with broad
    applicability to the wholesale and consumer markets to enable and
    encourage knowledge about carbon content by producers and consumers and
    to inform efforts to reduce energy consumption (carbon dioxide
    equivalent emissions) nationwide. In developing such a program, the
    Administrator shall--
                (1) consider the results of the study conducted under
            subsection (a);
                (2) consider existing and planned programs and proposals
            and measurement standards (including the Publicly Available
            Specification 2050, standards to be developed by the World
            Resource Institute/World Business Council for Sustainable
            Development, the International Standards Organization, and the
            bill AB19 pending in the California legislature);
                (3) consider the compatibility of a national product carbon
            disclosure program with existing programs;
                (4) utilize incentives and other means to spur the adoption
            of product carbon disclosure and product carbon labeling;
                (5) develop protocols and parameters for a product carbon
            disclosure program, including a methodology and formula for
            assessing, verifying, and potentially labeling a product's
            greenhouse gas content, and for data quality requirements to
            allow for product comparison;
                (6) create a means to--
                        (A) document best practices;
                        (B) ensure clarity and consistency;
                        (C) work with suppliers, manufacturers, and
                    retailers to encourage participation;
                        (D) ensure that protocols are consistent and
                    comparable across like products; and
                        (E) evaluate the effectiveness of the program;
                (7) make publicly available information on product carbon
            content to ensure transparency;
                (8) provide for public outreach, including a consumer
            education program to increase awareness;
                (9) develop training and education programs to help
            businesses learn how to measure and communicate their carbon
            footprint and easy tools and templates for businesses to use to
            reduce cost and time to measure their products' carbon
            lifecycle;
                (10) consult with the Secretary of Energy, the Secretary of
            Commerce, the Federal Trade Commission, and other Federal
            agencies, as necessary;
                (11) gather input from stakeholders through consultations,
            public workshops or hearings with representatives of consumer
            product manufacturers, consumer groups, and environmental
            groups;
                (12) utilize systems for verification and product
            certification that will ensure that claims manufacturers make
            about their products are valid;
                (13) create a process for reviewing the accuracy of product
            carbon label information and protecting the product carbon
            label in the case of a change in the product's energy source,
            supply chain, ingredients, or other factors, and specify the
            frequency to which data should be updated; and
                (14) develop a standardized, easily understandable carbon
            label, if appropriate, and create a process for responding to
            inaccuracies and misuses of such a label.
        (c) Report to Congress.--Not later than 5 years after the program
    is established pursuant to subsection (b), the Administrator shall
    report to Congress on the effectiveness and impact of the program, the
    level of voluntary participation, and any recommendations for
    additional measures.
        (d) Definitions.--As used in this section--
                (1) the term ``carbon content'' means the amount of
            greenhouse gas emissions and their warming impact on the
            atmosphere expressed in carbon dioxide equivalent associated
            with a product's value chain;
                (2) the term ``carbon footprint'' means the level of
            greenhouse gas emissions produced by a particular activity,
            service, or entity; and
                (3) the term ``carbon lifecycle'' means the greenhouse gas
            emissions that are released as part of the processes of
            creating, producing, processing or manufacturing, modifying,
            transporting, distributing, storing, using, recycling, or
            disposing of goods and services.
        (e) Authorization of Appropriations.--There is authorized to be
    appropriated to the Administrator $5,000,000 for the study required by
    subsection (a) and $25,000,000 for each of fiscal years 2010 through
    2025 for the program required under subsection (b).

    SEC. 275. INDUSTRIAL ENERGY EFFICIENCY EDUCATION AND TRAINING
                  INITIATIVE.

        (a) In General.--The Secretary of Energy shall carry out a national
    education and awareness program for the purpose of informing building,
    facility, and industrial plant owners and managers and decisionmakers,
    government leaders, and industry leaders about the large energy-saving
    potential of greater use of mechanical insulation, and other benefits.
        (b) Purpose and Goals.--
                (1) Purpose.--The purpose of the initiative shall be to
            increase the energy efficiency of the commercial and industrial
            sectors through an ongoing program that will include--
                        (A) education and training sessions;
                        (B) Web-based information; and
                        (C) advertising.
                (2) Goals.--The goals of the initiative shall be to--
                        (A) educate and motivate commercial building owners
                    and industrial facility managers to utilize mechanical
                    insulation in new and existing facilities;
                        (B) preserve and create jobs while reducing energy
                    and greenhouse gas emissions;
                        (C) create a safer working environment and make
                    businesses more competitive in a global economy; and
                        (D) motivate and empower the industry to make
                    better use of mechanical insulation through awareness,
                    education, and training.
        (c) Report.--Not later than July 1, 2013, the Secretary shall
    submit to Congress a report describing the extent by which the
    initiative has been enacted and the actual and projected effectiveness
    of the program under this section, including the energy efficiency,
    greenhouse gas emissions reductions, cost savings, and safety benefits
    at manufacturing facilities, power plants, refineries, hospitals,
    universities, government buildings, and other commercial and industrial
    locations.
        (d) Authorization of Appropriations.--There are authorized to be
    appropriated $3,500,000 for each of fiscal years 2010 through 2014 to
    carry out this section.   The Secretary may enter into a cooperative
    agreement, including grant funding, with an industry association and
    union working collaboratively and having expertise on the installation,
    maintenance, measure of efficiencies and standards, and certification
    of mechanical insulation in buildings and facilities.
        (e) Termination of Authority.--The program carried out under this
    section shall terminate on December 31, 2014.

    SEC. 276. SENSE OF CONGRESS.

        It is the sense of Congress that the United States should--
                (1) continue to actively promote, within the International
            Civil Aviation Organization, the development of a global
            framework for the regulation of greenhouse gas emissions from
            civil aircraft that recognizes the uniquely international
            nature of the industry and treats commercial aviation
            industries in all countries fairly; and
                (2) work with foreign governments towards a global
            agreement that reconciles foreign carbon emissions reduction
            programs to minimize duplicative requirements and avoids
            unnecessary complication for the aviation industry, while still
            achieving the environmental goals.

         Subtitle H--Green Resources for Energy Efficient Neighborhoods

    SEC. 281. SHORT TITLE.

        This subtitle may be cited as the ``Green Resources for Energy
    Efficient Neighborhoods Act of 2009'' or the ``GREEN Act of 2009''.

    SEC. 282. DEFINITIONS.

        For purposes of this subtitle, the following definitions shall
    apply:
                (1) Green building standards.--The term ``green building
            standards'' means standards to require use of sustainable
            design principles to reduce the use of nonrenewable resources,
            encourage energy-efficient construction and rehabilitation and
            the use of renewable energy resources, minimize the impact of
            development on the environment, and improve indoor air quality.
                (2) HUD.--The term ``HUD'' means the Department of Housing
            and Urban Development.
                (3) HUD assistance.--The term ``HUD assistance'' means
            financial assistance that is awarded, competitively or
            noncompetitively, allocated by formula, or provided by HUD
            through loan insurance or guarantee.
                (4) Nonresidential structure.--The term ``nonresidential
            structures'' means only nonresidential structures that are
            appurtenant to single-family or multifamily housing residential
            structures, or those that are funded by the Secretary of
            Housing and Urban Development through the HUD Community
            Development Block Grant program.
                (5) Secretary.--The term ``Secretary'', unless otherwise
            specified, means the Secretary of Housing and Urban
            Development.

    SEC. 283. IMPLEMENTATION OF ENERGY EFFICIENCY PARTICIPATION INCENTIVES
                  FOR HUD PROGRAMS.

        (a) In General.--Not later than 180 days after the date of the
    enactment of this Act, the Secretary shall issue such regulations as
    may be necessary to establish annual energy efficiency participation
    incentives to encourage participants in programs administered by the
    Secretary, including recipients under programs for which HUD assistance
    is provided, to achieve substantial improvements in energy efficiency.
        (b) Requirement for Appropriation of Funds.--The requirement under
    subsection (a) for the Secretary to provide annual energy efficiency
    participation incentives pursuant to the provisions of this subtitle
    shall be subject to the annual appropriation of necessary funds.

    SEC. 284. BASIC HUD ENERGY EFFICIENCY STANDARDS AND STANDARDS FOR
                  ADDITIONAL CREDIT.

        (a) Basic HUD Standard.--
                (1) Residential structures.--A residential single-family or
            multifamily structure shall be considered to comply with the
            energy efficiency standards under this subsection if--
                        (A) the structure complies with an energy
                    efficiency building code that has been certified as in
                    compliance with section 304 of the Energy Conservation
                    and Production Act (42 U.S.C. 6833) as amended by
                    section 201 of this Act, or a national energy
                    efficiency building code adopted pursuant to that
                    section;
                        (B) the structure complies with the applicable
                    provisions of the American Society of Heating,
                    Refrigerating, and Air-Conditioning Engineers Standard
                    90.1-2007, as such standard or successor standard is in
                    effect for purposes of this section pursuant subsection
                    (c);
                        (C) the structure complies with the applicable
                    provisions of the 2009 International Energy
                    Conservation Code, as such standard or successor
                    standard is in effect for purposes of this section
                    pursuant subsection (c);
                        (D) in the case only of an existing structure,
                    where determined cost effective, the structure has
                    undergone rehabilitation or improvements, completed
                    after the date of the enactment of this Act, and the
                    energy consumption for the structure has been reduced
                    by at least 20 percent from the previous level of
                    consumption, as determined in accordance with energy
                    audits performed both before and after any
                    rehabilitation or improvements undertaken to reduce
                    such consumption; or
                        (E) the structure complies with the applicable
                    provisions of such other energy efficiency
                    requirements, standards, checklists, or ratings systems
                    as the Secretary may adopt and apply by regulation, as
                    may be necessary, for purposes of this section for
                    specific types of residential single-family or
                    multifamily structures or otherwise, except that the
                    Secretary shall make a determination regarding whether
                    to adopt and apply any such requirements, standards,
                    checklists, or rating system for purposes of this
                    section not later than the expiration of the 180-day
                    period beginning upon the date of receipt of any
                    written request, made in such form as the Secretary
                    shall provide, for such adoption and application.
            In addition to compliance with any of subparagraphs (A) through
            (E), the Secretary shall by regulation require, for any newly
            constructed residential single-family or multifamily structure
            to be considered to comply with the energy efficiency standards
            under this subsection, that the structure have appropriate
            electrical outlets with the facility and capacity to recharge a
            standard electric passenger vehicle, including an electric
            hybrid vehicle, where such vehicle would normally be parked.
                (2) Nonresidential structures.--For purposes of this
            section, the Secretary shall identify and adopt by regulation,
            as may be necessary, energy efficiency requirements, standards,
            checklists, or rating systems applicable to nonresidential
            structures that are constructed or rehabilitated with HUD
            assistance. A nonresidential structure shall be considered to
            comply with the energy efficiency standards under this
            subsection if the structure complies with the applicable
            provisions of any such energy efficiency requirements,
            standards, checklist, or rating systems identified and adopted
            by the Secretary pursuant to this paragraph, as such standards
            are in effect for purposes of this section pursuant to
            subsection (c).
                (3) Effect.--Nothing in this subsection may be construed to
            require any structure to comply with any standard established
            or adopted pursuant to this subsection, or identified in this
            subsection, or to provide any benefit or credit under any
            Federal program for any structure that complies with any such
            standard, except to the extent that--
                        (A) any provision of law other than this subsection
                    provides a benefit or credit under a Federal program
                    for compliance with a standard established or adopted
                    pursuant to this subsection, or identified in this
                    subsection; or
                        (B) the Secretary specifically provides pursuant to
                    subsection (c) for the applicability of such standard.
        (b) Enhanced Energy Efficiency Standards for Purposes of Providing
    Additional Credit Under Certain Federally Assisted Housing Programs.--
                (1) Purpose and effect.--
                        (A) Purpose.--The purpose of this subsection is to
                    establish energy efficiency and conservation standards
                    and green building standards that--
                                (i) provide for greater energy efficiency
                            and conservation in structures than is required
                            for compliance with the energy efficiency
                            standards under subsection (a) and then in
                            effect;
                                (ii) provide for green and sustainable
                            building standards not required by such
                            standards; and
                                (iii) can be used in connection with
                            Federal housing, housing finance, and
                            development programs to provide incentives for
                            greater energy efficiency and conservation and
                            for green and sustainable building methods,
                            elements, practices, and materials.
                        (B) Effect.--Nothing in this subsection may be
                    construed to require any structure to comply with any
                    standard established pursuant to this subsection or to
                    provide any benefit or credit under any Federal program
                    for any structure, except to the extent that any
                    provision of law other than this subsection provides a
                    benefit or credit under a Federal program for
                    compliance with a standard established pursuant to this
                    subsection.
                (2) Compliance.--A residential or nonresidential structure
            shall be considered to comply with the enhanced energy
            efficiency and conservation standards or the green building
            standards under this subsection, to the extent that such
            structure complies with the applicable provisions of the
            standards under paragraph (3) or (4), respectively (as such
            standards are in effect for purposes of this section, pursuant
            to paragraph (7)), in a manner that is not required for
            compliance with the energy efficiency standards under
            subsection (a) then in effect and subject to the Secretary's
            determination of which standards are applicable to which
            structures.
                (3) Energy efficiency and conservation standards.--The
            energy efficiency and conservation standards under this
            paragraph are as follows:
                        (A) Residential structures.--With respect to
                    residential structures:
                                (i) New construction.--For new
                            construction, the Energy Star standards
                            established by the Environmental Protection
                            Agency, as such standards are in effect for
                            purposes of this subsection pursuant to
                            paragraph (7);
                                (ii) Existing structures.--For existing
                            structures, a reduction in energy consumption
                            from the previous level of consumption for the
                            structure, as determined in accordance with
                            energy audits performed both before and after
                            any rehabilitation or improvements undertaken
                            to reduce such consumption, that exceeds the
                            reduction necessary for compliance with the
                            energy efficiency standards under subsection
                            (a) then in effect and applicable to existing
                            structures.
                        (B) Nonresidential structures.--With respect to
                    nonresidential structures, such energy efficiency and
                    conservation requirements, standards, checklists, or
                    rating systems for nonresidential structures as the
                    Secretary shall identify and adopt by regulation, as
                    may be necessary, for purposes of this paragraph.
                (4) Green building standards.--The green building standards
            under this paragraph are as follows:
                        (A) The national Green Communities criteria
                    checklist for residential construction that provides
                    criteria for the design, development, and operation of
                    affordable housing, as such checklist or successor
                    checklist is in effect for purposes of this section
                    pursuant to paragraph (7).
                        (B) The gold certification level for the LEED for
                    New Construction rating system, the LEED for Homes
                    rating system, the LEED for Core and Shell rating
                    system, as applicable, as such systems or successor
                    systems are in effect for purposes of this section
                    pursuant to paragraph (7).
                        (C) The Green Globes assessment and rating system
                    of the Green Buildings Initiative.
                        (D) For manufactured housing, energy star rating
                    with respect to fixtures, appliances, and equipment in
                    such housing, as such standard or successor standard is
                    in effect for purposes of this section pursuant to
                    paragraph (7).
                        (E) The National Green Building Standard.
                        (F) Any other requirements, standards, checklists,
                    or rating systems for green building or sustainability
                    as the Secretary may identify and adopt by regulation,
                    as may be necessary for purposes of this paragraph,
                    except that the Secretary shall make a determination
                    regarding whether to adopt and apply any such
                    requirements, standards, checklist, or rating system
                    for purposes of this section not later than the
                    expiration of the 180-day period beginning upon date of
                    receipt of any written request, made in such form as
                    the Secretary shall provide, for such adoption and
                    application.
                (5) Green building.--For purposes of this subsection, the
            term ``green building'' means, with respect to standards for
            structures, standards to require use of sustainable design
            principles to reduce the use of nonrenewable resources,
            minimize the impact of development on the environment, and to
            improve indoor air quality.
                (6) Energy audits.--The Secretary shall establish standards
            and requirements for energy audits for purposes of paragraph
            (3)(A)(ii) and, in establishing such standards, may consult
            with any advisory committees established pursuant to section
            285(c)(2) of this subtitle.
                (7) Applicability and updating of standards.--
                        (A) Applicability.--Except as provided in
                    subparagraph (B), the requirements, standards,
                    checklists, and rating systems referred to in this
                    subsection that are in effect for purposes of this
                    subsection are such requirements, standards,
                    checklists, and systems are as in existence upon the
                    date of the enactment of this Act.
                        (B) Updating.--For purposes of this section, the
                    Secretary may adopt and apply by regulation, as may be
                    necessary, future amendments and supplements to, and
                    editions of, the requirements, standards, checklists,
                    and rating systems referred to in this subsection,
                    including applicable energy efficiency building codes
                    that are certified as in compliance with section 304 of
                    the Energy Conservation and Production Act (42 U.S.C.
                    6833) as amended by section 201 of this Act, or
                    national energy efficiency building codes adopted
                    pursuant to that section.
        (c) Authority of Secretary To Apply Standards to Federally Assisted
    Housing and Programs.--
                (1) HUD housing and programs.--The Secretary of Housing and
            Urban Development may, by regulation, provide for the
            applicability of the energy efficiency standards under
            subsection (a) or the enhanced energy efficiency and
            conservation standards and green building standards under
            subsection (b), or both, with respect to any covered federally
            assisted housing described in paragraph (3)(A) or any HUD
            assistance, subject to minimum Federal codes or standards then
            in effect.
                (2) Rural housing.--The Secretary of Agriculture may, by
            regulation, provide for the applicability of the energy
            efficiency standards under subsection (a) or the enhanced
            energy efficiency and conservation standards and green building
            standards under subsection (b), or both, with respect to any
            covered federally assisted housing described in paragraph
            (3)(B) or any assistance provided with respect to rural housing
            by the Rural Housing Service of the Department of Agriculture,
            subject to minimum Federal codes or standards then in effect.
                (3) Covered federally assisted housing.--For purposes of
            this subsection, the term ``covered federally assisted
            housing'' means--
                        (A) any residential or nonresidential structure for
                    which any HUD assistance is provided; and
                        (B) any new construction of single-family housing
                    (other than manufactured homes) subject to mortgages
                    insured, guaranteed, or made by the Secretary of
                    Agriculture under title V of the Housing Act of 1949
                    (42 U.S.C. 1471 et seq.).

    SEC. 285. ENERGY EFFICIENCY AND CONSERVATION DEMONSTRATION PROGRAM FOR
                  MULTIFAMILY HOUSING PROJECTS ASSISTED WITH PROJECT-BASED
                  RENTAL ASSISTANCE.

        (a) Authority.--For multifamily housing projects for which project-
    based rental assistance is provided under a covered multifamily
    assistance program, the Secretary shall, subject to the availability of
    amounts provided in advance in appropriation Acts, carry out a program
    to demonstrate the effectiveness of funding a portion of the costs of
    meeting the enhanced energy efficiency standards under section 284(b).
    At the discretion of the Secretary, the demonstration program may
    include incentives for housing that is assisted with Indian housing
    block grants provided pursuant to the Native American Housing
    Assistance and Self-Determination Act of 1996, but only to the extent
    that such inclusion does not violate such Act, its regulations, and the
    goal of such Act of tribal self-determination.
        (b) Goals.--The demonstration program under this section shall be
    carried out in a manner that--
                (1) protects the financial interests of the Federal
            Government;
                (2) reduces the proportion of funds provided by the Federal
            Government and by owners and residents of multifamily housing
            projects that are used for costs of utilities for the projects;
                (3) encourages energy efficiency and conservation by owners
            and residents of multifamily housing projects and installation
            of renewable energy improvements, such as improvements
            providing for use of solar, wind, geothermal, or biomass energy
            sources;
                (4) creates incentives for project owners to carry out such
            energy efficiency renovations and improvements by allowing a
            portion of the savings in operating costs resulting from such
            renovations and improvements to be retained by the project
            owner, notwithstanding otherwise applicable limitations on
            dividends;
                (5) promotes the installation, in existing residential
            buildings, of energy-efficient and cost-effective improvements
            and renewable energy improvements, such as improvements
            providing for use of solar, wind, geothermal, or biomass energy
            sources;
                (6) tests the efficacy of a variety of energy efficiency
            measures for multifamily housing projects of various sizes and
            in various geographic locations;
                (7) tests methods for addressing the various, and often
            competing, incentives that impede owners and residents of
            multifamily housing projects from working together to achieve
            energy efficiency or conservation; and
                (8) creates a database of energy efficiency and
            conservation, and renewable energy, techniques, energy-savings
            management practices, and energy efficiency and conservation
            financing vehicles.
        (c) Approaches.--In carrying out the demonstration program under
    this section, the Secretary may--
                (1) enter into agreements with the Building America Program
            of the Department of Energy and other consensus committees
            under which such programs, partnerships, or committees assume
            some or all of the functions, obligations, and benefits of the
            Secretary with respect to energy savings;
                (2) establish advisory committees to advise the Secretary
            and any such third-party partners on technological and other
            developments in the area of energy efficiency and the creation
            of an energy efficiency and conservation credit facility and
            other financing opportunities, which committees shall include
            representatives of homebuilders, realtors, architects,
            nonprofit housing organizations, environmental protection
            organizations, renewable energy organizations, and advocacy
            organizations for the elderly and persons with disabilities;
            any advisory committees established pursuant to this paragraph
            shall not be subject to the Federal Advisory Committee Act (5
            U.S.C. App.);
                (3) approve, for a period not to exceed 10 years,
            additional adjustments in the maximum monthly rents or
            additional project rental assistance, or additional Indian
            housing block grant funds under the Native American Housing
            Assistance and Self-Determination Act of 1996, as applicable,
            for dwelling units in multifamily housing projects that are
            provided project-based rental assistance under a covered
            multifamily assistance program, in such amounts as may be
            necessary to amortize a portion of the cost of energy
            efficiency and conservation measures for such projects;
                (4) develop a competitive process for the award of such
            additional assistance for multifamily housing projects seeking
            to implement energy efficiency, renewable energy sources, or
            conservation measures; and
                (5) waive or modify any existing statutory or regulatory
            provision that would otherwise impair the implementation or
            effectiveness of the demonstration program under this section,
            including provisions relating to methods for rent adjustments,
            comparability standards, maximum rent schedules, and utility
            allowances; notwithstanding the preceding provisions of this
            paragraph, the Secretary may not waive any statutory
            requirement relating to fair housing, nondiscrimination, labor
            standards, or the environment, except pursuant to existing
            authority to waive nonstatutory environmental and other
            applicable requirements.
        (d) Requirement.--During the 4-year period beginning 12 months
    after the date of the enactment of this Act, the Secretary shall carry
    out demonstration programs under this section with respect to not fewer
    than 50,000 dwelling units.
        (e) Selection.--
                (1) Scope.--In order to provide a broad and representative
            profile for use in designing a program which can become
            operational and effective nationwide, the Secretary shall carry
            out the demonstration program under this section with respect
            to dwelling units located in a wide variety of geographic areas
            and project types assisted by the various covered multifamily
            assistance programs and using a variety of energy efficiency
            and conservation and funding techniques to reflect differences
            in climate, types of dwelling units and technical and
            scientific methodologies, and financing options. The Secretary
            shall ensure that the geographic areas included in the
            demonstration program include dwelling units on Indian lands
            (as such term is defined in section 2601 of the Energy Policy
            Act of 1992 (25 U.S.C. 3501), to the extent that dwelling units
            on Indian land have the type of residential structures that are
            the focus of the demonstration program.
                (2) Priority.--The Secretary shall provide priority for
            selection for participation in the program under this section
            based on the extent to which, as a result of assistance
            provided, the project will comply with the energy efficiency
            standards under subsection (a), (b), or (c) of section 284 of
            this subtitle.
        (f) Use of Existing Partnerships.--To the extent feasible, the
    Secretary shall--
                (1) utilize the Partnership for Advancing Technology in
            Housing of the Department of Housing and Urban Development to
            assist in carrying out the requirements of this section and to
            provide education and outreach regarding the demonstration
            program authorized under this section; and
                (2) consult with the Secretary of Energy, the Administrator
            of the Environmental Protection Agency, and the Secretary of
            the Army regarding utilizing the Building America Program of
            the Department of Energy, the Energy Star Program, and the Army
            Corps of Engineers, respectively, to determine the manner in
            which they might assist in carrying out the goals of this
            section and providing education and outreach regarding the
            demonstration program authorized under this section.
        (g) Limitation.--No amounts made available under the American
    Recovery and Reinvestment Act of 2009 (Public Law 111-5) may be used to
    carry out the demonstration program under this section.
        (h) Reports.--
                (1) Annual.--Not later than the expiration of the 2-year
            beginning upon the date of the enactment of this Act, and for
            each year thereafter during the term of the demonstration
            program, the Secretary shall submit a report to the Congress
            annually that describes and assesses the demonstration program
            under this section.
                (2) Final.--Not later than 6 months after the expiration of
            the 4-year period described in subsection (d), the Secretary
            shall submit a final report to the Congress assessing the
            demonstration program, which--
                        (A) shall assess the potential for expanding the
                    demonstration program on a nationwide basis; and
                        (B) shall include descriptions of--
                                (i) the size of each multifamily housing
                            project for which assistance was provided under
                            the program;
                                (ii) the geographic location of each
                            project assisted, by State and region;
                                (iii) the criteria used to select the
                            projects for which assistance is provided under
                            the program;
                                (iv) the energy efficiency and conservation
                            measures and financing sources used for each
                            project that is assisted under the program;
                                (v) the difference, before and during
                            participation in the demonstration program, in
                            the amount of the monthly assistance payments
                            under the covered multifamily assistance
                            program for each project assisted under the
                            program;
                                (vi) the average length of the term of the
                            such assistance provided under the program for
                            a project;
                                (vii) the aggregate amount of savings
                            generated by the demonstration program and the
                            amount of savings expected to be generated by
                            the program over time on a per-unit and
                            aggregate program basis;
                                (viii) the functions performed in
                            connection with the implementation of the
                            demonstration program that were transferred or
                            contracted out to any third parties;
                                (ix) an evaluation of the overall successes
                            and failures of the demonstration program; and
                                (x) recommendations for any actions to be
                            taken as a result of the such successes and
                            failures.
                (3) Contents.--Each annual report pursuant to paragraph (1)
            and the final report pursuant to paragraph (2) shall include--
                        (A) a description of the status of each multifamily
                    housing project selected for participation in the
                    demonstration program under this section; and
                        (B) findings from the program and recommendations
                    for any legislative actions.
        (i) Covered Multifamily Assistance Program.--For purposes of this
    section, the term ``covered multifamily assistance program'' means--
                (1) the program under section 8 of the United States
            Housing Act of 1937 (42 U.S.C. 1437f) for project-based rental
            assistance;
                (2) the program under section 202 of the Housing Act of
            1959 (12 U.S.C. 1701q) for assistance for supportive housing
            for the elderly;
                (3) the program under section 811 of the Cranston-Gonzalez
            National Affordable Housing Act (42 U.S.C. 8013) for supportive
            housing for persons with disabilities;
                (4) the program under section 236 of the National Housing
            Act (12 U.S.C. 1715z-1 for assistance for rental housing
            projects;
                (5) the program under section 515 of the Housing Act of
            1949 (42 U.S.C. 1485) for rural rental housing; and
                (6) the program for assistance under the Native American
            Housing Assistance and Self-Determination Act of 1996 (25
            U.S.C. 4111).
        (j) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section, including providing rent
    adjustments, additional project rental assistance, and incentives,
    $50,000,000 for each fiscal year in which the demonstration program
    under this section is carried out.
        (k) Regulations.--Not later than the expiration of the 180-day
    period beginning on the date of the enactment of this Act, the
    Secretary shall issue any regulations necessary to carry out this
    section.

    SEC. 286. ADDITIONAL CREDIT FOR FANNIE MAE AND FREDDIE MAC HOUSING
                  GOALS FOR ENERGY-EFFICIENT AND LOCATION-EFFICIENT
                  MORTGAGES.

        Section 1336(a) of the Housing and Community Development Act of
    1992 (12 U.S.C. 4566(a)), as amended by the Federal Housing Finance
    Regulatory Reform Act of 2008 (Public Law 110-289; 122 Stat. 2654), is
    amended--
                (1) in paragraph (2), by striking ``paragraph (5)'' and
            inserting ``paragraphs (5) and (6)''; and
                (2) by adding at the end the following new paragraph:
                ``(6) Additional credit.--
                        ``(A) In general.--In assigning credit toward
                    achievement under this section of the housing goals for
                    mortgage purchase activities of the enterprises, the
                    Director shall assign--
                                ``(i) more than 125 percent credit, for any
                            such purchase that both--
                                        ``(I) complies with the
                                    requirements of such goals; and
                                        ``(II)(aa) supports housing that
                                    meets the energy efficiency standards
                                    under section 284(a) of the Green
                                    Resources for Energy Efficient
                                    Neighborhoods Act of 2009; or
                                        ``(bb) is a location-efficient
                                    mortgage, as such term is defined in
                                    section 1335(e); and
                                ``(ii) credit in addition to credit under
                            clause (i), for any such purchase that both--
                                        ``(I) complies with the
                                    requirements of such goals, and
                                        ``(II) supports housing that
                                    complies with the enhanced energy
                                    efficiency and conservation standards,
                                    or the green building standards, under
                                    section 284(b) of such Act, or both,
                            and such additional credit shall be given based
                            on the extent to which the housing supported
                            with such purchases complies with such
                            standards.
                        ``(B) Treatment of additional credit.--The
                    availability of additional credit under this paragraph
                    shall not be used to increase any housing goal,
                    subgoal, or target established under this subpart.''.

    SEC. 287. DUTY TO SERVE UNDERSERVED MARKETS FOR ENERGY-EFFICIENT AND
                  LOCATION-EFFICIENT MORTGAGES.

        Section 1335 of Federal Housing Enterprises Financial Safety and
    Soundness Act of 1992 (12 U.S.C. 4565), as amended by the Federal
    Housing Finance Regulatory Reform Act of 2008 (Public Law 110-289; 122
    Stat. 2654), is amended--
                (1) in subsection (a)(1), by adding at the end the
            following new subparagraph:
                        ``(D) Markets for energy-efficient and location-
                    efficient mortgages.--
                                ``(i) Duty.--Subject to clause (ii), the
                            enterprise shall develop loan products and
                            flexible underwriting guidelines to facilitate
                            a secondary market for energy-efficient and
                            location-efficient mortgages on housing for
                            very low-, low-, and moderate-income families,
                            and for second and junior mortgages made for
                            purposes of energy efficiency or renewable
                            energy improvements, or both.
                                ``(ii) Authority to suspend.--
                            Notwithstanding any other provision of this
                            section, the Director may suspend the
                            applicability of the requirement under clause
                            (i) with respect to an enterprise, for such
                            period as is necessary, if the Director
                            determines that exigent circumstances exist and
                            such suspension is appropriate to ensure the
                            safety and soundness of the portfolio holdings
                            of the enterprise.'';
                (2) by adding at the end the following new subsection:
        ``(e) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Energy-efficient mortgage.--The term `energy-
            efficient mortgage' means a mortgage loan under which the
            income of the borrower, for purposes of qualification for such
            loan, is considered to be increased by not less than $1 for
            each $1 of savings projected to be realized by the borrower as
            a result of cost-effective energy-saving design, construction
            or improvements (including use of renewable energy sources,
            such as solar, geothermal, biomass, and wind, super-insulation,
            energy-saving windows, insulating glass and film, and radiant
            barrier) for the home for which the loan is made.
                ``(2) Location-efficient mortgage.--The term `location-
            efficient mortgage' means a mortgage loan under which--
                        ``(A) the income of the borrower, for purposes of
                    qualification for such loan, is considered to be
                    increased by not less than $1 for each $1 of savings
                    projected to be realized by the borrower because the
                    location of the home for which loan is made will result
                    in decreased transportation costs for the household of
                    the borrower; or
                        ``(B) the sum of the principal, interest, taxes,
                    and insurance due under the mortgage loan is decreased
                    by not less than $1 for each $1 of savings projected to
                    be realized by the borrower because the location of the
                    home for which loan is made will result in decreased
                    transportation costs for the household of the
                    borrower.''.

    SEC. 288. CONSIDERATION OF ENERGY EFFICIENCY UNDER FHA MORTGAGE
                  INSURANCE PROGRAMS AND NATIVE AMERICAN AND NATIVE
                  HAWAIIAN LOAN GUARANTEE PROGRAMS.

        (a) FHA Mortgage Insurance.--
                (1) Requirement.--Title V of the National Housing Act is
            amended by adding after section 542 (12 U.S.C. 1735f-20) the
            following new section:

    ``SEC. 543. CONSIDERATION OF ENERGY EFFICIENCY.

        ``(a) Underwriting Standards.--The Secretary shall establish a
    method to consider, in its underwriting standards for mortgages on
    single-family housing meeting the energy efficiency standards under
    section 284(a) of the Green Resources for Energy Efficient
    Neighborhoods Act of 2009 that are insured under this Act, the impact
    that savings on utility costs has on the income of the mortgagor.
        ``(b) Goal.--It is the sense of the Congress that, in carrying out
    this Act, the Secretary should endeavor to insure mortgages on single-
    family housing meeting the energy efficiency standards under section
    284(a) of the Green Resources for Energy Efficient Neighborhoods Act of
    2009 such that at least 50,000 such mortgages are insured during the
    period beginning upon the date of the enactment of such Act and ending
    on December 31, 2012.''.
                (2) Reporting on defaults.--Section 540(b) of the National
            Housing Act (12 U.S.C. 1735f-18(b)) is amended by adding at the
            end the following new paragraph:
                ``(3) With respect to each collection period that commences
            after December 31, 2011, the total number of mortgages on
            single-family housing meeting the energy efficiency standards
            under section 284(a) of the Green Resources for Energy
            Efficient Neighborhoods Act of 2009 that are insured by the
            Secretary during the applicable collection period, the number
            of defaults and foreclosures occurring on such mortgages during
            such period, the percentage of the total of such mortgages
            insured during such period on which defaults and foreclosure
            occurred, and the rate for such period of defaults and
            foreclosures on such mortgages compared to the overall rate for
            such period of defaults and foreclosures on mortgages for
            single-family housing insured under this Act by the
            Secretary.''.
        (b) Indian Housing Loan Guarantees.--
                (1) Requirement.--Section 184 of the Housing and Community
            Development Act of 1992 (12 U.S.C. 1715z-13a) is amended--
                        (A) by redesignating subsection (l) as subsection
                    (m); and
                        (B) by inserting after subsection (k) the following
                    new subsection:
        ``(l) Consideration of Energy Efficiency.--The Secretary shall
    establish a method to consider, in its underwriting standards for loans
    for single-family housing meeting the energy efficiency standards under
    section 284(a) of the Green Resources for Energy Efficient
    Neighborhoods Act of 2009 that are guaranteed under this section, the
    impact that savings on utility costs has on the income of the
    borrower.''.
                (2) Reporting on defaults.--Section 540(b) of the National
            Housing Act (12 U.S.C. 1735f-18(b)), as amended by subsection
            (a)(2) of this section, is further amended by adding at the end
            the following new paragraph:
                ``(4) With respect to each collection period that commences
            after December 31, 2011, the total number of loans guaranteed
            under section 184 of the Housing and Community Development Act
            of 1992 (12 U.S.C. 1715z-13a) on single-family housing meeting
            the energy efficiency standards under section 284(a) of the
            Green Resources for Energy Efficient Neighborhoods Act of 2009
            that are guaranteed by the Secretary during the applicable
            collection period, the number of defaults and foreclosures
            occurring on such loans during such period, the percentage of
            the total of such loans guaranteed during such period on which
            defaults and foreclosure occurred, and the rate for such period
            of defaults and foreclosures on such loans compared to the
            overall rate for such period of defaults and foreclosures on
            loans for single-family housing guaranteed under such section
            184 by the Secretary.''.
        (c) Native Hawaiian Housing Loan Guarantees.--
                (1) Requirement.--Section 184A of the Housing and Community
            Development Act of 1992 (12 U.S.C. 1715z-13b) is amended by
            inserting after subsection (l) the following new subsection:
        ``(m) Energy-efficient Housing Requirement.--The Secretary shall
    establish a method to consider, in its underwriting standards for loans
    for single-family housing meeting the energy efficiency standards under
    section 284(a) of the Green Resources for Energy Efficient
    Neighborhoods Act of 2009 that are guaranteed under this section, the
    impact that savings on utility costs has on the income of the
    borrower.''.
                (2) Reporting on defaults.--Section 540(b) of the National
            Housing Act (12 U.S.C. 1735f-18(b)), as amended by the
            preceding provisions of this section, is further amended by
            adding at the end the following new paragraph:
                ``(5) With respect to each collection period that commences
            after December 31, 2011, the total number of loans guaranteed
            under section 184A of the Housing and Community Development Act
            of 1992 (12 U.S.C. 1715z-13b) on single-family housing meeting
            the energy efficiency standards under section 284(a) of the
            Green Resources for Energy Efficient Neighborhoods Act of 2009
            that are guaranteed by the Secretary during the applicable
            collection period, the number of defaults and foreclosures
            occurring on such loans during such period, the percentage of
            the total of such loans guaranteed during such period on which
            defaults and foreclosure occurred, and the rate for such period
            of defaults and foreclosures on such loans compared to the
            overall rate for such period of defaults and foreclosures on
            loans for single-family housing guaranteed under such section
            184A by the Secretary.''.

    SEC. 289. ENERGY-EFFICIENT MORTGAGES AND LOCATION-EFFICIENT MORTGAGES
                  EDUCATION AND OUTREACH CAMPAIGN.

        Section 106 of the Energy Policy Act of 1992 (12 U.S.C. 1701z-16)
    is amended by adding at the end the following new subsection:
        ``(g) Education and Outreach Campaign.--
                ``(1) Development of energy- and location-efficient
            mortgages outreach program.--
                        ``(A) Commission.--The Secretary, in consultation
                    and coordination with the Secretary of Energy, the
                    Secretary of Education, the Secretary of Agriculture,
                    and the Administrator of the Environmental Protection
                    Agency, shall establish a commission to develop and
                    recommend model mortgage products and underwriting
                    guidelines that provide market-based incentives to
                    prospective home buyers, lenders, and sellers to
                    incorporate energy efficiency upgrades and location
                    efficiencies in new mortgage loan transactions.
                        ``(B) Report.--Not later than 24 months after the
                    date of the enactment of this Act, the Secretary shall
                    provide a written report to the Congress on the results
                    of work of the commission established pursuant to
                    subparagraph (A) and that identifies model mortgage
                    products and underwriting guidelines that may encourage
                    energy and location efficiency.
                ``(2) Implementation.--After submission of the report under
            paragraph (1)(B), the Secretary, in consultation and
            coordination with the Secretary of Energy, the Secretary of
            Education, and the Administrator of the Environmental
            Protection Agency, shall carry out a public awareness,
            education, and outreach campaign based on the findings of the
            commission established pursuant to paragraph (1) to inform and
            educate residential lenders and prospective borrowers regarding
            the availability, benefits, advantages, and terms of energy-
            efficient mortgages and location-efficient mortgages made
            available pursuant to this section, energy-efficient and
            location-efficient mortgages that meet the requirements of
            section 1335 of the Housing and Community Development Act of
            1992 (42 U.S.C. 4565), and other mortgages, including mortgages
            for multifamily housing, that have energy improvement features
            or location efficiency features and to publicize such
            availability, benefits, advantages, and terms. Such actions may
            include entering into a contract with an appropriate entity to
            publicize and market such mortgages through appropriate media.
                ``(3) Renewable energy home product expos.--The Congress
            hereby encourages the Secretary of Housing and Urban
            Development to work with appropriate entities to organize and
            hold renewable energy expositions that provide an opportunity
            for the public to view and learn about renewable energy
            products for the home that are currently on the market.
                ``(4) Authorization of appropriations.--There is authorized
            to be appropriated to the Secretary to carry out this
            subsection $5,000,000 for each of fiscal years 2010 through
            2014.''.

    SEC. 290. COLLECTION OF INFORMATION ON ENERGY-EFFICIENT AND LOCATION-
                  EFFICIENT MORTGAGES THROUGH HOME MORTGAGE DISCLOSURE ACT.

        (a) In General.--Section 304(b) of the Home Mortgage Disclosure Act
    of 1975 (12 U.S.C. 2803(b)) is amended--
                (1) in paragraph (3), by striking ``and'' at the end;
                (2) in paragraph (4), by striking the period at the end and
            inserting a semicolon; and
                (3) by adding at the end the following new paragraphs:
                ``(5) the number and dollar amount of mortgage loans for
            single-family housing and for multifamily housing that are
            energy-efficient mortgages (as such term is defined in section
            1335 of Housing and Community Development Act of 1992); and
                ``(6) the number and dollar amount of mortgage loans for
            single-family housing and for multifamily housing that are
            location-efficient mortgages (as such term is defined in
            section 1335 of Housing and Community Development Act of
            1992).''.
        (b) Applicability.--The amendment made by subsection (a) shall
    apply with respect to the first calendar year that begins after the
    expiration of the 30-day period beginning on the date of the enactment
    of this Act.

    SEC. 291. ENSURING AVAILABILITY OF HOMEOWNERS INSURANCE FOR HOMES NOT
                  CONNECTED TO ELECTRICITY GRID.

        (a) Congressional Intent.--The Congress intends that--
                (1) consumers shall not be denied homeowners insurance for
            a dwelling (as such term is defined in subsection (c)) based
            solely on the fact that the dwelling is not connected to or
            able to receive electricity service from any wholesale or
            retail electric power provider;
                (2) States should ensure that consumers are able to obtain
            homeowners insurance for such dwellings;
                (3) States should support insurers that develop voluntary
            incentives to provide such insurance; and
                (4) States may not prohibit insurers from offering a
            homeowners insurance product specifically designed for such
            dwellings.
        (b) Insuring Homes and Related Property in Indian Areas.--
    Notwithstanding any other provision of law, dwellings located in Indian
    areas (as such term is defined in section 4 of the Native American
    Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103))
    and constructed or maintained using assistance, loan guarantees, or
    other authority under the Native American Housing Assistance and Self-
    Determination Act of 1996 may be insured by any tribally owned self-
    insurance risk pool approved by the Secretary of Housing and Urban
    Development.
        (c) Dwelling.--For purposes of this section, the term ``dwelling''
    means a residential structure that--
                (1) consists of one to four dwelling units;
                (2) is provided electricity from renewable energy sources;
            and
                (3) is not connected to any wholesale or retail electrical
            power grid.

    SEC. 292. MORTGAGE INCENTIVES FOR ENERGY-EFFICIENT MULTIFAMILY HOUSING.

        (a) In General.--The Secretary of Housing and Urban Development
    shall establish incentives for increasing the energy efficiency of
    multifamily housing that is subject to a mortgage to be insured under
    title II of the National Housing Act (12 U.S.C. 1707 et seq.) so that
    the housing meets the energy efficiency standards under section 284(a)
    of this subtitle and incentives to encourage compliance of such housing
    with the energy efficiency and conservation standards, and the green
    building standards, under section 284(b) of this subtitle, to the
    extent that such incentives are based on the impact that savings on
    utility costs has on the operating costs of the housing, as determined
    by the Secretary.
        (b) Incentives.--Such incentives may include, for any such
    multifamily housing that complies with the energy efficiency standards
    under section 284(a)--
                (1) providing a discount on the chargeable premiums for the
            mortgage insurance for such housing from the amount otherwise
            chargeable for such mortgage insurance;
                (2) allowing mortgages to exceed the dollar amount limits
            otherwise applicable under law to the extent such additional
            amounts are used to finance improvements or measures designed
            to meet the standards referred to in subsection (a); and
                (3) reducing the amount that the owner of such multifamily
            housing meeting the standards referred to in subsection (a) is
            required to contribute.

    SEC. 293. ENERGY-EFFICIENT CERTIFICATIONS FOR MANUFACTURED HOUSING WITH
                  MORTGAGES.

        Section 526 of the National Housing Act (12 U.S.C. 1735f-4(a)) is
    amended--
                (1) in subsection (a)--
                        (A) by striking ``, other than manufactured
                    homes,'' each place such term appears;
                        (B) by inserting after the period at the end the
                    following: ``The energy performance requirements
                    developed and established by the Secretary under this
                    section for manufactured homes shall require energy
                    star rating for wall fixtures, appliances, and
                    equipment in such housing.'';
                        (C) by inserting ``(1)'' after ``(a)''; and
                        (D) by adding at the end the following new
                    paragraphs:
        ``(2) The Secretary shall require, with respect to any single- or
    multi-family residential housing subject to a mortgage insured under
    this Act, that any approval or certification of the housing for meeting
    any energy efficiency or conservation criteria, standards, or
    requirements pursuant to this title and any approval or certification
    required pursuant to this title with respect to energy-conserving
    improvements or any renewable energy sources, such as wind, solar
    energy geothermal, or biomass, shall be conducted only by an individual
    certified by a home energy rating system provider who has been
    accredited to conduct such ratings by the Home Energy Ratings System
    Council, the Residential Energy Services Network, or such other
    appropriate national organization, as the Secretary may provide, or by
    licensed professional architect or engineer. If any organization makes
    a request to the Secretary for approval to accredit individuals to
    conduct energy efficiency or conservation ratings, the Secretary shall
    review and approve or disapprove such request not later than the
    expiration of the 6-month period beginning upon receipt of such
    request.
        ``(3) The Secretary shall periodically examine the method used to
    conduct inspections for compliance with the requirements under this
    section, analyze various other approaches for conducting such
    inspections, and review the costs and benefits of the current method
    compared with other methods.''; and
                (2) in subsection (b), by striking ``, other than a
            manufactured home,''.

    SEC. 294. ASSISTED HOUSING ENERGY LOAN PILOT PROGRAM.

        (a) Authority.--Not later than the expiration of the 12-month
    period beginning on the date of the enactment of this Act, the
    Secretary shall develop and implement a pilot program under this
    section to facilitate the financing of cost-effective capital
    improvements for covered assisted housing projects to improve the
    energy efficiency and conservation of such projects.
        (b) Loans.--The pilot program under this section shall involve not
    less than three and not more than five lenders, and shall provide for a
    privately financed loan to be made for a covered assisted housing
    project, which shall--
                (1) finance capital improvements for the project that meet
            such requirements as the Secretary shall establish, and may
            involve contracts with third parties to perform such capital
            improvements, including the design of such improvements by
            licensed professional architects or engineers;
                (2) have a term to maturity of not more than 20 years,
            which shall be based upon the duration necessary to realize
            cost savings sufficient to repay the loan;
                (3) be secured by a mortgage subordinate to the mortgage
            for the project that is insured under the National Housing Act;
            and
                (4) provide for a reduction in the remaining principal
            obligation under the loan based on the actual resulting cost
            savings realized from the capital improvements financed with
            the loan.
        (c) Underwriting Standards.--The Secretary shall establish
    underwriting requirements for loans made under the pilot program under
    this section, which shall--
                (1) require the cost savings projected to be realized from
            the capital improvements financed with the loan, during the
            term of the loan, to exceed the costs of repaying the loan;
                (2) allow the designer or contractor involved in designing
            capital improvements to be financed with a loan under the
            program to carry out such capital improvements; and
                (3) include such energy, audit, property, financial,
            ownership, and approval requirements as the Secretary considers
            appropriate.
        (d) Treatment of Savings.--The pilot program under this section
    shall provide that the project owner shall receive the full financial
    benefit from any reduction in the cost of utilities resulting from
    capital improvements financed with a loan made under the program.
        (e) Covered Assisted Housing Projects.--For purposes of this
    section, the term ``covered assisted housing project'' means a housing
    project that--
                (1) is financed by a loan or mortgage that is--
                        (A) insured by the Secretary under--
                                (i) subsection (d)(3) of section 221 of the
                            National Housing Act (12 U.S.C. 1715l), and
                            bears interest at a rate determined under the
                            proviso of section 221(d)(5) of such Act; or
                                (ii) subsection (d)(4) of such section 221.
                        (B) insured or assisted under section 236 of the
                    National Housing Act (12 U.S.C. 1715z-1);
                (2) at the time a loan under this section is made, is
            provided project-based rental assistance under section 8 of the
            United States Housing Act of 1937 (42 U.S.C. 1437f) for 50
            percent or more of the dwelling units in the project; and
                (3) is not a housing project owned or held by the
            Secretary, or subject to a mortgage held by the Secretary.

    SEC. 295. MAKING IT GREEN.

        (a) Partnerships With Tree-planting Organizations.--The Secretary
    shall establish and provide incentives for developers of housing for
    which any HUD financial assistance, as determined by the Secretary, is
    provided for development, maintenance, operation, or other costs, to
    enter into agreements and partnerships with tree-planting
    organizations, nurseries, and landscapers to certify that trees,
    shrubs, grasses, and other plants are planted in the proper manner, are
    provided adequate maintenance, and survive for at least 3 years after
    planting or are replaced. The financial assistance determined by the
    Secretary as eligible under this section shall take into consideration
    such factors as cost effectiveness and affordability.
        (b) Making It Green Plan.--In the case of any new or substantially
    rehabilitated housing for which HUD financial assistance, as determined
    in accordance with subsection (a), is provided by the Secretary for the
    development, construction, maintenance, rehabilitation, improvement,
    operation, or costs of the housing, including financial assistance
    provided through the Community Development Block Grant program under
    title I of the Housing and Community Development Act of 1974 (42 U.S.C.
    5301 et seq.), the Secretary shall require the development of a plan
    that provides for--
                (1) in the case of new construction and improvements,
            siting of such housing and improvements in a manner that
            provides for energy efficiency and conservation to the extent
            feasible, taking into consideration location and project type;
                (2) minimization of the effects of construction,
            rehabilitation, or other development on the condition of
            existing trees;
                (3) selection and installation of indigenous trees, shrubs,
            grasses, and other plants based upon applicable design
            guidelines and standards of the International Society for
            Arboriculture;
                (4) post-planting care and maintenance of the landscaping
            relating to or affected by the housing in accordance with best
            management practices; and
                (5) establishment of a goal for minimum greenspace or tree
            canopy cover for the housing site for which such financial
            assistance is provided, including guidelines and timetables
            within which to achieve compliance with such minimum
            requirements.
        (c) Partnerships.--In carrying out this section, the Secretary is
    encouraged to consult, as appropriate, with national organizations
    dedicated to providing housing assistance and related services to low-
    income families, such as the Alliance for Community Trees and its
    affiliates, the American Nursery and Landscape Association, the
    American Society of Landscape Architects, and the National Arbor Day
    Foundation.

    SEC. 296. RESIDENTIAL ENERGY EFFICIENCY BLOCK GRANT PROGRAM.

        Title I of the Housing and Community Development Act of 1974 (42
    U.S.C. 5301 et seq.) is amended by adding at the end the following new
    section:

    ``SEC. 123. RESIDENTIAL ENERGY EFFICIENCY BLOCK GRANT PROGRAM.

        ``(a) In General.--To the extent amounts are made available for
    grants under this section, the Secretary shall make grants under this
    section to States, metropolitan cities and urban counties, Indian
    tribes, and insular areas to carry out energy efficiency improvements
    in new and existing single-family and multifamily housing.
        ``(b) Allocations.--
                ``(1) In general.--Of the total amount made available for
            each fiscal year for grants under this section that remains
            after reserving amounts pursuant to paragraph (2), the
            Secretary shall allocate for insular areas, for metropolitan
            cities and urban counties, and for States, an amount that bears
            the same ratio to such total amount as the amount allocated for
            such fiscal year under section 106 for Indian tribes, for
            insular areas, for metropolitan cities and urban counties, and
            for States, respectively, bears to the total amount made
            available for such fiscal year for grants under section 106.
                ``(2) Set aside for indian tribes.--Of the total amount
            made available for each fiscal year for grants under this
            section, the Secretary shall allocate not less than 1 percent
            to Indian tribes.
        ``(c) Grant Amounts.--
                ``(1) Entitlement communities.--From the amounts allocated
            pursuant to subsection (b) for metropolitan cities and urban
            counties for each fiscal year, the Secretary shall make a grant
            for such fiscal year to each metropolitan city and urban county
            that complies with the requirement under subsection (d), in the
            amount that bears the same ratio such total amount so allocated
            as the amount of the grant for such fiscal year under section
            106 for such metropolitan city or urban county bears to the
            aggregate amount of all grants for such fiscal year under
            section 106 for all metropolitan cities and urban counties.
                ``(2) States.--From the amounts allocated pursuant to
            subsection (b) for States for each fiscal year, the Secretary
            shall make a grant for such fiscal year to each State that
            complies with the requirement under subsection (d), in the
            amount that bears the same ratio such total amount so allocated
            as the amount of the grant for such fiscal year under section
            106 for such State bears to the aggregate amount of all grants
            for such fiscal year under section 106 for all States. Grant
            amounts received by a State shall be used only for eligible
            activities under subsection (e) carried out in nonentitlement
            areas of the State.
                ``(3) Indian tribes.--From the amounts allocated pursuant
            to subsection (b) for Indian tribes, the Secretary shall make
            grants to Indian tribes that comply with the requirement under
            subsection (d) on the basis of a competition conducted pursuant
            to specific criteria, as the Secretary shall establish by
            regulation, for the selection of Indian tribes to receive such
            amount.
                ``(4) Insular areas.--From the amounts allocated pursuant
            to subsection (b) for insular areas, the Secretary shall make a
            grant to each insular area that complies with the requirement
            under subsection (d) on the basis of the ratio of the
            population of the insular area to the aggregate population of
            all insular areas. In determining the distribution of amounts
            to insular areas, the Secretary may also include other
            statistical criteria as data become available from the Bureau
            of Census of the Department of Labor, but only if such criteria
            are set forth by regulation issued after notice and an
            opportunity for comment.
        ``(d) Statement of Activities.--
                ``(1) Requirement.--Before receipt the receipt in any
            fiscal year of a grant under subsection (c) by any grantee, the
            grantee shall have prepared a final statement of housing energy
            efficiency objectives and projected use of funds as the
            Secretary shall require and shall have provided the Secretary
            with such certifications regarding such objectives and use as
            the Secretary may require. In the case of metropolitan cities,
            urban counties, units of general local government, and insular
            areas receiving grants, the statement of projected use of funds
            shall consist of proposed housing energy efficiency activities.
            In the case of States receiving grants, the statement of
            projected use of funds shall consist of the method by which the
            States will distribute funds to units of general local
            government.
                ``(2) Public participation.--The Secretary may establish
            requirements to ensure the public availability of information
            regarding projected use of grant amounts and public
            participation in determining such projected use.
        ``(e) Eligible Activities.--
                ``(1) Requirement.--Amounts from a grant under this section
            may be used only to carry out activities for single-family or
            multifamily housing that are designed to improve the energy
            efficiency of the housing so that the housing complies with the
            energy efficiency standards under section 284(a) of the Green
            Resources for Energy Efficient Neighborhoods Act of 2009,
            including such activities to provide energy for such housing
            from renewable sources, such as wind, waves, solar, biomass,
            and geothermal sources.
                ``(2) Preference for compliance beyond basic
            requirements.--In selecting activities to be funded with
            amounts from a grant under this section, a grantee shall give
            more preference to activities based on the extent to which the
            activities will result in compliance by the housing with the
            enhanced energy efficiency and conservation standards, and the
            green building standards, under section 284(b) of such Act.
        ``(f) Reports.--Each grantee of a grant under this section for a
    fiscal year shall submit to the Secretary, at a time determined by the
    Secretary, a performance and evaluation report concerning the use of
    grant amounts, which shall contain an assessment by the grantee of the
    relationship of such use to the objectives identified in the grantees
    statement under subsection (d).
        ``(g) Applicability of CDBG Provisions.--Sections 109, 110, and 111
    of the Housing and Community Development Act of 1974 (42 U.S.C. 5309,
    5310, 5311) shall apply to assistance received under this section to
    the same extent and in the same manner that such sections apply to
    assistance received under title I of such Act.
        ``(h) Authorization of Appropriations.--There is authorized to be
    appropriated for grants under this section $2,500,000,000 for fiscal
    year 2010 and such sums as may be necessary for each fiscal year
    thereafter.''.

    SEC. 297. INCLUDING SUSTAINABLE DEVELOPMENT AND TRANSPORTATION
                  STRATEGIES IN COMPREHENSIVE HOUSING AFFORDABILITY
                  STRATEGIES.

        Section 105(b) of the Cranston-Gonzalez National Affordable Housing
    Act (42 U.S.C. 12705(b)) is amended--
                (1) by striking ``and'' at the end of paragraph (19);
                (2) by striking the period at the end of paragraph (20) and
            inserting ``; and'';
                (3) and by inserting after paragraph (20) the following new
            paragraphs:
                ``(21) describe the jurisdiction's strategies to encourage
            sustainable development for affordable housing, including
            single-family and multifamily housing, as measured by--
                        ``(A) greater energy efficiency and use of
                    renewable energy sources, including any strategies
                    regarding compliance with the energy efficiency
                    standards under section 284(a) of the Green Resources
                    for Energy Efficient Neighborhoods Act of 2009 and with
                    the enhanced energy efficiency and conservation
                    standards, and the green building standards, under
                    section 284(b) of such Act;
                        ``(B) increased conservation, recycling, and reuse
                    of resources;
                        ``(C) more effective use of existing
                    infrastructure;
                        ``(D) use of building materials and methods that
                    are healthier for residents of the housing, including
                    use of building materials that are free of added known
                    carcinogens that are classified as Group 1 Known
                    Carcinogens by the International Agency for Research on
                    Cancer; and
                        ``(E) such other criteria as the Secretary
                    determines, in consultation with the Secretary of
                    Energy, the Secretary of Agriculture, and the
                    Administrator of the Environmental Protection Agency,
                    are in accordance with the purposes of this paragraph;
                    and
                ``(22) describe the jurisdiction's efforts to coordinate
            its housing strategy with its transportation planning
            strategies to ensure to the extent practicable that residents
            of affordable housing have access to public transportation.''.

    SEC. 298. GRANT PROGRAM TO INCREASE SUSTAINABLE LOW-INCOME COMMUNITY
                  DEVELOPMENT CAPACITY.

        (a) In General.--The Secretary may make grants to nonprofit
    organizations to use for any of the following purposes:
                (1) Training, educating, supporting, or advising an
            eligible community development organization or qualified youth
            service and conservation corps in improving energy efficiency,
            resource conservation and reuse, design strategies to maximize
            energy efficiency, installing or constructing renewable energy
            improvements (such as wind, wave, solar, biomass, and
            geothermal energy sources), and effective use of existing
            infrastructure in affordable housing and economic development
            activities in low-income communities, taking into consideration
            energy efficiency standards under section 284(a) of this
            subtitle and with the enhanced energy efficiency and
            conservation standards, and the green building standards, under
            section 284(b) of this subtitle.
                (2) Providing loans, grants, or predevelopment assistance
            to eligible community development organizations or qualified
            youth service and conservation corps to carry out energy
            efficiency improvements that comply with the energy efficiency
            standards under section 284(a) of this subtitle, resource
            conservation and reuse, and effective use of existing
            infrastructure in affordable housing and economic development
            activities in low-income communities. In providing assistance
            under this paragraph, the Secretary shall give more preference
            to activities based on the extent to which the activities will
            result in compliance with the enhanced energy efficiency and
            conservation standards, and the green building standards, under
            section 284(b) of this subtitle.
                (3) Such other purposes as the Secretary determines are in
            accordance with the purposes of this subsection.
        (b) Application Requirement.--To be eligible for a grant under this
    section, a nonprofit organization shall prepare and submit to the
    Secretary an application at such time, in such manner, and containing
    such information as the Secretary may require.
        (c) Award of Contracts.--Contracts for architectural or engineering
    services funded with amounts from grants made under this section shall
    be awarded in accordance with chapter 11 of title 40, United States
    Code (relating to selection of architects and engineers).
        (d) Matching Requirement.--A grant made under this section may not
    exceed the amount that the nonprofit organization receiving the grant
    certifies, to the Secretary, will be provided (in cash or in-kind) from
    nongovernmental sources to carry out the purposes for which the grant
    is made.
        (e) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) The term ``nonprofit organization'' has the meaning
            given such term in section 104 of the Cranston-Gonzalez
            National Affordable Housing Act (42 U.S.C. 12704).
                (2) The term ``eligible community development
            organization'' means--
                        (A) a unit of general local government (as defined
                    in section 104 of the Cranston-Gonzalez National
                    Affordable Housing Act (42 U.S.C. 12704));
                        (B) a community housing development organization
                    (as defined in section 104 of the Cranston-Gonzalez
                    National Affordable Housing Act (42 U.S.C. 12704));
                        (C) an Indian tribe or tribally designated housing
                    entity (as such terms are defined in section 4 of the
                    Native American Housing Assistance and Self-
                    Determination Act of 1996 (25 U.S.C. 4103)); or
                        (D) a public housing agency, as such term is
                    defined in section 3(b) of the United States Housing
                    Act of 1937 (42 U.S.C. 1437(b)).
                (3) The term ``low-income community'' means a census tract
            in which 50 percent or more of the households have an income
            which is less than 80 percent of the greater of--
                        (A) the median gross income for such year for the
                    area in which such census tract is located; or
                        (B) the median gross income for such year for the
                    State in which such census tract is located.
        (f) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary to carry out this section $10,000,000 for
    each of fiscal years 2010 through 2014.

    SEC. 299. HOPE VI GREEN DEVELOPMENTS REQUIREMENT.

        (a) Mandatory Component.--Section 24(e) of the United States
    Housing Act of 1937 (42 U.S.C. 1437v(e)) is amended by adding at the
    end the following new paragraph:
                ``(4) Green developments requirement.--
                        ``(A) Requirement.--The Secretary may not make a
                    grant under this section to an applicant unless the
                    proposed revitalization plan of the applicant to be
                    carried out with such grant amounts meets the following
                    requirements:
                                ``(i) Green communities criteria
                            checklist.--All residential construction under
                            the proposed plan complies with the national
                            Green Communities criteria checklist for
                            residential construction that provides criteria
                            for the design, development, and operation of
                            affordable housing, as such checklist is in
                            effect for purposes of this paragraph pursuant
                            to subparagraph (D) at the date of the
                            application for the grant, or any substantially
                            equivalent standard or standards as determined
                            by the Secretary, as follows:
                                        ``(I) The proposed plan shall
                                    comply with all items of the national
                                    Green Communities criteria checklist
                                    for residential construction that are
                                    identified as mandatory.
                                        ``(II) The proposed plan shall
                                    comply with such other nonmandatory
                                    items of such national Green
                                    Communities criteria checklist so as to
                                    result in a cumulative number of points
                                    attributable to such nonmandatory items
                                    under such checklist of not less than--
                                                ``(aa) 25 points, in the
                                            case of any proposed plan (or
                                            portion thereof) consisting of
                                            new construction; and
                                                ``(bb) 20 points, in the
                                            case of any proposed plan (or
                                            portion thereof) consisting of
                                            rehabilitation.
                                ``(ii) Green buildings certification
                            system.--All nonresidential construction under
                            the proposed plan complies with all minimum
                            required levels of the green building rating
                            systems and levels identified by the Secretary
                            pursuant to subparagraph (C), as such systems
                            and levels are in effect for purposes of this
                            paragraph pursuant to subparagraph (D) at the
                            time of the application for the grant.
                        ``(B) Verification.--
                                ``(i) In general.--The Secretary shall
                            verify, or provide for verification, sufficient
                            to ensure that each proposed revitalization
                            plan carried out with amounts from a grant
                            under this section complies with the
                            requirements under subparagraph (A) and that
                            the revitalization plan is carried out in
                            accordance with such requirements and plan.
                                ``(ii) Timing.--In providing for such
                            verification, the Secretary shall establish
                            procedures to ensure such compliance with
                            respect to each grantee, and shall report to
                            the Congress with respect to the compliance of
                            each grantee, at each of the following times:
                                        ``(I) Not later than 6 months after
                                    execution of the grant agreement under
                                    this section for the grantee.
                                        ``(II) Upon completion of the
                                    revitalization plan of the grantee.
                        ``(C) Identification of green buildings rating
                    systems and levels.--
                                ``(i) In general.--For purposes of this
                            paragraph, the Secretary shall identify rating
                            systems and levels for green buildings that the
                            Secretary determines to be the most likely to
                            encourage a comprehensive and environmentally
                            sound approach to ratings and standards for
                            green buildings. The identification of the
                            ratings systems and levels shall be based on
                            the criteria specified in clause (ii), shall
                            identify the highest levels the Secretary
                            determines are appropriate above the minimum
                            levels required under the systems selected.
                            Within 90 days of the completion of each study
                            required by clause (iii), the Secretary shall
                            review and update the rating systems and
                            levels, or identify alternative systems and
                            levels for purposes of this paragraph, taking
                            into account the conclusions of such study.
                                ``(ii) Criteria.--In identifying the green
                            rating systems and levels, the Secretary shall
                            take into consideration--
                                        ``(I) the ability and availability
                                    of assessors and auditors to
                                    independently verify the criteria and
                                    measurement of metrics at the scale
                                    necessary to implement this paragraph;
                                        ``(II) the ability of the
                                    applicable ratings system organizations
                                    to collect and reflect public comment;
                                        ``(III) the ability of the
                                    standards to be developed and revised
                                    through a consensus-based process;
                                        ``(IV) An evaluation of the
                                    robustness of the criteria for a high-
                                    performance green building, which shall
                                    give credit for promoting--
                                                ``(aa) efficient and
                                            sustainable use of water,
                                            energy, and other natural
                                            resources;
                                                ``(bb) use of renewable
                                            energy sources;
                                                ``(cc) improved indoor and
                                            outdoor environmental quality
                                            through enhanced indoor and
                                            outdoor air quality, thermal
                                            comfort, acoustics, outdoor
                                            noise pollution, day lighting,
                                            pollutant source control,
                                            sustainable landscaping, and
                                            use of building system controls
                                            and low- or no-emission
                                            materials, including preference
                                            for materials with no added
                                            carcinogens that are classified
                                            as Group 1 Known Carcinogens by
                                            the International Agency for
                                            Research on Cancer; and
                                                ``(dd) such other criteria
                                            as the Secretary determines to
                                            be appropriate; and
                                        ``(V) national recognition within
                                    the building industry.
                                ``(iii) 5-year evaluation.--At least once
                            every 5 years, the Secretary shall conduct a
                            study to evaluate and compare available third-
                            party green building rating systems and levels,
                            taking into account the criteria listed in
                            clause (ii).
                        ``(D) Applicability and updating of standards.--
                                ``(i) Applicability.--Except as provided in
                            clause (ii) of this subparagraph, the national
                            Green Communities criteria checklist and green
                            building rating systems and levels referred to
                            in clauses (i) and (ii) of subparagraph (A)
                            that are in effect for purposes of this
                            paragraph are such checklist systems, and
                            levels as in existence upon the date of the
                            enactment of the Green Resources for Energy
                            Efficient Neighborhoods Act of 2009.
                                ``(ii) Updating.--The Secretary may, by
                            regulation, adopt and apply, for purposes of
                            this paragraph, future amendments and
                            supplements to, and editions of, the national
                            Green Communities criteria checklist, any
                            standard or standards that the Secretary has
                            determined to be substantially equivalent to
                            such checklist, and the green building ratings
                            systems and levels identified by the Secretary
                            pursuant to subparagraph (C).''.
        (b) Selection Criteria; Graded Component.--Section 24(e)(2) of the
    United States Housing Act of 1937 (42 U.S.C. 1437v(e)(2)) is amended--
                (1) in subparagraph (K), by striking ``and'' at the end;
                (2) by redesignating subparagraph (L) as subparagraph (M);
            and
                (3) by inserting after subparagraph (K) the following new
            subparagraph:
                        ``(L) the extent to which the proposed
                    revitalization plan--
                                ``(i) in the case of residential
                            construction, complies with the nonmandatory
                            items of the national Green Communities
                            criteria checklist identified in paragraph
                            (4)(A)(i), or any substantially equivalent
                            standard or standards as determined by the
                            Secretary, but only to the extent such
                            compliance exceeds the compliance necessary to
                            accumulate the number of points required under
                            such paragraph; and
                                ``(ii) in the case of nonresidential
                            construction, complies with the components of
                            the green building rating systems and levels
                            identified by the Secretary pursuant to
                            paragraph (4)(C), but only to the extent such
                            compliance exceeds the minimum level required
                            under such systems and levels; and''.

    SEC. 299A. CONSIDERATION OF ENERGY EFFICIENCY IMPROVEMENTS IN
                  APPRAISALS.

        (a) Appraisals in Connection With Federally Related Transactions.--
                (1) Requirement.--Section 1110 of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 3339) is amended--
                        (A) in paragraph (1), by striking ``and'' at the
                    end;
                        (B) by redesignating paragraph (2) as paragraph
                    (3); and
                        (C) by inserting after paragraph (1) the following
                    new paragraph:
                ``(2) that such appraisals be performed in accordance with
            appraisal standards that require, in determining the value of a
            property, consideration of any renewable energy sources for, or
            energy efficiency or energy-conserving improvements or features
            of, the property; and''.
                (2) Revision of appraisal standards.--Each Federal
            financial institutions regulatory agency shall, not later than
            6 months after the date of the enactment of this Act, revise
            its standards for the performance of real estate appraisals in
            connection with federally related transactions under the
            jurisdiction of the agency to comply with the requirement under
            the amendments made by paragraph (1) of this subsection.
        (b) Appraiser Certification and Licensing Requirements.--Section
    1116 of the Financial Institutions Reform, Recovery, and Enforcement
    Act of 1989 (12 U.S.C. 3345) is amended--
                (1) in subsection (a), by inserting before the period at
            the end the following: ``, and meets the requirements
            established pursuant to subsection (f) for qualifications
            regarding consideration of any renewable energy sources for, or
            energy efficiency or energy-conserving improvements or features
            of, the property'';
                (2) in subsection (c), by inserting before the period at
            the end the following: ``, which shall include compliance with
            the requirements established pursuant to subsection (f)
            regarding consideration of any renewable energy sources for, or
            energy efficiency or energy-conserving improvements or features
            of, the property'';
                (3) in subsection (e), by striking ``The'' and inserting
            ``Except as provided in subsection (f), the''; and
                (4) by adding at the end the following new subsection:
        ``(f) Requirements for Appraisers Regarding Energy Efficiency
    Features.--The Appraisal Subcommittee shall establish requirements for
    State certification of State certified real estate appraisers and for
    State licensing of State licensed appraisers, to ensure that appraisers
    consider and are qualified to consider, in determining the value of a
    property, any renewable energy sources for, or energy efficiency or
    energy-conserving improvements or features of, the property.''.
        (c) Guidelines for Appraising Photovoltaic Measures and Training of
    Appraisers.--Section 1122 of the Financial Institutions Reform,
    Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended by
    adding at the end the following new subsection:
        ``(g) Guidelines for Appraising Photovoltaic Measures and Training
    of Appraisers.--The Appraisal Subcommittee shall, in consultation with
    the Secretary of Housing and Urban Development, the Federal National
    Mortgage Association, and the Federal Home Loan Mortgage Corporation,
    establish specific guidelines for--
                ``(1) appraising off- and on-grid photovoltaic measures for
            compliance with the appraisal standards prescribed pursuant to
            section 1110(2);
                ``(2) requirements under section 1116(f) for certification
            of State certified real estate appraisers and for State
            licensing of State licensed appraisers, to ensure that
            appraisers consider, and are qualified to consider, such
            photovoltaic measures in determining the value of a property;
            and
                ``(3) training of appraisers to meet the requirements
            established pursuant to paragraph (2) of this subsection.''.

    SEC. 299B. HOUSING ASSISTANCE COUNCIL.

        The Secretary shall require the Housing Assistance Council--
                (1) to encourage each organization that receives assistance
            from the Council with any amounts made available from the
            Secretary to provide that any structures and buildings
            developed or assisted under projects, programs, and activities
            funded with such amounts complies with the energy efficiency
            standards under section 284(a) of this subtitle; and
                (2) to establish incentives to encourage each such
            organization to provide that any such structures and buildings
            comply with the energy efficiency and conservation standards,
            and the green building standards, under section 284(b) of such
            Act.

    SEC. 299C. RURAL HOUSING AND ECONOMIC DEVELOPMENT ASSISTANCE.

        The Secretary shall--
                (1) require each tribe, agency, organization, corporation,
            and other entity that receives any assistance from the Office
            of Rural Housing and Economic Development of the Department of
            Housing and Urban Development to provide that any structures
            and buildings developed or assisted under activities funded
            with such amounts complies with the energy efficiency standards
            under section 284(a) of this subtitle; and
                (2) establish incentives to encourage each such tribe,
            agency, organization, corporation, and other entity to provide
            that any such structures and buildings comply with the enhanced
            energy efficiency and conservation standards, and the green
            building standards, under section 284(b) of such Act.

    SEC. 299D. LOANS TO STATES AND INDIAN TRIBES TO CARRY OUT RENEWABLE
                  ENERGY SOURCES ACTIVITIES.

        (a) Establishment of Fund.--There is established in the Treasury of
    the United States a fund, to be known as the ``Alternative Energy
    Sources State Loan Fund''.
        (b) Expenditures.--
                (1) In general.--Subject to paragraph (2), on request by
            the Secretary, the Secretary of the Treasury shall transfer
            from the Fund to the Secretary such amounts as the Secretary
            determines are necessary to provide loans under subsection
            (c)(1).
                (2) Administrative expenses.--Of the amounts in the Fund,
            not more than 5 percent shall be available for each fiscal year
            to pay the administrative expenses of the Department of Housing
            and Urban Development to carry out this section.
        (c) Loans to States and Indian Tribes.--
                (1) In general.--The Secretary shall use amounts in the
            Fund to provide loans to States and Indian tribes to provide
            incentives to owners of single-family and multifamily housing,
            commercial properties, and public buildings to provide--
                        (A) renewable energy sources for such structures,
                    such as wind, wave, solar, biomass, or geothermal
                    energy sources, including incentives to companies and
                    business to change their source of energy to such
                    renewable energy sources and for changing the sources
                    of energy for public buildings to such renewable energy
                    sources;
                        (B) energy efficiency and energy conserving
                    improvements and features for such structures; or
                        (C) infrastructure related to the delivery of
                    electricity and hot water for structures lacking such
                    amenities.
                (2) Eligibility.--To be eligible to receive a loan under
            this subsection, a State or Indian tribe, directly or through
            an appropriate State or tribal agency, shall submit to the
            Secretary an application at such time, in such manner, and
            containing such information as the Secretary may require.
                (3) Criteria for approval.--The Secretary may approve an
            application of a State or Indian tribe under paragraph (2) only
            if the Secretary determines that the State or tribe will use
            the funds from the loan under this subsection to carry out a
            program to provide incentives described in paragraph (1) that--
                        (A) requires that any such renewable energy
                    sources, and energy efficiency and energy conserving
                    improvements and features, developed pursuant to
                    assistance under the program result in compliance of
                    the structure so improved with energy efficiency
                    requirements determined by the Secretary; and
                        (B) includes such compliance and audit requirements
                    as the Secretary determines are necessary to ensure
                    that the program is operated in a sound and effective
                    manner.
                (4) Preference.--In making loans during each fiscal year,
            the Secretary shall give preference to States and Indian tribes
            that have not previously received a loan under this subsection.
                (5) Maximum amount.--The aggregate outstanding principal
            amount from loans under this subsection to any single State or
            Indian tribe may not exceed $500,000,000.
                (6) Loan terms.--Each loan under this subsection shall have
            a term to maturity of not more than 10 years and shall bear
            interest at annual rate, determined by the Secretary, that
            shall not exceed interest rate charged by the Federal Reserve
            Bank of New York to commercial banks and other depository
            institutions for very short-term loans under the primary credit
            program, as most recently published in the Federal Reserve
            Statistical Release on selected interest rates (daily or
            weekly), and commonly referred to as the H.15 release,
            preceding the date of a determination for purposes of applying
            this paragraph.
                (7) Loan repayment.--The Secretary shall require full
            repayment of each loan made under this section.
        (d) Investment of Amounts.--
                (1) In general.--The Secretary of the Treasury shall invest
            such amounts in the Fund that are not, in the judgment of the
            Secretary of the Treasury, required to meet needs for current
            withdrawals.
                (2) Obligations of united states.--Investments may be made
            only in interest-bearing obligations of the United States.
        (e) Reports.--
                (1) Reports to secretary.--For each year during the term of
            a loan made under subsection (c), the State or Indian tribe
            that received the loan shall submit to the Secretary a report
            describing the State or tribal alternative energy sources
            program for which the loan was made and the activities
            conducted under the program using the loan funds during that
            year.
                (2) Report to congress.--Not later than September 30 of
            each year that loans made under subsection (c) are outstanding,
            the Secretary shall submit a report to the Congress describing
            the total amount of such loans provided under subsection (c) to
            each eligible State and Indian tribe during the fiscal year
            ending on such date, and an evaluation on effectiveness of the
            Fund.
        (f) Authorization of Appropriations.--There is authorized to be
    appropriated to the Fund $5,000,000,000.
        (g) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Indian tribe.--The term ``Indian tribe'' has the
            meaning given such term in section 4 of the Native American
            Housing Assistance and Self-Determination Act of 1996 (25
            U.S.C. 4103).
                (2) State.--The term ``State'' means each of the several
            States, the Commonwealth of Puerto Rico, the District of
            Columbia, the Commonwealth of the Northern Mariana Islands,
            Guam, the Virgin Islands, American Samoa, the Trust Territories
            of the Pacific, or any other possession of the United States.

    SEC. 299E. GREEN BANKING CENTERS.

        (a) Insured Depository Institutions.--Section 8 of the Federal
    Deposit Insurance Act (12 U.S.C. 1818) is amended by adding at the end
    the following new subsection:
        ``(x) `Green Banking' Centers.--
                ``(1) In general.--The Federal banking agencies shall
            prescribe guidelines encouraging the establishment and
            maintenance of `green banking' centers by insured depository
            institutions to provide any consumer who seeks information on
            obtaining a mortgage, home improvement loan, home equity loan,
            or renewable energy lease with additional information on--
                        ``(A) obtaining an home energy rating or audit for
                    the residence for which such mortgage or loan is
                    sought;
                        ``(B) obtaining financing for cost-effective
                    energy-saving improvements to such property; and
                        ``(C) obtaining beneficial terms for any mortgage
                    or loan, or qualifying for a larger mortgage or loan,
                    secured by a residence which meets or will meet energy
                    efficiency standards.
                ``(2) Information and referrals.--The information made
            available to consumers under paragraph (1) may include--
                        ``(A) information on obtaining a home energy rating
                    and contact information on qualified energy raters in
                    the area of the residence;
                        ``(B) information on the secondary market
                    guidelines that permit lenders to provide more
                    favorable terms by allowing lenders to increase the
                    ratio on debt-to-income requirements or to use the
                    projected utility savings as a compensating factor;
                        ``(C) information including eligibility information
                    about, and contact information for, any conservation or
                    renewable energy programs, grants, or loans offered by
                    the Secretary of Housing and Urban Development,
                    including the Energy Efficient Mortgage Program;
                        ``(D) information including eligibility information
                    about, and contact information for, any conservation or
                    renewable energy programs, grants, or loans offered for
                    qualified military personal, reservists, and veterans
                    by the Secretary of Veterans Affairs;
                        ``(E) information about, and contact information
                    for, the Office of Efficiency and Renewable Energy at
                    the Department of Energy, including the weatherization
                    assistance program;
                        ``(F) information about, and contact information
                    for, the Energy Star Program of the Environmental
                    Protection Agency;
                        ``(G) information from, and contact information
                    for, the Federal Citizen Information Center of the
                    General Services Administration on energy-efficient
                    mortgages and loans, home energy rating systems, and
                    the availability of energy-efficient mortgage
                    information from a variety of Federal agencies; and
                        ``(H) such other information as the agencies or the
                    insured depository institution may determine to be
                    appropriate or useful.''.
        (b) Insured Credit Unions.--Section 206 of the Federal Credit Union
    Act (12 U.S.C. 1786) is amended by adding at the end the following new
    subsection:
        ``(x) `Green Banking' Centers.--
                ``(1) In general.--The Board shall prescribe guidelines
            encouraging the establishment and maintenance of `green
            banking' centers by insured credit unions to provide any member
            who seeks information on obtaining a mortgage, home improvement
            loan, home equity loan, or renewable energy lease with
            additional information on--
                        ``(A) obtaining an home energy rating or audit for
                    the residence for which such mortgage or loan is
                    sought;
                        ``(B) obtaining financing for cost-effective
                    energy-saving improvements to such property; and
                        ``(C) obtaining beneficial terms for any mortgage
                    or loan, or qualifying for a larger mortgage or loan,
                    secured by a residence which meets or will meet energy
                    efficiency standards.
                ``(2) Information and referrals.--The information made
            available to members under paragraph (1) may include--
                        ``(A) information on obtaining a home energy rating
                    and contact information on qualified energy raters in
                    the area of the residence;
                        ``(B) information on the secondary market
                    guidelines that permit lenders to provide more
                    favorable terms by allowing lenders to increase the
                    ratio on debt-to-income requirements or to use the
                    projected utility savings as a compensating factor;
                        ``(C) information including eligibility information
                    about, and contact information for, any conservation or
                    renewable energy programs, grants, or loans offered by
                    the Secretary of Housing and Urban Development,
                    including the Energy Efficient Mortgage Program;
                        ``(D) information including eligibility information
                    about, and contact information for, any conservation or
                    renewable energy programs, grants, or loans offered for
                    qualified military personal, reservists, and veterans
                    by the Secretary of Veterans Affairs;
                        ``(E) information about, and contact information
                    for, the Office of Efficiency and Renewable Energy at
                    the Department of Energy, including the weatherization
                    assistance program;
                        ``(F) information from, and contact information
                    for, the Federal Citizen Information Center of the
                    General Services Administration on energy-efficient
                    mortgages and loans, home energy rating systems, and
                    the availability of energy-efficient mortgage
                    information from a variety of Federal agencies; and
                        ``(G) such other information as the Board or the
                    insured credit union may determine to be appropriate or
                    useful.''.

    SEC. 299F. GAO REPORTS ON AVAILABILITY OF AFFORDABLE MORTGAGES.

        (a) Study.--The Comptroller General of the United States shall
    periodically, as necessary to comply with subsection (b), examine the
    impact of this subtitle and the amendments made by this subtitle on the
    availability of affordable mortgages in various areas throughout the
    United States, including cities having older infrastructure and limited
    space for the development of new housing.
        (b) Triennial Reports.--The Comptroller General shall submit a
    report once every 3 years to the Committee on Financial Services of the
    House of Representatives and the Committee on Banking, Housing, and
    Urban Affairs of the Senate that shall include--
                (1) a detailed statement of the most recent findings
            pursuant to subsection (a); and
                (2) if the Comptroller General finds that this subtitle or
            the amendments made by this subtitle have directly or
            indirectly resulted in consequences that limit the availability
            or affordability of mortgages in any area or areas within the
            United States, including any city having older infrastructure
            and limited space for the development of new housing, any
            recommendations for any additional actions at the Federal,
            State, or local levels that the Comptroller General considers
            necessary or appropriate to mitigate such effects.
    The first report under this subsection shall be submitted not later
    than the expiration of the 3-year period beginning on the date of the
    enactment of this Act.

    SEC. 299G. PUBLIC HOUSING ENERGY COST REPORT.

        (a) Collection of Information by HUD.--The Secretary of Housing and
    Urban Development shall obtain from each public housing agency, by such
    time as may be necessary to comply with the reporting requirement under
    subsection (b), information regarding the energy costs for public
    housing administered or operated by the agency. For each public housing
    agency, such information shall include the monthly energy costs
    associated with each separate building and development of the agency,
    for the most recently completed 12-month period for which such
    information is available, and such other information as the Secretary
    determines is appropriate in determining which public housing buildings
    and developments are most in need of repairs and improvements to reduce
    energy needs and costs and become more energy efficient.
        (b) Report.--Not later than the expiration of the 12-month period
    beginning on the date of the enactment of this Act, the Secretary of
    Housing and Urban Development shall submit a report to the Congress
    setting forth the information collected pursuant to subsection (a).

    SEC. 299H. SECONDARY MARKET FOR RESIDENTIAL RENEWABLE ENERGY LEASE
                  INSTRUMENTS.

        (a) Purposes.--The purposes of this section are--
                (1) to encourage residential use of renewable energy
            systems by minimizing up-front costs and providing immediate
            utility cost savings to consumers through leasing of such
            systems to homeowners;
                (2) to reduce carbon emissions and the use of nonrenewable
            resources;
                (3) to encourage energy-efficient residential construction
            and rehabilitation;
                (4) to encourage the use of renewable resources by
            homeowners;
                (5) to minimize the impact of development on the
            environment;
                (6) to reduce consumer utility costs; and
                (7) to encourage private investment in the green economy.
        (b) Residual Value of Renewable Energy Asset.--The Secretary of
    Housing and Urban Development shall establish a means of determining
    the residual value of a renewable energy asset such that a secondary
    market for residential renewable energy lease instruments may be
    facilitated. Such means may include, without limitation, the
    calculation of residual value based on the net present value of
    projected future energy production of the renewable energy asset.

    SEC. 299I. GREEN GUARANTEES.

        (a) Authority To Guarantee ``Green Portion'' of Eligible
    Mortgages.--
                (1) In general.--The Secretary of Housing and Urban
            Development may make commitments to guarantee under this
            section and may guarantee, the repayment of the portions of the
            principal obligations of eligible mortgages that are used to
            finance eligible sustainable building elements for the housing
            that is subject to the mortgage.
                (2) Amount of guarantee.--A guarantee under this section by
            the Secretary in connection with an eligible mortgage shall not
            exceed a percentage of the green portion (as such term is
            defined in subsection (g)) of the mortgage, as shall be
            established by the Secretary and may be established on a
            regional basis as the Secretary determines appropriate.
        (b) Eligible Mortgages.--To be considered an eligible mortgage for
    purposes of this section, a mortgage shall comply with all of the
    following requirements:
                (1) Acquisition or construction of housing.--The mortgage
            shall be made for the acquisition or construction of single- or
            multifamily housing and repayment of the mortgage shall be
            secured by an interest in such housing.
                (2) Financing of eligible sustainable building elements
            through green portion of mortgage.--A portion of the principal
            obligation of the mortgage, which meets the requirements under
            subsection (c), shall be used only for financing the provision
            of eligible sustainable building elements for the housing for
            which the mortgage was made.
                (3) Maximum mortgage amount.--The principal obligation of
            the mortgage (including the eligible portion of such mortgage,
            and such initial service charges, appraisal, inspection, and
            other fees as the Secretary shall approve) may not exceed the
            following amounts:
                        (A) Single-family housing.--Such dollar amounts for
                    single-family housing as the Secretary shall establish,
                    which may be established on the basis of the number of
                    dwelling units in the housing, as the Secretary
                    considers appropriate.
                        (B) Multifamily housing.--Such dollar amounts for
                    multifamily housing as the Secretary shall establish,
                    which may be established on the basis of the number of
                    dwelling units in the housing and the number of
                    bedrooms in such dwelling units, as the Secretary
                    considers appropriate.
                (4) Repayment.--The mortgage meets such requirements as the
            Secretary shall establish to ensure that there is a reasonable
            prospect of repayment of the principal and interest on the
            obligation by the mortgagor.
                (5) Mortgage terms.--The mortgage shall meet such
            requirements with respect to loan-to-value ratio, mortgagor
            credit scores, debt-to-income ratio, and other underwriting
            standards, term to maturity, interest rates and amortization,
            including amortization of the green portion of the mortgage,
            and other mortgage terms as the Secretary shall establish.
        (c) Limitations on Green Portion of Mortgage.--The requirements
    under this subsection with respect to the green portion of an eligible
    mortgage are as follows:
                (1) Percentage limitation.--Such portion shall not exceed,
            in the case of single-family or multifamily housing, 10 percent
            of the total principal obligation of the mortgage.
                (2) Dollar amount limitation.--Such portion shall not
            exceed--
                        (A) in the case of single-family housing, such
                    maximum dollar amount limitation as the Secretary shall
                    establish, which may be established on the basis of the
                    number of dwelling units in the housing, as the
                    Secretary considers appropriate; and
                        (B) in the case of multifamily housing, such
                    maximum dollar amount limitation as the Secretary shall
                    establish, which limitation may be established on the
                    basis of the number of dwelling units in the housing
                    and the number of bedrooms in such dwelling units, as
                    the Secretary considers appropriate.
                (3) Cost-effectiveness limitation.--Such portion shall not
            exceed the total present value of the savings (as determined in
            accordance with subsection (d)) attributable to the
            incorporation of the eligible sustainable building elements to
            be financed with the green portion of the mortgage that are to
            be realized over the useful life of such elements.
        (d) Eligible Sustainable Building Elements.--The Secretary may not
    guarantee any eligible mortgage under this section unless the mortgagor
    has demonstrated, in accordance with such requirements as the Secretary
    shall establish, the amount of savings attributable to incorporation of
    the sustainable building elements to be financed with the green portion
    of the mortgage, as measured by the National Green Building Standard
    for all residential construction developed by the National Association
    of Home Builders and the U.S. Green Building Council, and approved by
    the American National Standards Institute, as updated and in effect at
    the time of such demonstration.
        (e) Guarantee Fee.--
                (1) Assessment and collection.--The Secretary shall assess
            and collect fees for guarantees under this section in amounts
            that the Secretary determines are sufficient to cover the costs
            (as such term is defined in section 502 of the Federal Credit
            Reform Act of 1990 (2 U.S.C. 661a)) of such guarantees.
                (2) Availability.--Fees collected under this subsection
            shall be deposited by the Secretary in the Treasury of the
            United States and shall remain available until expended,
            subject to such other conditions as are contained in annual
            appropriations Acts.
        (f) Payment of Guarantee.--
                (1) Default.--
                        (A) Right to payment.--If a mortgagor under a
                    mortgage guaranteed under this section defaults (as
                    defined in regulations issued by the Secretary and
                    specified in the guarantee contract) on the obligation
                    under the mortgage--
                                (i) the holder of the guarantee shall have
                            the right to demand payment of the unpaid
                            amount of the guaranteed portion of the
                            mortgage, to the extent provided under
                            subsection (a)(2), from the Secretary; and
                                (ii) within such period as may be specified
                            in the guarantee or related agreements, the
                            Secretary shall pay to the holder of the
                            guarantee, to the extent provided under
                            subsection (a)(2), the unpaid interest on, and
                            unpaid principal of the portion of guaranteed
                            portion of the mortgage with respect to which
                            the borrower has defaulted, unless the
                            Secretary finds that there was no default by
                            the borrower in the payment of interest or
                            principal or that the default has been
                            remedied.
                        (B) Forbearance.--Nothing in this paragraph
                    precludes any forbearance by the holder of an eligible
                    mortgage for the benefit of the mortgagor which may be
                    agreed upon by the parties to the mortgage and approved
                    by the Secretary.
                (2) Subrogation.--
                        (A) In general.--If the Secretary makes a payment
                    under paragraph (1), the Secretary shall be subrogated
                    to the rights of the recipient of the payment as
                    specified in the guarantee or related agreements
                    including, if appropriate, the authority
                    (notwithstanding any other provision of law)--
                                (i) to complete, maintain, operate, lease,
                            or otherwise dispose of any property acquired
                            pursuant to such guarantee or related
                            agreements; or
                                (ii) to permit the mortgagor, pursuant to
                            an agreement with the Secretary, to continue to
                            occupy the property subject to the mortgage, if
                            the Secretary determines such occupancy to be
                            appropriate.
                        (B) Superiority of rights.--The rights of the
                    Secretary, with respect to any property acquired
                    pursuant to a guarantee or related agreements, shall be
                    superior to the rights of any other person with respect
                    to the property.
                        (C) Terms and conditions.--A guarantee agreement
                    shall include such detailed terms and conditions as the
                    Secretary determines appropriate to protect the
                    interests of the United States in the case of default.
                (3) Full faith and credit.--The full faith and credit of
            the United States is pledged to the payment of all guarantees
            issued under this section with respect to principal and
            interest.
        (g) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Eligible mortgage.--The term ``eligible mortgage''
            means a mortgage that meets the requirements under subsection
            (b).
                (2) Green portion.--The term ``green portion'' means, with
            respect to an eligible mortgage, the portion of the mortgage
            principal referred to in subsection (b)(2) that is
            attributable, as determined in accordance with regulations
            issued by the Secretary, to the increased costs incurred in
            financing provision of sustainable building elements for the
            housing for which the mortgage was made, as compared to the
            costs that would have been incurred in financing the provision
            of other building elements for the housing for the same
            purposes that are commonly or conventionally used but are not
            sustainable building elements.
                (3) Guaranteed portion.--The term ``guaranteed portion''
            means, with respect to an eligible mortgage guaranteed under
            this section, the green portion of the mortgage that is so
            guaranteed.
                (4) Mortgage.--The term ``mortgage'' has the meaning given
            such term in section 201 of the National Housing Act (12 U.S.C.
            1707).
                (5) Multifamily housing.--The term ``multifamily housing''
            means a residential property consisting of five or more
            dwelling units.
                (6) Secretary.--The term ``Secretary'' means the Secretary
            of Housing and Urban Development.
                (7) Single-family housing.--The term ``single-family
            housing'' means a residential property consisting of one to
            four dwelling units.
                (8) Sustainable building element.--The term ``sustainable
            building element'' means such building elements, as the
            Secretary shall define, that have energy efficiency or
            environmental sustainability qualities that are superior to
            such qualities for other building elements for the same
            purposes that are commonly or conventionally used.
        (h) Authorization of Appropriations.--There is authorized to be
    appropriated for costs (as such term is defined in section 502 of the
    Federal Credit Reform Act of 1990 (2 U.S.C. 661a) of guarantees under
    this section $500,000,000 for each of fiscal years 2010 through 2014.
        (i) Regulations.--The Secretary shall issue any regulations
    necessary to carry out this section.

                  TITLE III--REDUCING GLOBAL WARMING POLLUTION

    SEC. 301. SHORT TITLE.

        This title, and sections 112, 116, 221, 222, 223, and 401 of this
    Act, and the amendments made by this title and those sections, may be
    cited as the ``Safe Climate Act''.

                 Subtitle A--Reducing Global Warming Pollution

    SEC. 311. REDUCING GLOBAL WARMING POLLUTION.

        The Clean Air Act (42 U.S.C. and following) is amended by adding
    after title VI the following new title:

            ``TITLE VII--GLOBAL WARMING POLLUTION REDUCTION PROGRAM

         ``PART A--GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS

    ``SEC. 701. FINDINGS AND PURPOSE.

        ``(a) Findings.--The Congress finds as follows:
                ``(1) Global warming poses a significant threat to the
            national security, economy, public health and welfare, and
            environment of the United States, as well as of other nations.
                ``(2) Reviews of scientific studies, including by the
            Intergovernmental Panel on Climate Change and the National
            Academy of Sciences, demonstrate that global warming is the
            result of the combined anthropogenic greenhouse gas emissions
            from numerous sources of all types and sizes. Each increment of
            emission, when combined with other emissions, causes or
            contributes materially to the acceleration and extent of global
            warming and its adverse effects for the lifetime of such gas in
            the atmosphere. Accordingly, controlling emissions in small as
            well as large amounts is essential to prevent, slow the pace
            of, reduce the threats from, and mitigate global warming and
            its adverse effects.
                ``(3) Because they induce global warming, greenhouse gas
            emissions cause or contribute to injuries to persons in the
            United States, including--
                        ``(A) adverse health effects such as disease and
                    loss of life;
                        ``(B) displacement of human populations;
                        ``(C) damage to property and other interests
                    related to ocean levels, acidification, and ice
                    changes;
                        ``(D) severe weather and seasonal changes;
                        ``(E) disruption, costs, and losses to business,
                    trade, employment, farms, subsistence, aesthetic
                    enjoyment of the environment, recreation, culture, and
                    tourism;
                        ``(F) damage to plants, forests, lands, and waters;
                        ``(G) harm to wildlife and habitat;
                        ``(H) scarcity of water and the decreased abundance
                    of other natural resources;
                        ``(I) worsening of tropospheric air pollution;
                        ``(J) substantial threats of similar damage; and
                        ``(K) other harm.
                ``(4) That many of these effects and risks of future
            effects of global warming are widely shared does not minimize
            the adverse effects individual persons have suffered, will
            suffer, and are at risk of suffering because of global warming.
                ``(5) That some of the adverse and potentially catastrophic
            effects of global warming are at risk of occurring and not a
            certainty does not negate the harm persons suffer from actions
            that increase the likelihood, extent, and severity of such
            future impacts.
                ``(6) Nations of the world look to the United States for
            leadership in addressing the threat of and harm from global
            warming. Full implementation of the Safe Climate Act is
            critical to engage other nations in an international effort to
            mitigate the threat of and harm from global warming.
                ``(7) Global warming and its adverse effects are occurring
            and are likely to continue and increase in magnitude, and to do
            so at a greater and more harmful rate, unless the Safe Climate
            Act is fully implemented and enforced in an expeditious manner.
        ``(b) Purpose.--It is the general purpose of the Safe Climate Act
    to help prevent, reduce the pace of, mitigate, and remedy global
    warming and its adverse effects. To fulfill such purpose, it is
    necessary to--
                ``(1) require the timely fulfillment of all governmental
            acts and duties, both substantive and procedural, and the
            prompt compliance of covered entities with the requirements of
            the Safe Climate Act;
                ``(2) establish and maintain an effective, transparent, and
            fair market for emission allowances and preserve the integrity
            of the cap on emissions and of offset credits;
                ``(3) advance the production and deployment of clean energy
            and energy efficiency technologies; and
                ``(4) ensure effective enforcement of the Safe Climate Act
            by citizens, States, Indian tribes, and all levels of
            government because each violation of the Safe Climate Act is
            likely to result in an additional increment of greenhouse gas
            emission and will slow the pace of implementation of the Safe
            Climate Act and delay the achievement of the goals set forth in
            section 702, and cause or contribute to global warming and its
            adverse effects.

    ``SEC. 702. ECONOMY-WIDE REDUCTION GOALS.

        ``The goals of the Safe Climate Act are to reduce steadily the
    quantity of United States greenhouse gas emissions such that--
                ``(1) in 2012, the quantity of United States greenhouse gas
            emissions does not exceed 97 percent of the quantity of United
            States greenhouse gas emissions in 2005;
                ``(2) in 2020, the quantity of United States greenhouse gas
            emissions does not exceed 80 percent of the quantity of United
            States greenhouse gas emissions in 2005;
                ``(3) in 2030, the quantity of United States greenhouse gas
            emissions does not exceed 58 percent of the quantity of United
            States greenhouse gas emissions in 2005; and
                ``(4) in 2050, the quantity of United States greenhouse gas
            emissions does not exceed 17 percent of the quantity of United
            States greenhouse gas emissions in 2005.

    ``SEC. 703. REDUCTION TARGETS FOR SPECIFIED SOURCES.

        ``(a) In General.--The regulations issued under section 721 shall
    cap and reduce annually the greenhouse gas emissions of capped sources
    each calendar year beginning in 2012 such that--
                ``(1) in 2012, the quantity of greenhouse gas emissions
            from capped sources does not exceed 97 percent of the quantity
            of greenhouse gas emissions from such sources in 2005;
                ``(2) in 2020, the quantity of greenhouse gas emissions
            from capped sources does not exceed 83 percent of the quantity
            of greenhouse gas emissions from such sources in 2005;
                ``(3) in 2030, the quantity of greenhouse gas emissions
            from capped sources does not exceed 58 percent of the quantity
            of greenhouse gas emissions from such sources in 2005; and
                ``(4) in 2050, the quantity of greenhouse gas emissions
            from capped sources does not exceed 17 percent of the quantity
            of greenhouse gas emissions from such sources in 2005.
        ``(b) Definition.--For purposes of this section, the term
    `greenhouse gas emissions from such sources in 2005' means emissions to
    which section 722 would have applied if the requirements of this title
    for the specified year had been in effect for 2005.

    ``SEC. 704. SUPPLEMENTAL POLLUTION REDUCTIONS.

        ``For the purposes of decreasing the likelihood of catastrophic
    climate change, preserving tropical forests, building capacity to
    generate offset credits, and facilitating international action on
    global warming, the Administrator shall set aside the percentage
    specified in section 781 of the quantity of emission allowances
    established under section 721(a) for each year, to be used to achieve a
    reduction of greenhouse gas emissions from deforestation in developing
    countries in accordance with part E. In 2020, activities supported
    under part E shall provide greenhouse gas reductions in an amount equal
    to an additional 10 percentage points of reductions from United States
    greenhouse gas emissions in 2005. The Administrator shall distribute
    these allowances with respect to activities in countries that enter
    into and implement agreements or arrangements relating to reduced
    deforestation as described in section 754(a)(2).

    ``SEC. 705. REVIEW AND PROGRAM RECOMMENDATIONS.

        ``(a) In General.--The Administrator shall, in consultation with
    appropriate Federal agencies, submit to Congress a report not later
    than July 1, 2013, and every 4 years thereafter, that includes--
                ``(1) an analysis of key findings based on the latest
            scientific information and data relevant to global climate
            change;
                ``(2) an analysis of capabilities to monitor and verify
            greenhouse gas reductions on a worldwide basis, including for
            the United States, as required under the Safe Climate Act; and
                ``(3) an analysis of the status of worldwide greenhouse gas
            reduction efforts, including implementation of the Safe Climate
            Act and other policies, both domestic and international, for
            reducing greenhouse gas emissions, preventing dangerous
            atmospheric concentrations of greenhouse gases, preventing
            significant irreversible consequences of climate change, and
            reducing vulnerability to the impacts of climate change.
        ``(b) Exception.--Paragraph (3) of subsection (a) shall not apply
    to the first report submitted under such subsection.
        ``(c) Latest Scientific Information.--The analysis required under
    subsection (a)(1) shall--
                ``(1) address existing scientific information and reports,
            considering, to the greatest extent possible, the most recent
            assessment report of the Intergovernmental Panel on Climate
            Change, reports by the United States Global Change Research
            Program, the Natural Resources Climate Change Adaptation Panel
            established under section 475 of the American Clean Energy and
            Security Act of 2009, and Federal agencies, and the European
            Union's global temperature data assessment; and
                ``(2) review trends and projections for--
                        ``(A) global and country-specific annual emissions
                    of greenhouse gases, and cumulative greenhouse gas
                    emissions produced between 1850 and the present,
                    including--
                                ``(i) global cumulative emissions of
                            anthropogenic greenhouse gases;
                                ``(ii) global annual emissions of
                            anthropogenic greenhouse gases; and
                                ``(iii) by country, annual total, annual
                            per capita, and cumulative anthropogenic
                            emissions of greenhouse gases for the top 50
                            emitting nations;
                        ``(B) significant changes, both globally and by
                    region, in annual net non-anthropogenic greenhouse gas
                    emissions from natural sources, including permafrost,
                    forests, or oceans;
                        ``(C) global atmospheric concentrations of
                    greenhouse gases, expressed in annual concentration
                    units as well as carbon dioxide equivalents based on
                    100-year global warming potentials;
                        ``(D) major climate forcing factors, such as
                    aerosols;
                        ``(E) global average temperature, expressed as
                    seasonal and annual averages in land, ocean, and land-
                    plus-ocean averages; and
                        ``(F) sea level rise;
                ``(3) assess the current and potential impacts of global
            climate change on--
                        ``(A) human populations, including impacts on
                    public health, economic livelihoods, subsistence, human
                    infrastructure, and displacement or permanent
                    relocation due to flooding, severe weather, extended
                    drought, erosion, or other ecosystem changes;
                        ``(B) freshwater systems, including water resources
                    for human consumption and agriculture and natural and
                    managed ecosystems, flood and drought risks, and
                    relative humidity;
                        ``(C) the carbon cycle, including impacts related
                    to the thawing of permafrost, the frequency and
                    intensity of wildfire, and terrestrial and ocean carbon
                    sinks;
                        ``(D) ecosystems and animal and plant populations,
                    including impacts on species abundance, phenology, and
                    distribution;
                        ``(E) oceans and ocean ecosystems, including
                    effects on sea level, ocean acidity, ocean
                    temperatures, coral reefs, ocean circulation,
                    fisheries, and other indicators of ocean ecosystem
                    health;
                        ``(F) the cryosphere, including effects on ice
                    sheet mass balance, mountain glacier mass balance, and
                    sea-ice extent and volume;
                        ``(G) changes in the intensity, frequency, or
                    distribution of severe weather events, including
                    precipitation, tropical cyclones, tornadoes, and severe
                    heat waves;
                        ``(H) agriculture and forest systems; and
                        ``(I) any other indicators the Administrator deems
                    appropriate;
                ``(4) summarize any significant socio-economic impacts of
            climate change in the United States, including the territories
            of the United States, drawing on work by Federal agencies and
            the academic literature, including impacts on--
                        ``(A) public health;
                        ``(B) economic livelihoods and subsistence;
                        ``(C) displacement or permanent relocation due to
                    flooding, severe weather, extended drought, erosion, or
                    other ecosystem changes;
                        ``(D) human infrastructure, including coastal
                    infrastructure vulnerability to extreme events and sea
                    level rise, river floodplain infrastructure, and sewer
                    and water management systems;
                        ``(E) agriculture and forests, including effects on
                    potential growing season, distribution, and yield;
                        ``(F) water resources for human consumption,
                    agriculture and natural and managed ecosystems, flood
                    and drought risks, and relative humidity;
                        ``(G) energy supply and use; and
                        ``(H) transportation;
                ``(5) in assessing risks and impacts, use a risk management
            framework, including both qualitative and quantitative
            measures, to assess the observed and projected impacts of
            current and future climate change, accounting for--
                        ``(A) both monetized and non-monetized losses;
                        ``(B) potential nonlinear, abrupt, or essentially
                    irreversible changes in the climate system;
                        ``(C) potential nonlinear increases in the cost of
                    impacts;
                        ``(D) potential low-probability, high impact
                    events; and
                        ``(E) whether impacts are transitory or essentially
                    permanent; and
                ``(6) based on the findings of the Administrator under this
            section, as well as assessments produced by the
            Intergovernmental Panel on Climate Change, the United States
            Global Change Research program, and other relevant scientific
            entities--
                        ``(A) describe increased risks to natural systems
                    and society that would result from an increase in
                    global average temperature 3.6 degrees Fahrenheit (2
                    degrees Celsius) above the pre-industrial average or an
                    increase in atmospheric greenhouse gas concentrations
                    above 450 parts per million carbon dioxide equivalent;
                    and
                        ``(B) identify and assess--
                                ``(i) significant residual risks not
                            avoided by the thresholds described in
                            subparagraph (A);
                                ``(ii) alternative thresholds or targets
                            that may more effectively limit the risks
                            identified pursuant to clause (i); and
                                ``(iii) thresholds above those described in
                            subparagraph (A) which significantly increase
                            the risk of certain impacts or render them
                            essentially permanent.
        ``(d) Status of Monitoring and Verification Capabilities to
    Evaluate Greenhouse Gas Reduction Efforts.--The analysis required under
    subsection (a)(2) shall evaluate the capabilities of the monitoring,
    reporting, and verification systems used to quantify progress in
    achieving reductions in greenhouse gas emissions both globally and in
    the United States (as described in section 702), including--
                ``(1) quantification of emissions and emission reductions
            by entities participating in the cap and trade program under
            this title;
                ``(2) quantification of emissions and emission reductions
            by entities participating in the offset program under this
            title;
                ``(3) quantification of emission and emissions reductions
            by entities regulated by performance standards;
                ``(4) quantification of aggregate net emissions and
            emissions reductions by the United States; and
                ``(5) quantification of global changes in net emissions and
            in sources and sinks of greenhouse gases.
        ``(e) Status of Greenhouse Gas Reduction Efforts.--The analysis
    required under subsection (a)(3) shall address--
                ``(1) whether the programs under Safe Climate Act and other
            Federal statutes are resulting in sufficient United States
            greenhouse gas emissions reductions to meet the emissions
            reduction goals described in section 702, taking into account
            the use of offsets; and
                ``(2) whether United States actions, taking into account
            international actions, commitments, and trends, and considering
            the range of plausible emissions scenarios, are sufficient to
            avoid--
                        ``(A) atmospheric greenhouse gas concentrations
                    above 450 parts per million carbon dioxide equivalent;
                        ``(B) global average surface temperature 3.6
                    degrees Fahrenheit (2 degrees Celsius) above the pre-
                    industrial average, or such other temperature
                    thresholds as the Administrator deems appropriate; and
                        ``(C) other temperature or greenhouse gas
                    thresholds identified pursuant to subsection (c)(6)(B).
        ``(f) Recommendations.--
                ``(1) Latest scientific information.--Based on the analysis
            described in subsection (a)(1), each report under subsection
            (a) shall identify actions that could be taken to--
                        ``(A) improve the characterization of changes in
                    the earth-climate system and impacts of global climate
                    change;
                        ``(B) better inform decision making and actions
                    related to global climate change;
                        ``(C) mitigate risks to natural and social systems;
                    and
                        ``(D) design policies to better account for climate
                    risks.
                ``(2) Monitoring, reporting and verification.--Based on the
            analysis described in subsection (a)(2), each report under
            subsection (a) shall identify key gaps in measurement,
            reporting, and verification capabilities and make
            recommendations to improve the accuracy and reliability of
            those capabilities.
                ``(3) Status of greenhouse gas reduction efforts.--Based on
            the analysis described in subsection (a)(3), taking into
            account international actions, commitments, and trends, and
            considering the range of plausible emissions scenarios, each
            report under subsection (a) shall identify--
                        ``(A) the quantity of additional reductions
                    required to meet the emissions reduction goals in
                    section 702;
                        ``(B) the quantity of additional reductions in
                    global greenhouse gas emissions needed to avoid the
                    concentration and temperature thresholds identified in
                    subsection (e); and
                        ``(C) possible strategies and approaches for
                    achieving additional reductions.
        ``(g) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary.

    ``SEC. 706. NATIONAL ACADEMY REVIEW.

        ``(a) In General.--Not later than 1 year after the date of
    enactment of this title, the Administrator shall offer to enter into a
    contract with the National Academy of Sciences (in this section
    referred to as the `Academy') under which the Academy shall, not later
    than July 1, 2014, and every 4 years thereafter, submit to Congress and
    the Administrator a report that includes--
                ``(1) a review of the most recent report and
            recommendations issued under section 705; and
                ``(2) an analysis of technologies to achieve reductions in
            greenhouse gas emissions.
        ``(b) Failure to Issue a Report.--In the event that the
    Administrator has not issued all or part of the most recent report
    required under section 705, the Academy shall conduct its own review
    and analysis of the required information.
        ``(c) Technological Information.--The analysis required under
    subsection (a)(2) shall--
                ``(1) review existing technological information and
            reports, including the most recent reports by the Department of
            Energy, the United States Global Change Research Program, the
            Intergovernmental Panel on Climate Change, and the
            International Energy Agency and any other relevant information
            on technologies or practices that reduce or limit greenhouse
            gas emissions;
                ``(2) include the participation of technical experts from
            relevant private industry sectors;
                ``(3) review the current and future projected deployment of
            technologies and practices in the United States that reduce or
            limit greenhouse gas emissions, including--
                        ``(A) technologies for capture and sequestration of
                    greenhouse gases;
                        ``(B) technologies to improve energy efficiency;
                        ``(C) low- or zero-greenhouse gas emitting energy
                    technologies;
                        ``(D) low- or zero-greenhouse gas emitting fuels;
                        ``(E) biological sequestration practices and
                    technologies; and
                        ``(F) any other technologies the Academy deems
                    relevant; and
                ``(4) review and compare the emissions reduction potential,
            commercial viability, market penetration, investment trends,
            and deployment of the technologies described in paragraph (3),
            including--
                        ``(A) the need for additional research and
                    development, including publicly funded research and
                    development;
                        ``(B) the extent of commercial deployment,
                    including, where appropriate, a comparison to the cost
                    and level of deployment of conventional fossil fuel-
                    fired energy technologies and devices; and
                        ``(C) an evaluation of any substantial
                    technological, legal, or market-based barriers to
                    commercial deployment.
        ``(d) Recommendations.--
                ``(1) Latest scientific information.--Based on the review
            described in subsection (a)(1), the Academy shall identify
            actions that could be taken to--
                        ``(A) improve the characterization of changes in
                    the earth-climate system and impacts of global climate
                    change;
                        ``(B) better inform decision making and actions
                    related to global climate change;
                        ``(C) mitigate risks to natural and social systems;
                        ``(D) design policies to better account for climate
                    risks; and
                        ``(E) improve the accuracy and reliability of
                    capabilities to monitor, report, and verify greenhouse
                    gas emissions reduction efforts.
                ``(2) Technological information.--Based on the analysis
            described in subsection (a)(2), the Academy shall identify--
                        ``(A) additional emissions reductions that may be
                    possible as a result of technologies described in the
                    analysis;
                        ``(B) barriers to the deployment of such
                    technologies; and
                        ``(C) actions that could be taken to speed
                    deployment of such technologies.
                ``(3) Status of greenhouse gas reduction efforts.--Based on
            the review described in subsection (a)(1), the Academy shall
            identify--
                        ``(A) the quantity of additional reductions
                    required to meet the emissions reduction goals
                    described in section 702; and
                        ``(B) the quantity of additional reductions in
                    global greenhouse gas emissions needed to avoid the
                    concentration and temperature thresholds described in
                    section 705(c)(6)(A) or identified pursuant to section
                    705(c)(6)(B).
        ``(e) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary.

    ``SEC. 707. PRESIDENTIAL RESPONSE AND RECOMMENDATIONS.

        ``(a) Agency Actions.--The President shall direct relevant Federal
    agencies to use existing statutory authority to take appropriate
    actions identified in the reports submitted under sections 705 and 706,
    and to address any shortfalls identified in such reports, not later
    than July 1, 2015, and every 4 years thereafter.
        ``(b) Plan.--In the event that the Administrator or the National
    Academy of Sciences has concluded, in the most recent report submitted
    under section 705 or 706 respectively, that the United States will not
    achieve the necessary domestic greenhouse gas emissions reductions, or
    that global actions will not maintain safe global average surface
    temperature and atmospheric greenhouse gas concentration thresholds,
    the President shall, not later than July 1, 2015, and every 4 years
    thereafter, submit to Congress a plan identifying domestic and
    international actions that will achieve necessary additional greenhouse
    gas reductions, including any recommendations for legislative action.

           ``PART B--DESIGNATION AND REGISTRATION OF GREENHOUSE GASES

    ``SEC. 711. DESIGNATION OF GREENHOUSE GASES.

        ``(a) Greenhouse Gases.--For purposes of this title, the following
    are greenhouse gases:
                ``(1) Carbon dioxide.
                ``(2) Methane.
                ``(3) Nitrous oxide.
                ``(4) Sulfur hexafluoride.
                ``(5) Hydrofluorocarbons emitted from a chemical
            manufacturing process at an industrial stationary source.
                ``(6) Any perfluorocarbon.
                ``(7) Nitrogen trifluoride.
                ``(8) Any other anthropogenic gas designated as a
            greenhouse gas by the Administrator under this section.
        ``(b) Determination on Administrator's Initiative.--The
    Administrator shall, by rule--
                ``(1) determine whether 1 metric ton of another
            anthropogenic gas makes the same or greater contribution to
            global warming over 100 years as 1 metric ton of carbon
            dioxide;
                ``(2) determine the carbon dioxide equivalent value for
            each gas with respect to which the Administrator makes an
            affirmative determination under paragraph (1);
                ``(3) for each gas with respect to which the Administrator
            makes an affirmative determination under paragraph (1) and that
            is used as a substitute for a class I or class II substance
            under title VI, determine the extent to which to regulate that
            gas under section 619 and specify appropriate compliance
            obligations under section 619;
                ``(4) designate as a greenhouse gas for purposes of this
            title each gas for which the Administrator makes an affirmative
            determination under paragraph (1), to the extent that it is not
            regulated under section 619; and
                ``(5) specify the appropriate compliance obligations under
            this title for each gas designated as a greenhouse gas under
            paragraph (4).
        ``(c) Petitions to Designate a Greenhouse Gas.--
                ``(1) In general.--Any person may petition the
            Administrator to designate as a greenhouse gas any
            anthropogenic gas 1 metric ton of which makes the same or
            greater contribution to global warming over 100 years as 1
            metric ton of carbon dioxide.
                ``(2) Contents of petition.--The petitioner shall provide
            sufficient data, as specified by rule by the Administrator, to
            demonstrate that the gas is likely to be designated as a
            greenhouse gas and is likely to be produced, imported, used, or
            emitted in the United States. To the extent practicable, the
            petitioner shall also identify producers, importers,
            distributors, users, and emitters of the gas in the United
            States.
                ``(3) Review and action by the administrator.--Not later
            than 90 days after receipt of a petition under paragraph (2),
            the Administrator shall determine whether the petition is
            complete and notify the petitioner and the public of the
            decision.
                ``(4) Additional information.--The Administrator may
            require producers, importers, distributors, users, or emitters
            of the gas to provide information on the contribution of the
            gas to global warming over 100 years compared to carbon
            dioxide.
                ``(5) Treatment of petition.--For any substance used as a
            substitute for a class I or class II substance under title VI,
            the Administrator may elect to treat a petition under this
            subsection as a petition to list the substance as a class II,
            group II substance under section 619, and may require the
            petition to be amended to address listing criteria promulgated
            under that section.
                ``(6) Determination.--Not later than 2 years after receipt
            of a complete petition, the Administrator shall, after notice
            and an opportunity for comment--
                        ``(A) issue and publish in the Federal Register--
                                ``(i) a determination that 1 metric ton of
                            the gas does not make a contribution to global
                            warming over 100 years that is equal to or
                            greater than that made by 1 metric ton of
                            carbon dioxide; and
                                ``(ii) an explanation of the decision; or
                        ``(B) determine that 1 metric ton of the gas makes
                    a contribution to global warming over 100 years that is
                    equal to or greater than that made by 1 metric ton of
                    carbon dioxide, and take the actions described in
                    subsection (b) with respect to such gas.
                ``(7) Grounds for denial.--The Administrator may not deny a
            petition under this subsection solely on the basis of
            inadequate Environmental Protection Agency resources or time
            for review.
        ``(d) Science Advisory Board Consultation.--
                ``(1) Consultation.--The Administrator shall--
                        ``(A) give notice to the Science Advisory Board
                    prior to making a determination under subsection
                    (b)(1), (c)(6), or (e)(2)(B);
                        ``(B) consider the written recommendations of the
                    Science Advisory Board under paragraph (2) regarding
                    the determination; and
                        ``(C) consult with the Science Advisory Board
                    regarding such determination, including consultation
                    subsequent to receipt of such written recommendations.
                ``(2) Formulation of recommendations.--Upon receipt of
            notice under paragraph (1)(A) regarding a pending determination
            under subsection (b)(1), (c)(6), or (e)(2)(B), the Science
            Advisory Board shall--
                        ``(A) formulate recommendations regarding such
                    determination, subject to a peer review process; and
                        ``(B) submit such recommendations in writing to the
                    Administrator.
        ``(e) Manufacturing and Emission Notices.--
                ``(1) Notice requirement.--
                        ``(A) In general.--Effective 24 months after the
                    date of enactment of this title, no person may
                    manufacture or introduce into interstate commerce a
                    fluorinated gas, or emit a significant quantity, as
                    determined by the Administrator, of any fluorinated gas
                    that is generated as a byproduct during the production
                    or use of another fluorinated gas, unless--
                                ``(i) the gas is designated as a greenhouse
                            gas under this section or is an ozone-depleting
                            substance listed as a class I or class II
                            substance under title VI;
                                ``(ii) the Administrator has determined
                            that 1 metric ton of such gas does not make a
                            contribution to global warming over 100 years
                            that is equal to or greater than that made by 1
                            metric ton of carbon dioxide; or
                                ``(iii) the person manufacturing or
                            importing the gas for distribution into
                            interstate commerce, or emitting the gas, has
                            submitted to the Administrator, at least 90
                            days before the start of such manufacture,
                            introduction into commerce, or emission, a
                            notice of such person's manufacture,
                            introduction into commerce, or emission of such
                            gas, and the Administrator has not determined
                            that that notice or a substantially similar
                            notice submitted by that person is incomplete.
                        ``(B) Alternative compliance.--For a gas that is a
                    substitute for a class I or class II substance under
                    title VI and either has been listed as acceptable for
                    use under section 612 or is currently subject to
                    evaluation under section 612, the Administrator may
                    accept the notice and information provided pursuant to
                    that section as fulfilling the obligation under clause
                    (iii) of subparagraph (A).
                ``(2) Review and action by the administrator.--
                        ``(A) Completeness.--Not later than 90 days after
                    receipt of notice under paragraph (1)(A)(iii) or (B),
                    the Administrator shall determine whether the notice is
                    complete.
                        ``(B) Determination.-- If the Administrator
                    determines that the notice is complete, the
                    Administrator shall, after notice and an opportunity
                    for comment, not later than 12 months after receipt of
                    the notice--
                                ``(i) issue and publish in the Federal
                            Register--
                                        ``(I) a determination that 1 metric
                                    ton of the gas does not make a
                                    contribution to global warming over 100
                                    years that is equal to or greater than
                                    that made by 1 metric ton of carbon
                                    dioxide; and
                                        ``(II) an explanation of the
                                    decision; or
                                ``(ii) determine that 1 metric ton of the
                            gas makes a contribution to global warming over
                            100 years that is equal to or greater than that
                            made by 1 metric ton of carbon dioxide, and
                            take the actions described in subsection (b)
                            with respect to such gas.
        ``(f) Regulations.--Not later than 1 year after the date of
    enactment of this title, the Administrator shall promulgate regulations
    to carry out this section. Such regulations shall include--
                ``(1) requirements for the contents of a petition submitted
            under subsection (c);
                ``(2) requirements for the contents of a notice required
            under subsection (e); and
                ``(3) methods and standards for evaluating the carbon
            dioxide equivalent value of a gas.
        ``(g) Gases Regulated Under Title VI.--The Administrator shall not
    designate a gas as a greenhouse gas under this section to the extent
    that the gas is regulated under title VI.
        ``(h) Savings Clause.--Nothing in this section shall be interpreted
    to relieve any person from complying with the requirements of section
    612.

    ``SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF GREENHOUSE GASES.

        ``(a) Measure of Quantity of Greenhouse Gases.--Any provision of
    this title or title VIII that refers to a quantity or percentage of a
    quantity of greenhouse gases shall mean the quantity or percentage of
    the greenhouse gases expressed in carbon dioxide equivalents.
        ``(b) Initial Value.--Except as provided by the Administrator under
    this section or section 711--
                ``(1) the carbon dioxide equivalent value of greenhouse
            gases for purposes of this Act shall be as follows:

                             ``CARBON DIOXIDE EQUIVALENT OF 1 TON OF LISTED GREENHOUSE GASES
    ----------------------------------------------------------------------------------------------------------------
                  Greenhouse gas (1 metric ton)                       Carbon dioxide equivalent (metric tons)
    ----------------------------------------------------------------------------------------------------------------
    Carbon dioxide                                            1
    ----------------------------------------------------------------------------------------------------------------
    Methane                                                   25
    ----------------------------------------------------------------------------------------------------------------
    Nitrous oxide                                             298
    ----------------------------------------------------------------------------------------------------------------
    HFC-23                                                    14,800
    ----------------------------------------------------------------------------------------------------------------
    HFC-125                                                   3,500
    ----------------------------------------------------------------------------------------------------------------
    HFC-134a                                                  1,430
    ----------------------------------------------------------------------------------------------------------------
    HFC-143a                                                  4,470
    ----------------------------------------------------------------------------------------------------------------
    HFC-152a                                                  124
    ----------------------------------------------------------------------------------------------------------------
    HFC-227ea                                                 3,220
    ----------------------------------------------------------------------------------------------------------------
    HFC-236fa                                                 9,810
    ----------------------------------------------------------------------------------------------------------------
    HFC-4310mee                                               1,640
    ----------------------------------------------------------------------------------------------------------------
    CF4                                                       7,390
    ----------------------------------------------------------------------------------------------------------------
    C2F6                                                      12,200
    ----------------------------------------------------------------------------------------------------------------
    C4F10                                                     8,860
    ----------------------------------------------------------------------------------------------------------------
    C6F14                                                     9,300
    ----------------------------------------------------------------------------------------------------------------
    SF6                                                       22,800
    ----------------------------------------------------------------------------------------------------------------
    NF3                                                       17,200
    ----------------------------------------------------------------------------------------------------------------

            ; and
                ``(2) the carbon dioxide equivalent value for purposes of
            this Act for any greenhouse gas not listed in the table under
            paragraph (1) shall be the 100-year Global Warming Potentials
            provided in the Intergovernmental Panel on Climate Change
            Fourth Assessment Report.
        ``(c) Periodic Review.--
                ``(1) Not later than February 1, 2017, and (except as
            provided in paragraph (3)) not less than every 5 years
            thereafter, the Administrator shall--
                        ``(A) review and, if appropriate, revise the carbon
                    dioxide equivalent values established under this
                    section or section 711(b)(2), based on a determination
                    of the number of metric tons of carbon dioxide that
                    makes the same contribution to global warming over 100
                    years as 1 metric ton of each greenhouse gas; and
                        ``(B) publish in the Federal Register the results
                    of that review and any revisions.
                ``(2) A revised determination published in the Federal
            Register under paragraph (1)(B) shall take effect for
            greenhouse gas emissions starting on January 1 of the first
            calendar year starting at least 9 months after the date on
            which the revised determination was published.
                ``(3) The Administrator may decrease the frequency of
            review and revision under paragraph (1) if the Administrator
            determines that such decrease is appropriate in order to
            synchronize such review and revision with any similar review
            process carried out pursuant to the United Nations Framework
            Convention on Climate Change, done at New York on May 9, 1992,
            or to an agreement negotiated under that convention, except
            that in no event shall the Administrator carry out such review
            and revision any less frequently than every 10 years.
        ``(d) Methodology.--In setting carbon dioxide equivalent values,
    for purposes of this section or section 711, the Administrator shall
    take into account publications by the Intergovernmental Panel on
    Climate Change or a successor organization under the auspices of the
    United Nations Environmental Programme and the World Meteorological
    Organization.

    ``SEC. 713. GREENHOUSE GAS REGISTRY.

        ``(a) Definitions.--For purposes of this section:
                ``(1) Climate registry.--The term `Climate Registry' means
            the greenhouse gas emissions registry jointly established and
            managed by more than 40 States and Indian tribes in 2007 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.
                ``(2) Reporting entity.--The term `reporting entity'
            means--
                        ``(A) a covered entity;
                        ``(B) an entity that--
                                ``(i) would be a covered entity if it had
                            emitted, produced, imported, manufactured, or
                            delivered in 2008 or any subsequent year more
                            than the applicable threshold level in the
                            definition of covered entity in paragraph (13)
                            of section 700; and
                                ``(ii) has emitted, produced, imported,
                            manufactured, or delivered in 2008 or any
                            subsequent year more than the applicable
                            threshold level in the definition of covered
                            entity in paragraph (13) of section 700,
                            provided that the figure of 25,000 tons of
                            carbon dioxide equivalent is read instead as
                            10,000 tons of carbon dioxide equivalent and
                            the figure of 460,000,000 cubic feet is read
                            instead as 184,000,000 cubic feet;
                        ``(C) any other entity that emits a greenhouse gas,
                    or produces, imports, manufactures, or delivers
                    material whose use results or may result in greenhouse
                    gas emissions if the Administrator determines that
                    reporting under this section by such entity will help
                    achieve the purposes of this title or title VIII;
                        ``(D) any vehicle fleet with emissions of more than
                    25,000 tons of carbon dioxide equivalent on an annual
                    basis, if the Administrator determines that the
                    inclusion of such fleet will help achieve the purposes
                    of this title or title VIII; or
                        ``(E) any entity that delivers electricity to a
                    facility in an energy-intensive industrial sector that
                    meets the energy or greenhouse gas intensity criteria
                    in section 764(b)(2)(A)(i).
        ``(b) Regulations.--
                ``(1) In general.--Not later than 6 months after the date
            of enactment of this title, the Administrator shall issue
            regulations establishing a Federal greenhouse gas registry.
            Such regulations shall--
                        ``(A) require reporting entities to submit to the
                    Administrator data on--
                                ``(i) greenhouse gas emissions in the
                            United States;
                                ``(ii) the production and manufacture in
                            the United States, importation into the United
                            States, and, at the discretion of the
                            Administrator, exportation from the United
                            States, of fuels and industrial gases the uses
                            of which result or may result in greenhouse gas
                            emissions;
                                ``(iii) deliveries in the United States of
                            natural gas, and any other gas meeting the
                            specifications for commingling with natural gas
                            for purposes of delivery, the combustion of
                            which result or may result in greenhouse gas
                            emissions; and
                                ``(iv) the capture and sequestration of
                            greenhouse gases;
                        ``(B) require covered entities and, where
                    appropriate, other reporting entities to submit to the
                    Administrator data sufficient to ensure compliance with
                    or implementation of the requirements of this title;
                        ``(C) require reporting of electricity delivered to
                    facilities in an energy-intensive industrial sector
                    that meets the energy or greenhouse gas intensity
                    criteria in section 764(b)(2)(A)(i);
                        ``(D) ensure the completeness, consistency,
                    transparency, accuracy, precision, and reliability of
                    such data;
                        ``(E) take into account the best practices from the
                    most recent Federal, State, tribal, and international
                    protocols for the measurement, accounting, reporting,
                    and verification of greenhouse gas emissions, including
                    protocols from the Climate Registry and other mandatory
                    State or multistate authorized programs;
                        ``(F) take into account the latest scientific
                    research;
                        ``(G) require that, for covered entities with
                    respect to greenhouse gases to which section 722
                    applies, and, to the extent determined to be
                    appropriate by the Administrator, for covered entities
                    with respect to other greenhouse gases and for other
                    reporting entities, submitted data are based on--
                                ``(i) continuous monitoring systems for
                            fuel flow or emissions, such as continuous
                            emission monitoring systems;
                                ``(ii) alternative systems that are
                            demonstrated as providing data with the same
                            precision, reliability, accessibility, and
                            timeliness, or, to the extent the Administrator
                            determines is appropriate for reporting small
                            amounts of emissions, the same precision,
                            reliability, and accessibility and similar
                            timeliness, as data provided by continuous
                            monitoring systems for fuel flow or emissions;
                            or
                                ``(iii) alternative methodologies that are
                            demonstrated to provide data with precision,
                            reliability, accessibility, and timeliness, or,
                            to the extent the Administrator determines is
                            appropriate for reporting small amounts of
                            emissions, precision, reliability, and
                            accessibility, as similar as is technically
                            feasible to that of data generally provided by
                            continuous monitoring systems for fuel flow or
                            emissions, if the Administrator determines
                            that, with respect to a reporting entity, there
                            is no continuous monitoring system or
                            alternative system described in clause (i) or
                            (ii) that is technically feasible;
                        ``(H) require that the Administrator, in
                    determining the extent to which the requirement to use
                    systems or methodologies in accordance with
                    subparagraph (G) is appropriate for reporting entities
                    other than covered entities or for greenhouse gases to
                    which section 722 does not apply, consider the cost of
                    using such systems and methodologies, and of using
                    other systems and methodologies that are available and
                    suitable, for quantifying the emissions involved in
                    light of the purposes of this title, including the goal
                    of collecting consistent entity-wide data;
                        ``(I) include methods for minimizing double
                    reporting and avoiding irreconcilable double reporting
                    of greenhouse gas emissions;
                        ``(J) establish measurement protocols for carbon
                    capture and sequestration systems, taking into
                    consideration the regulations promulgated under section
                    813;
                        ``(K) require that reporting entities provide the
                    data required under this paragraph in reports submitted
                    electronically to the Administrator, in such form and
                    containing such information as may be required by the
                    Administrator;
                        ``(L) include requirements for keeping records
                    supporting or related to, and protocols for auditing,
                    submitted data;
                        ``(M) establish consistent policies for calculating
                    carbon content and greenhouse gas emissions for each
                    type of fossil fuel with respect to which reporting is
                    required;
                        ``(N) subsequent to implementation of policies
                    developed under subparagraph (M), provide for immediate
                    dissemination, to States, Indian tribes, and on the
                    Internet, of all data reported under this section as
                    soon as practicable after electronic audit by the
                    Administrator and any resulting correction of data,
                    except that data shall not be disseminated under this
                    subparagraph if--
                                ``(i) its nondissemination is vital to the
                            national security of the United States, as
                            determined by the President; or
                                ``(ii) it is 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--
                                        ``(I) data relating to greenhouse
                                    gas emissions, including any upstream
                                    or verification data from reporting
                                    entities, shall not be considered to be
                                    confidential business information; and
                                        ``(II) data that is confidential
                                    business information shall be provided
                                    to a State or Indian tribe within whose
                                    jurisdiction the reporting entity is
                                    located, if the Administrator
                                    determines that such State or Indian
                                    tribe has in effect protections for
                                    confidential business information that
                                    are at least as protective as
                                    protections applicable to the Federal
                                    Government;
                        ``(O) prescribe methods by which the Administrator
                    shall, in cases in which satisfactory data are not
                    submitted to the Administrator for any period of time,
                    estimate emission, production, importation,
                    manufacture, or delivery levels--
                                ``(i) for covered entities with respect to
                            greenhouse gas emissions, production,
                            importation, manufacture, or delivery regulated
                            under this title to ensure that emissions,
                            production, importation, manufacture, or
                            deliveries are not underreported, and to create
                            a strong incentive for meeting data monitoring
                            and reporting requirements--
                                        ``(I) with a conservative estimate
                                    of the highest emission, production,
                                    importation, manufacture, or delivery
                                    levels that may have occurred during
                                    the period for which data are missing;
                                    or
                                        ``(II) to the extent the
                                    Administrator considers appropriate,
                                    with an estimate of such levels
                                    assuming the unit is emitting,
                                    producing, importing, manufacturing, or
                                    delivering at a maximum potential level
                                    during the period, in order to ensure
                                    that such levels are not underreported
                                    and to create a strong incentive for
                                    meeting data monitoring and reporting
                                    requirements; and
                                ``(ii) for covered entities with respect to
                            greenhouse gas emissions to which section 722
                            does not apply and for other reporting
                            entities, with a reasonable estimate of the
                            emission, production, importation, manufacture,
                            or delivery levels that may have occurred
                            during the period for which data are missing;
                        ``(P) require the designation of a designated
                    representative for each reporting entity;
                        ``(Q) require an appropriate certification, by the
                    designated representative for the reporting entity, of
                    accurate and complete accounting of greenhouse gas
                    emissions, as determined by the Administrator; and
                        ``(R) include requirements for other data necessary
                    for accurate and complete accounting of greenhouse gas
                    emissions, as determined by the Administrator,
                    including data for quality assurance of monitoring
                    systems, monitors and other measurement devices, and
                    other data needed to verify reported emissions,
                    production, importation, manufacture, or delivery.
                ``(2) Timing.--
                        ``(A) Calendar years 2007 through 2010.--For a base
                    period of calendar years 2007 through 2010, each
                    reporting entity shall submit annual data required
                    under this section to the Administrator not later than
                    March 31, 2011. The Administrator may waive or modify
                    reporting requirements for calendar years 2007 through
                    2010 for categories of reporting entities to the extent
                    that the Administrator determines that the reporting
                    entities did not keep data or records necessary to meet
                    reporting requirements. The Administrator may, in
                    addition to or in lieu of such requirements, collect
                    information on energy consumption and production.
                        ``(B) Subsequent calendar years.--For calendar year
                    2011 and each subsequent calendar year, each reporting
                    entity shall submit quarterly data required under this
                    section to the Administrator not later than 60 days
                    after the end of the applicable quarter, except when
                    the data is already being reported to the Administrator
                    on an earlier timeframe for another program.
                ``(3) Waiver of reporting requirements.--The Administrator
            may waive reporting requirements under this section for
            specific entities to the extent that the Administrator
            determines that sufficient and equally or more reliable
            verified and timely data are available to the Administrator and
            the public on the Internet under other mandatory statutory
            requirements.
                ``(4) Alternative threshold.--The Administrator may, by
            rule, establish applicability thresholds for reporting under
            this section using alternative metrics and levels, provided
            that such metrics and levels are easier to administer and cover
            the same size and type of sources as the threshold defined in
            this section.
        ``(c) Interrelationship With Other Systems.--In developing the
    regulations issued under subsection (b), the Administrator shall take
    into account the work done by the Climate Registry and other mandatory
    State or multistate programs. Such regulations shall include an
    explanation of any major differences in approach between the system
    established under the regulations and such registries and programs.

                            ``PART C--PROGRAM RULES

    ``SEC. 721. EMISSION ALLOWANCES.

        ``(a) In General.--The Administrator shall establish a separate
    quantity of emission allowances for each calendar year starting in
    2012, in the amounts prescribed under subsection (e).
        ``(b) Identification Numbers.--The Administrator shall assign to
    each emission allowance established under subsection (a) a unique
    identification number that includes the vintage year for that emission
    allowance.
        ``(c) Legal Status of Emission Allowances.--
                ``(1) In general.--An allowance established by the
            Administrator under this title does not constitute a property
            right, nor does any offset credit or other instrument
            established or issued under the American Clean Energy and
            Security Act of 2009, and the amendments made thereby, for the
            purpose of demonstrating compliance with this title.
                ``(2) Termination or limitation.--Nothing in this Act or
            any other provision of law shall be construed to limit or alter
            the authority of the United States, including the Administrator
            acting pursuant to statutory authority, to terminate or limit
            allowances, offset credits, or term offset credits.
                ``(3) Other provisions unaffected.--Except as otherwise
            specified in this Act, nothing in this Act relating to
            allowances, offset credits, or term offset credits established
            or issued under this title shall affect the application of any
            other provision of law to a covered entity, or the
            responsibility for a covered entity to comply with any such
            provision of law.
        ``(d) Savings Provision.--Nothing in this part shall be construed
    as requiring a change of any kind in any State law regulating electric
    utility rates and charges, or as affecting any State law regarding such
    State regulation, or as limiting State regulation (including any
    prudency review) under such a State law. Nothing in this part shall be
    construed as modifying the Federal Power Act or as affecting the
    authority of the Federal Energy Regulatory Commission under that Act.
    Nothing in this part shall be construed to interfere with or impair any
    program for competitive bidding for power supply in a State in which
    such program is established.
        ``(e) Allowances for Each Calendar Year.--
                ``(1) In general.--Except as provided in paragraph (2), the
            number of emission allowances established by the Administrator
            under subsection (a) for each calendar year shall be as
            provided in the following table:

    ----------------------------------------------------------------------------------------------------------------
                        ``Calendar year                                 Emission allowances (in millions)
    ----------------------------------------------------------------------------------------------------------------
    2012                                                     4,627
    ----------------------------------------------------------------------------------------------------------------
    2013                                                     4,544
    ----------------------------------------------------------------------------------------------------------------
    2014                                                     5,099
    ----------------------------------------------------------------------------------------------------------------
    2015                                                     5,003
    ----------------------------------------------------------------------------------------------------------------
    2016                                                     5,482
    ----------------------------------------------------------------------------------------------------------------
    2017                                                     5,375
    ----------------------------------------------------------------------------------------------------------------
    2018                                                     5,269
    ----------------------------------------------------------------------------------------------------------------
    2019                                                     5,162
    ----------------------------------------------------------------------------------------------------------------
    2020                                                     5,056
    ----------------------------------------------------------------------------------------------------------------
    2021                                                     4,903
    ----------------------------------------------------------------------------------------------------------------
    2022                                                     4,751
    ----------------------------------------------------------------------------------------------------------------
    2023                                                     4,599
    ----------------------------------------------------------------------------------------------------------------
    2024                                                     4,446
    ----------------------------------------------------------------------------------------------------------------
    2025                                                     4,294
    ----------------------------------------------------------------------------------------------------------------
    2026                                                     4,142
    ----------------------------------------------------------------------------------------------------------------
    2027                                                     3,990
    ----------------------------------------------------------------------------------------------------------------
    2028                                                     3,837
    ----------------------------------------------------------------------------------------------------------------
    2029                                                     3,685
    ----------------------------------------------------------------------------------------------------------------
    2030                                                     3,533
    ----------------------------------------------------------------------------------------------------------------
    2031                                                     3,408
    ----------------------------------------------------------------------------------------------------------------
    2032                                                     3,283
    ----------------------------------------------------------------------------------------------------------------
    2033                                                     3,158
    ----------------------------------------------------------------------------------------------------------------
    2034                                                     3,033
    ----------------------------------------------------------------------------------------------------------------
    2035                                                     2,908
    ----------------------------------------------------------------------------------------------------------------
    2036                                                     2,784
    ----------------------------------------------------------------------------------------------------------------
    2037                                                     2,659
    ----------------------------------------------------------------------------------------------------------------
    2038                                                     2,534
    ----------------------------------------------------------------------------------------------------------------
    2039                                                     2,409
    ----------------------------------------------------------------------------------------------------------------
    2040                                                     2,284
    ----------------------------------------------------------------------------------------------------------------
    2041                                                     2,159
    ----------------------------------------------------------------------------------------------------------------
    2042                                                     2,034
    ----------------------------------------------------------------------------------------------------------------
    2043                                                     1,910
    ----------------------------------------------------------------------------------------------------------------
    2044                                                     1,785
    ----------------------------------------------------------------------------------------------------------------
    2045                                                     1,660
    ----------------------------------------------------------------------------------------------------------------
    2046                                                     1,535
    ----------------------------------------------------------------------------------------------------------------
    2047                                                     1,410
    ----------------------------------------------------------------------------------------------------------------
    2048                                                     1,285
    ----------------------------------------------------------------------------------------------------------------
    2049                                                     1,160
    ----------------------------------------------------------------------------------------------------------------
    2050 and each year thereafter                            1,035
    ----------------------------------------------------------------------------------------------------------------

                ``(2) Revision.--
                        ``(A) In general.--The Administrator may adjust, in
                    accordance with subparagraph (B), the number of
                    emission allowances established pursuant to paragraph
                    (1) if, after notice and an opportunity for public
                    comment, the Administrator determines that--
                                ``(i) United States greenhouse gas
                            emissions in 2005 were other than 7,206 million
                            metric tons carbon dioxide equivalent;
                                ``(ii) if the requirements of this title
                            for 2012 had been in effect in 2005, section
                            722 would have required emission allowances to
                            be held for other than 66.2 percent of United
                            States greenhouse gas emissions in 2005;
                                ``(iii) if the requirements of this title
                            for 2014 had been in effect in 2005, section
                            722 would have required emission allowances to
                            be held for other than 75.7 percent of United
                            States greenhouse gas emissions in 2005; or
                                ``(iv) if the requirements of this title
                            for 2016 had been in effect in 2005, section
                            722 would have required emission allowances to
                            be held for other than 84.5 percent United
                            States greenhouse gas emissions in 2005.
                        ``(B) Adjustment formula.--
                                ``(i) In general.--If the Administrator
                            adjusts under this paragraph the number of
                            emission allowances established pursuant to
                            paragraph (1), the number of emission
                            allowances the Administrator establishes for
                            any given calendar year shall equal the product
                            of--
                                        ``(I) United States greenhouse gas
                                    emissions in 2005, expressed in tons of
                                    carbon dioxide equivalent;
                                        ``(II) the percent of United States
                                    greenhouse gas emissions in 2005,
                                    expressed in tons of carbon dioxide
                                    equivalent, that would have been
                                    subject to section 722 if the
                                    requirements of this title for the
                                    given calendar year had been in effect
                                    in 2005; and
                                        ``(III) the percentage set forth
                                    for that calendar year in section
                                    703(a), or determined under clause (ii)
                                    of this subparagraph.
                                ``(ii) Targets.--In applying the portion of
                            the formula in clause (i)(III) of this
                            subparagraph, for calendar years for which a
                            percentage is not listed in section 703(a), the
                            Administrator shall use a uniform annual
                            decline in the amount of emissions between the
                            years that are specified.
                                ``(iii) Carbon dioxide equivalent value.--
                            If the Administrator adjusts under this
                            paragraph the number of emission allowances
                            established pursuant to paragraph (1), the
                            Administrator shall use the carbon dioxide
                            equivalent values established pursuant to
                            section 712.
                                ``(iv) Limitation on adjustment timing.--
                            Once a calendar year has started, the
                            Administrator may not adjust the number of
                            emission allowances to be established for that
                            calendar year.
                        ``(C) Limitation on adjustment authority.--The
                    Administrator may adjust under this paragraph the
                    number of emission allowances to be established
                    pursuant to paragraph (1) only once.
        ``(f) Compensatory Allowance.--
                ``(1) In general.--The regulations promulgated under
            subsection (h) shall provide for the establishment and
            distribution of compensatory allowances for--
                        ``(A) the destruction, in 2012 or later, of
                    fluorinated gases that are greenhouse gases if--
                                ``(i) allowances or offset credits were
                            retired for their production or importation;
                            and
                                ``(ii) such gases are not required to be
                            destroyed under any other provision of law;
                        ``(B) the nonemissive use, in 2012 or later, of
                    petroleum-based or coal-based liquid or gaseous fuel,
                    petroleum coke, natural gas liquid, or natural gas as a
                    feedstock, if allowances or offset credits were retired
                    for the greenhouse gases that would have been emitted
                    from their combustion; and
                        ``(C) the conversionary use, in 2012 or later, of
                    fluorinated gases in a manufacturing process, including
                    semiconductor research or manufacturing, if allowances
                    or offset credits were retired for the production or
                    importation of such gas.
                ``(2) Establishment and distribution.--
                        ``(A) In general.--Not later than 90 days after the
                    end of each calendar year, the Administrator shall
                    establish and distribute to the entity taking the
                    actions described in subparagraph (A), (B), or (C) of
                    paragraph (1) a quantity of compensatory allowances
                    equivalent to the number of tons of carbon dioxide
                    equivalent of avoided emissions achieved through such
                    actions. In establishing the quantity of compensatory
                    allowances, the Administrator shall take into account
                    the carbon dioxide equivalent value of any greenhouse
                    gas resulting from such action.
                        ``(B) Source of allowances.--Compensatory
                    allowances established under this subsection shall not
                    be emission allowances established under subsection
                    (a).
                        ``(C) Identification numbers.--The Administrator
                    shall assign to each compensatory allowance established
                    under subparagraph (A) a unique identification number.
                ``(3) Definitions.--For purposes of this subsection--
                        ``(A) the term `destruction' means the conversion
                    of a greenhouse gas by thermal, chemical, or other
                    means to another gas or set of gases with little or no
                    carbon dioxide equivalent value;
                        ``(B) the term `nonemissive use' means the use of
                    fossil fuel as a feedstock in an industrial or
                    manufacturing process to the extent that greenhouse
                    gases are not emitted from such process, and to the
                    extent that the products of such process are not
                    intended for use as, or to be contained in, a fuel; and
                        ``(C) the term `conversionary use' means the
                    conversion during research or manufacturing of a
                    fluorinated gas into another greenhouse gas or set of
                    gases with a lower carbon dioxide equivalent value.
                ``(4) Feedstock emissions study.--
                        ``(A) The Administrator may conduct a study to
                    determine the extent to which petroleum-based or coal-
                    based liquid or gaseous fuel, petroleum coke, natural
                    gas liquid, or natural gas are used as feedstocks in
                    manufacturing processes to produce products and the
                    greenhouse gas emissions resulting from such uses.
                        ``(B) If as a result of such a study, the
                    Administrator determines that the use of such products
                    by noncovered sources results in substantial emissions
                    of greenhouse gases and that such emissions have not
                    been adequately addressed under other requirements of
                    this Act, the Administrator may, after notice and
                    comment rulemaking, promulgate a regulation reducing
                    compensatory allowances commensurately if doing so will
                    not result in shifting such emissions to noncovered
                    sources.
        ``(g) Fluorinated Gases Assessment.--No later than March 31, 2014,
    the Administrator shall complete an assessment of the regulation of
    non-HFC fluorinated gases under this title to determine whether the
    most appropriate point of regulation is at the gas manufacturer or
    importer level, or at the source of emissions downstream. If the
    Administrator determines, based on consideration of environmental
    effectiveness, cost effectiveness, administrative feasibility, extent
    of coverage of emissions, competitiveness and other relevant
    considerations consistent with the purposes of this title, that
    emissions of non-HFC fluorinated gases can best be regulated by
    designating downstream emission sources as covered entities with
    compliance obligations under section 722, the Administrator shall,
    after notice and comment rulemaking, change the definition of covered
    entity and the compliance obligations under section 722 with respect to
    non-HFC fluorinated gases accordingly, consistent with the purposes of
    this title, and establish such other requirements as are necessary to
    ensure compliance for such entities with the requirements of this
    title.
        ``(h) Regulations.--Not later than 24 months after the date of
    enactment of this title, the Administrator shall promulgate regulations
    to carry out the provisions of this title.

    ``SEC. 722. PROHIBITION OF EXCESS EMISSIONS.

        ``(a) Prohibition.--Except as provided in subsection (c), effective
    January 1, 2012, each covered entity is prohibited from emitting
    greenhouse gases and having attributable greenhouse gas emissions, in
    combination, in excess of its allowable emissions level. A covered
    entity's allowable emissions level for each calendar year is the number
    of emission allowances (or offset credits or other allowances as
    provided in subsection (d)) it holds as of 12:01 a.m. on April 1 (or a
    later date established by the Administrator under subsection (j)) of
    the following calendar year.
        ``(b) Methods of Demonstrating Compliance.--Except as otherwise
    provided in this section, the owner or operator of a covered entity
    shall not be considered to be in compliance with the prohibition in
    subsection (a) unless, as of 12:01 a.m. on April 1 (or a later date
    established by the Administrator under subsection (j)) of each calendar
    year starting in 2013, the owner or operator holds a quantity of
    emission allowances (or offset credits or other allowances as provided
    in subsection (d)) at least as great as the quantity calculated as
    follows:
                ``(1) Electricity sources.--For a covered entity described
            in section 700(13)(A), 1 emission allowance for each ton of
            carbon dioxide equivalent of greenhouse gas that such covered
            entity emitted in the previous calendar year, excluding
            emissions resulting from the combustion of--
                        ``(A) petroleum-based or coal-based liquid fuel;
                        ``(B) natural gas liquid;
                        ``(C) renewable biomass or gas derived from
                    renewable biomass; or
                        ``(D) petroleum coke or gas derived from petroleum
                    coke.
                ``(2) Fuel producers and importers.--For a covered entity
            described in section 700(13)(B), 1 emission allowance for each
            ton of carbon dioxide equivalent of greenhouse gas that would
            be emitted from the combustion of any petroleum-based or coal-
            based liquid fuel, petroleum coke, or natural gas liquid,
            produced or imported by such covered entity during the previous
            calendar year for sale or distribution in interstate commerce,
            assuming no capture and sequestration of any greenhouse gas
            emissions.
                ``(3) Industrial gas producers and importers.--For a
            covered entity described in section 700(13)(C), 1 emission
            allowance for each ton of carbon dioxide equivalent of fossil
            fuel-based carbon dioxide, nitrous oxide, or any other
            fluorinated gas that is a greenhouse gas (except for nitrogen
            trifluoride), or any combination thereof, produced or imported
            by such covered entity during the previous calendar year for
            sale or distribution in interstate commerce.
                ``(4) Nitrogen trifluoride sources.--For a covered entity
            described in section 700(13)(D), 1 emission allowance for each
            ton of carbon dioxide equivalent of nitrogen trifluoride that
            such covered entity emitted in the previous calendar year.
                ``(5) Geological sequestration sites.--For a covered entity
            described in section 700(13)(E), 1 emission allowance for each
            ton of carbon dioxide equivalent of greenhouse gas that such
            covered entity emitted in the previous calendar year.
                ``(6) Industrial stationary sources.--For a covered entity
            described in section 700(13)(F), (G), or (H), 1 emission
            allowance for each ton of carbon dioxide equivalent of
            greenhouse gas that such covered entity emitted in the previous
            calendar year, excluding emissions resulting from--
                        ``(A) the combustion of petroleum-based or coal-
                    based liquid fuel;
                        ``(B) the combustion of natural gas liquid;
                        ``(C) the combustion of renewable biomass or gas
                    derived from renewable biomass;
                        ``(D) the combustion of petroleum coke or gas
                    derived from petroleum coke; or
                        ``(E) the use of any fluorinated gas that is a
                    greenhouse gas purchased for use at that covered
                    entity, except for nitrogen trifluoride.
                ``(7) Industrial fossil fuel-fired combustion devices.--For
            a covered entity described in section 700(13)(I), 1 emission
            allowance for each ton of carbon dioxide equivalent of
            greenhouse gas that the devices emitted in the previous
            calendar year, excluding emissions resulting from the
            combustion of--
                        ``(A) petroleum-based or coal-based liquid fuel;
                        ``(B) natural gas liquid;
                        ``(C) renewable biomass or gas derived from
                    renewable biomass; or
                        ``(D) petroleum coke or gas derived from petroleum
                    coke.
                ``(8) Natural gas local distribution companies.--For a
            covered entity described in section 700(13)(J), 1 emission
            allowance for each ton of carbon dioxide equivalent of
            greenhouse gas that would be emitted from the combustion of the
            natural gas, and any other gas meeting the specifications for
            commingling with natural gas for purposes of delivery, that
            such entity delivered during the previous calendar year to
            customers that are not covered entities, assuming no capture
            and sequestration of that greenhouse gas.
                ``(9) Algae-based fuels.--Where carbon dioxide (or another
            greenhouse gas) generated by a covered entity is used as an
            input in the production of algae-based fuels, the Administrator
            shall ensure that emission allowances are required to be held
            either for the carbon dioxide generated by a covered entity
            that is used to grow the algae or for the portion of the carbon
            dioxide emitted from combustion of the fuel produced from such
            algae that is attributable to carbon dioxide generated by a
            covered entity, but not for both.
                ``(10) Fugitive emissions.--The greenhouse gas emissions to
            which paragraphs (1), (4), (6), and (7) apply shall not include
            fugitive emissions of greenhouse gas, except to the extent the
            Administrator determines that data on the carbon dioxide
            equivalent value of greenhouse gas in the fugitive emissions
            can be provided with sufficient precision, reliability,
            accessibility, and timeliness to ensure the integrity of
            emission allowances, the allowance tracking system, and the cap
            on emissions.
                ``(11) Export exemption.--This section shall not apply to
            any petroleum-based or coal-based liquid fuel, petroleum coke,
            natural gas liquid, fossil fuel-based carbon dioxide, nitrous
            oxide, or fluorinated gas that is exported for sale or use.
                ``(12) Natural gas liquids.--For natural gas liquids, the
            covered entity subject to the requirement stated in paragraph
            (2) shall be the owner of the natural gas liquids at the point
            the natural gas liquids are separated into merchantable
            products.
                ``(13) Application of multiple paragraphs.--For a covered
            entity to which more than 1 of paragraphs (1) through (8)
            apply, all applicable paragraphs shall apply, except that not
            more than 1 emission allowance shall be required for the same
            emission.
                ``(14) Application to fractions of tons.--In applying
            paragraphs (1) through (8), any amount less than 1 ton of
            carbon dioxide equivalent of emissions or attributable
            greenhouse gas emissions shall be treated as 1 ton of such
            carbon dioxide equivalent.
        ``(c) Phase-in of Prohibition.--
                ``(1) Industrial stationary sources.--The prohibition under
            subsection (a) shall first apply to a covered entity described
            in section 700(13)(D), (F), (G), (H), or (I), with respect to
            emissions occurring during calendar year 2014.
                ``(2) Natural gas local distribution companies.--The
            prohibition under subsection (a) shall first apply to a covered
            entity described in section 700(13)(J) with respect to
            deliveries occurring during calendar year 2016.
        ``(d) Additional Methods.--In addition to using the method of
    compliance described in subsection (b), a covered entity may do the
    following:
                ``(1) Offset credits.--
                        ``(A) In general.--Covered entities collectively
                    may, in accordance with this paragraph, use offset
                    credits to demonstrate compliance for up to a maximum
                    of 2 billion tons of greenhouse gas emissions annually.
                    The ability to demonstrate compliance with offset
                    credits shall be divided pro rata among covered
                    entities by allowing each covered entity to satisfy a
                    percentage of the number of allowances required to be
                    held under subsection (b) to demonstrate compliance by
                    holding 1 domestic offset credit or 1.25 international
                    offset credits in lieu of an emission allowance, except
                    as provided in subparagraph (D).
                        ``(B) Applicable percentage.--The percentage
                    referred to in subparagraph (A) for a given calendar
                    year shall be determined by dividing 2 billion by the
                    sum of 2 billion plus the number of emission allowances
                    established under section 721(a) for the previous year,
                    and multiplying that number by 100. Not more than one
                    half of the applicable percentage under this paragraph
                    may be used by holding domestic offset credits, and not
                    more than one half of the applicable percentage under
                    this paragraph may be used by holding international
                    offset credits, except as provided in subparagraph (C).
                        ``(C) Modified percentages.--If the Administrator
                    determines that domestic offset credits available for
                    use in demonstrating compliance in any calendar year at
                    domestic offset prices generally equal to or less than
                    emission allowance prices, are likely to offset less
                    than 0.9 billion tons of greenhouse gas emissions
                    (measured in tons of carbon dioxide equivalents), for
                    purposes of compliance demonstration in that year the
                    Administrator shall--
                                ``(i) increase the percentage of emissions
                            that can be offset through the use of
                            international offset credits to reflect the
                            amount that 1.0 billion exceeds the number of
                            domestic offset credits the Administrator
                            determines is available, at prices generally
                            equal to or less than emission allowance
                            prices, for that year, up to a maximum of 0.5
                            billion tons of greenhouse gas emissions; and
                                ``(ii) decrease the percentage of emissions
                            that can be offset through the use of domestic
                            offset credits by the same amount.
                        ``(D) International offset credits.--
                    Notwithstanding subparagraph (A), to demonstrate
                    compliance prior to calendar year 2018, a covered
                    entity may use 1 international offset credit in lieu of
                    an emission allowance up to the amount permitted under
                    this paragraph.
                        ``(E) President's recommendation.--The President
                    may make a recommendation to Congress as to whether the
                    number 2 billion specified in subparagraphs (A) and (B)
                    should be increased or decreased.
                ``(2) Term offset credits.--
                        ``(A) In general.--Covered entities may, in
                    accordance with this paragraph, use non-expired term
                    offset credits instead of domestic offset credits for
                    purposes of temporarily demonstrating compliance with
                    this section.
                        ``(B) Amount.--The combined quantity of term offset
                    credits and domestic offset credits used by a covered
                    entity to demonstrate compliance for its emissions or
                    attributable greenhouse gas emissions in any given year
                    shall not exceed the quantity of domestic offset
                    credits that a covered entity is entitled to use for
                    that year to demonstrate compliance in accordance with
                    paragraph (1).
                        ``(C) Expiration.--A term offset credit shall
                    expire in the year after its term ends. The term of a
                    term offset credit shall be calculated by adding to the
                    year of issuance the number of years equal to the
                    length of the crediting period for the practice or
                    project for which the term offset credit was issued,
                    but in no case shall be later than the date 5 years
                    from the date of issuance.
                        ``(D) Demonstrating compliance upon expiration of
                    term offset credit.--With respect to the emissions for
                    which a covered entity is using term offset credits to
                    demonstrate compliance temporarily with this section,
                    the owner or operator of a covered entity shall not be
                    considered to be in compliance with the prohibition in
                    subsection (a) unless, as of 12:01 a.m. on April 1 (or
                    a later date established by the Administrator under
                    subsection (j)) of the calendar year in which a term
                    offset credit expires, the owner or operator holds--
                                ``(i) for purposes of finally demonstrating
                            compliance, an allowance or a domestic offset
                            credit; or
                                ``(ii) for purposes of temporarily
                            demonstrating compliance, a non-expired term
                            offset credit.
                    Domestic offset credits used for purposes of finally
                    demonstrating compliance under this subparagraph shall
                    not be subject to the percentage limitations in
                    subparagraph (B).
                        ``(E) Financial assurance.--A covered entity may
                    not use a term offset credit to demonstrate compliance
                    temporarily unless it simultaneously provides to the
                    Administrator financial assurance that, at the end of
                    the term offset credit's crediting term, the covered
                    entity will have sufficient resources to obtain the
                    quantity of allowances or credits necessary to
                    demonstrate final compliance. The Administrator shall
                    issue regulations establishing requirements for such
                    financial assurance, which shall take into account the
                    increased risk associated with longer crediting terms.
                    These regulations shall take into account the total
                    number of tons of carbon dioxide equivalent of
                    greenhouse gas emissions for which a covered entity is
                    demonstrating compliance temporarily, and may set a
                    limit on this amount. In the event that a covered
                    entity that used term offset credits to demonstrate
                    compliance temporarily fails to meet the requirements
                    of subparagraph (D) at the end of the term offset
                    credits' crediting term, if the financial assurance
                    mechanism fails to provide to the Administrator the
                    number of allowances or offset credits for which the
                    crediting term has expired, then the Administrator
                    shall retire that number of allowances with the vintage
                    year 2 years after the year in which the term offset
                    credit expires in the same amount. Allowances so
                    retired shall not be counted as emission allowances
                    established for that calendar year under section
                    721(a).
                ``(3) International emission allowances.--To demonstrate
            compliance, a covered entity may hold an international emission
            allowance in lieu of an emission allowance, except as modified
            under section 728(d).
                ``(4) Compensatory allowances.--To demonstrate compliance,
            a covered entity may hold a compensatory allowance obtained
            under section 721(f) in lieu of an emission allowance.
        ``(e) Retirement of Allowances and Credits.--As soon as practicable
    after a deadline established for covered entities to demonstrate
    compliance with this title, the Administrator shall retire the quantity
    of allowances or credits required to be held under this title.
        ``(f) Alternative Metrics.--For categories of covered entities
    described in subparagraph (B), (C), (D), (G), (H), or (I) of section
    700(13), the Administrator may, by rule, establish an applicability
    threshold for inclusion under those subparagraphs using an alternative
    metric and level, provided that such metric and level are easier to
    administer and cover the same size and type of sources as the threshold
    defined in such subparagraphs.
        ``(g) Threshold Review.--For each category of covered entities
    described in subparagraph (B), (C), (D), (G), (H), or (I) of section
    700(13), the Administrator shall, in 2020 and once every 8 years
    thereafter, review the carbon dioxide equivalent emission threshold
    that is used to define covered entities in such category. After
    consideration of--
                ``(1) emissions from covered entities in such category, and
            from other entities of the same type that emit less than the
            threshold amount for the category (including emission sources
            that commence operation after the date of enactment of this
            title that are not covered entities); and
                ``(2) whether greater greenhouse gas emission reductions
            can be cost-effectively achieved by lowering the applicable
            threshold,
    the Administrator may by rule lower such threshold to not less than
    10,000 tons of carbon dioxide equivalent emissions. In determining the
    cost effectiveness of potential reductions from lowering the threshold
    for covered entities, the Administrator shall consider alternative
    regulatory greenhouse gas programs, including setting standards under
    other titles of this Act.
        ``(h) Designated Representatives.--The regulations promulgated
    under section 721(h) shall require that each covered entity, and each
    entity holding allowances or offset credits or receiving allowances or
    offset credits from the Administrator under this title, submit to the
    Administrator a certificate of representation designating a designated
    representative.
        ``(i) Education and Outreach.--
                ``(1) In general.--The Administrator shall establish and
            carry out a program of education and outreach to assist covered
            entities, especially entities having little experience with
            environmental regulatory requirements similar or comparable to
            those under this title, in preparing to meet the compliance
            obligations of this title. Such program shall include education
            with respect to using markets to effectively achieve such
            compliance.
                ``(2) Failure to receive information.--A failure to receive
            information or assistance under this subsection may not be used
            as a defense against an allegation of any violation of this
            title.
        ``(j) Adjustment of Deadline.--The Administrator may, by rule,
    establish a deadline for demonstrating compliance, for a calendar year,
    later than the date provided in subsection (a), as necessary to ensure
    the availability of emissions data, but in no event shall the deadline
    be later than June 1.
        ``(k) Notice Requirement for Covered Entities Receiving Natural Gas
    From Natural Gas Local Distribution Companies.--The owner or operator
    of a covered entity that takes delivery of natural gas from a natural
    gas local distribution company shall, not later than September 1 of
    each calendar year, notify such natural gas local distribution company
    in writing that such entity will qualify as a covered entity under this
    title for that calendar year.
        ``(l) Compliance Obligation.--For purposes of this title, the year
    of a compliance obligation is the year in which compliance is
    determined, not the year in which the greenhouse gas emissions occur or
    the covered entity has attributable greenhouse gas emissions.

    ``SEC. 723. PENALTY FOR NONCOMPLIANCE.

        ``(a) Enforcement.--A violation of any prohibition of, requirement
    of, or regulation promulgated pursuant to this title shall be a
    violation of this Act. It shall be a violation of this Act for a
    covered entity to emit greenhouse gases and have attributable
    greenhouse gas emissions, in combination, in excess of its allowable
    emissions level as provided in section 722(a). Each ton of carbon
    dioxide equivalent for which a covered entity fails to demonstrate
    compliance under section 722 shall be a separate violation. In the
    event that a covered entity fails to demonstrate compliance at the
    expiration of a term offset credit's crediting term as required by
    section 722(d)(2)(D), the year of the violation shall be the year in
    which the term offset credit expires.
        ``(b) Excess Emissions Penalty.--
                ``(1) In general.--The owner or operator of any covered
            entity that fails for any year to comply, on the deadline
            described in section 722(a), (d)(2), or (j), shall be liable
            for payment to the Administrator of an excess emissions penalty
            in the amount described in paragraph (2).
                ``(2) Amount.--The amount of an excess emissions penalty
            required to be paid under paragraph (1) shall be equal to the
            product obtained by multiplying--
                        ``(A) the tons of carbon dioxide equivalent of
                    greenhouse gas emissions or attributable greenhouse gas
                    emissions for which the owner or operator of a covered
                    entity failed to demonstrate compliance under section
                    722 on the deadline; by
                        ``(B) twice the auction clearing price for the
                    earliest vintage year emission allowances in the last
                    auction carried out pursuant to section 791 before such
                    deadline.
                ``(3) Timing.--An excess emissions penalty required under
            this subsection shall be immediately due and payable to the
            Administrator, without demand, in accordance with regulations
            promulgated by the Administrator, which shall be issued not
            later than 2 years after the date of enactment of this title.
                ``(4) No effect on liability.--An excess emissions penalty
            due and payable by the owners or operators of a covered entity
            under this subsection shall not diminish the liability of the
            owners or operators for any fine, penalty, or assessment
            against the owners or operators for the same violation under
            any other provision of this Act or any other law.
        ``(c) Excess Emissions Allowances.--The owner or operator of a
    covered entity that fails for any year to comply on the deadline
    described in section 722(a), (d)(2), or (j) shall be liable to offset
    the covered entity's excess combination of greenhouse gases emitted and
    attributable greenhouse gas emissions by an equal quantity of emission
    allowances during the following calendar year, or such longer period as
    the Administrator may prescribe. During the year in which the covered
    entity failed to comply, or any year thereafter, the Administrator may
    deduct the emission allowances required under this subsection to offset
    the covered entity's excess greenhouse gas emissions or attributable
    greenhouse gas emissions.

    ``SEC. 724. TRADING.

        ``(a) Permitted Transactions.--Except as otherwise provided in this
    title, the lawful holder of an emission allowance, compensatory
    allowance, or offset credit may, without restriction, sell, exchange,
    transfer, hold for compliance in accordance with section 722, or
    request that the Administrator retire the emission allowance,
    compensatory allowance, or offset credit.
        ``(b) No Restriction on Transactions.--The privilege of purchasing,
    holding, selling, exchanging, transferring, and requesting retirement
    of emission allowances, compensatory allowances, or offset credits
    shall not be restricted to the owners and operators of covered
    entities, except as otherwise provided in this title.
        ``(c) Effectiveness of Allowance Transfers.--No transfer of an
    allowance, offset credit, or term offset credit shall be effective for
    purposes of this title until a certification of the transfer, signed by
    the designated representative of the transferor, is received and
    recorded by the Administrator in accordance with regulations
    promulgated under section 721(h).
        ``(d) Allowance Tracking System.--The regulations promulgated under
    section 721(h) shall include a system for issuing, recording, holding,
    and tracking allowances, offset credits, and term offset credits that
    shall specify all necessary procedures and requirements for an orderly
    and competitive functioning of the allowance and offset credit markets.
    Such regulations shall provide for appropriate publication of the
    information in the system on the Internet.

    ``SEC. 725. BANKING AND BORROWING.

        ``(a) Banking.--An emission allowance may be used to comply with
    section 722 or section 723 for emissions in--
                ``(1) the vintage year for the allowance; or
                ``(2) any calendar year subsequent to the vintage year for
            the allowance.
        ``(b) Expiration.--
                ``(1) Regulations.--The Administrator may establish by
            regulation criteria and procedures for determining whether, and
            for implementing a determination that, the expiration of an
            allowance, offset credit, or term offset credit, established or
            issued under the American Clean Energy and Security Act of 2009
            or the amendments made thereby, or expiration of the ability to
            use an international emission allowance to comply with section
            722, is necessary to ensure the authenticity and integrity of
            allowances, offset credits, or term offset credits or the
            allowance tracking system.
                ``(2) General rule.--An allowance, offset credit, or term
            offset credit, established or issued under the American Clean
            Energy and Security Act of 2009 or the amendments made thereby,
            shall not expire unless--
                        ``(A) it is retired by the Administrator pursuant
                    to this title; or
                        ``(B) it is determined to expire or to have expired
                    by a specific date by the Administrator in accordance
                    with regulations promulgated under paragraph (1).
                ``(3) International emission allowances.--The ability to
            use an international emission allowance to comply with section
            722 shall not expire unless--
                        ``(A) the allowance is retired by the Administrator
                    pursuant to this title; or
                        ``(B) the ability to use such allowance to meet
                    such compliance obligation requirements is determined
                    to expire or to have expired by a specific date by the
                    Administrator in accordance with regulations
                    promulgated under paragraph (1).
        ``(c) Borrowing Future Vintage Year Allowances.--
                ``(1) Borrowing without interest.--In addition to the uses
            described in subsection (a), an emission allowance may be used
            to demonstrate compliance under section 722 or comply with
            section 723 for emissions, production, importation,
            manufacture, or deliveries in the calendar year immediately
            preceding the vintage year for the allowance.
                ``(2) Borrowing with interest.--
                        ``(A) In general.--A covered entity may demonstrate
                    compliance under section 722 in a specific calendar
                    year for up to 15 percent of its emissions by holding
                    emission allowances with a vintage year 1 to 5 years
                    later than that calendar year.
                        ``(B) Limitations.--An emission allowance borrowed
                    pursuant to this paragraph shall be an emission
                    allowance that is established by the Administrator for
                    a specific future calendar year under section 721(a)
                    and that is held by the borrower.
                        ``(C) Prepayment of interest.--For each emission
                    allowance that an owner or operator of a covered entity
                    borrows pursuant to this paragraph, such owner or
                    operator shall, at the time it borrows the allowance,
                    hold for retirement by the Administrator, and the
                    Administrator shall retire, a quantity of emission
                    allowances that is equal to the product obtained by
                    multiplying--
                                ``(i) 0.08; by
                                ``(ii) the number of years between the
                            calendar year in which the allowance is being
                            used to satisfy a compliance obligation and the
                            vintage year of the allowance.

    ``SEC. 726. STRATEGIC RESERVE.

        ``(a) Strategic Reserve Auctions.--
                ``(1) In general.--Once each quarter of each calendar year
            for which allowances are established under section 721(a), the
            Administrator shall auction strategic reserve allowances.
                ``(2) Restriction to covered entities.--In each auction
            conducted under paragraph (1), only covered entities that the
            Administrator expects will be required to comply with section
            722 in the following calendar year shall be eligible to make
            purchases.
        ``(b) Pool of Emission Allowances for Strategic Reserve Auctions.--
                ``(1) Filling the strategic reserve initially.--
                        ``(A) In general.--The Administrator shall, not
                    later than 2 years after the date of enactment of this
                    title, establish a strategic reserve account, and shall
                    place in that account an amount of emission allowances
                    established under section 721(a) for each calendar year
                    from 2012 through 2050 in the amounts specified in
                    subparagraph (B) of this paragraph.
                        ``(B) Amount.--The amount referred to in
                    subparagraph (A) shall be--
                                ``(i) for each of calendar years 2012
                            through 2019, 1 percent of the quantity of
                            emission allowances established for that year
                            pursuant to section 721(e)(1);
                                ``(ii) for each of calendar years 2020
                            through 2029, 2 percent of the quantity of
                            emission allowances established for that year
                            pursuant to section 721(e)(1); and
                                ``(iii) for each of calendar years 2030
                            through 2050, 3 percent of the quantity of
                            emission allowances established for that year
                            pursuant to section 721(e)(1).
                        ``(C) Effect on other provisions.--Any provision in
                    this title (except for subparagraph (B) of this
                    paragraph) that refers to a quantity or percentage of
                    the emission allowances established for a calendar year
                    under section 721(a) shall be considered to refer to
                    the amount of emission allowances as determined
                    pursuant to section 721(e), less any emission
                    allowances established for that year that are placed in
                    the strategic reserve account under this paragraph.
                ``(2) Supplementing the strategic reserve.--The
            Administrator shall also--
                        ``(A) at the end of each calendar year, transfer to
                    the strategic reserve account each emission allowance
                    that was offered for sale but not sold at any auction
                    conducted under section 791; and
                        ``(B) deposit emission allowances established under
                    subsection (g) from auction proceeds into the strategic
                    reserve, to the extent necessary to maintain the
                    reserve at its original size.
        ``(c) Minimum Strategic Reserve Auction Price.--
                ``(1) In general.--At each strategic reserve auction, the
            Administrator shall offer emission allowances for sale
            beginning at a minimum price per emission allowance, which
            shall be known as the `minimum strategic reserve auction
            price'.
                ``(2) Initial minimum strategic reserve auction prices.--
            The minimum strategic reserve auction price shall be $28 (in
            constant 2009 dollars) for the strategic reserve auctions held
            in 2012. For the strategic reserve auctions held in 2013 and
            2014, the minimum strategic reserve auction price shall be the
            strategic reserve auction price for the previous year increased
            by 5 percent plus the rate of inflation (as measured by the
            Consumer Price Index for All Urban Consumers).
                ``(3) Minimum strategic reserve auction price in subsequent
            years.--For each strategic reserve auction held in 2015 and
            each year thereafter, the minimum strategic reserve auction
            price shall be 60 percent above a rolling 36-month average of
            the daily closing price for that year's emission allowance
            vintage as reported on registered carbon trading facilities,
            calculated using constant dollars.
        ``(d) Quantity of Emission Allowances Released From the Strategic
    Reserve.--
                ``(1) Initial limits.--For each of calendar years 2012
            through 2016, the annual limit on the number of emission
            allowances from the strategic reserve account that may be
            auctioned is an amount equal to 5 percent of the emission
            allowances established for that calendar year under section
            721(a). This limit does not apply to international offset
            credits sold on consignment pursuant to subsection (h).
                ``(2) Limits in subsequent years.--For calendar year 2017
            and each year thereafter, the annual limit on the number of
            emission allowances from the strategic reserve account that may
            be auctioned is an amount equal to 10 percent of the emission
            allowances established for that calendar year under section
            721(a). This limit does not apply to international offset
            credits sold on consignment pursuant to subsection (h).
                ``(3) Allocation of limitation.--One-fourth of each year's
            annual strategic reserve auction limit under this subsection
            shall be made available for auction in each quarter. Any
            allowances from the strategic reserve account that are made
            available for sale in a quarterly auction and not sold shall be
            rolled over and added to the quantity available for sale in the
            following quarter, except that allowances not sold at auction
            in the fourth quarter of a year shall not be rolled over to the
            following calendar year's auctions, but shall be returned to
            the strategic reserve account.
        ``(e) Purchase Limit.--
                ``(1) In general.--Except as provided in paragraph (2) or
            (3), the annual number of emission allowances that a covered
            entity may purchase at the strategic reserve auctions in each
            calendar year shall not exceed 20 percent of the covered
            entity's combined greenhouse gas emissions and attributable
            greenhouse gas emissions during the most recent year for which
            allowances or offset credits were retired under section 722.
                ``(2) 2012 limit.--For calendar year 2012, the maximum
            aggregate number of emission allowances that a covered entity
            may purchase from that year's strategic reserve auctions shall
            be 20 percent of the covered entity's combined greenhouse gas
            emissions and attributable greenhouse gas emissions that the
            covered entity reported to the registry established under
            section 713 for 2011 and that would be subject to section
            722(a) if occurring in later calendar years.
                ``(3) New entrants.--The Administrator shall, by
            regulation, establish a separate purchase limit applicable to
            entities that expect to become a covered entity in the year of
            the auction, permitting them to purchase emission allowances at
            the strategic reserve auctions in their first calendar year of
            operation in an amount of at least 20 percent of their expected
            combined greenhouse gas emissions and attributable greenhouse
            gas emissions for that year.
        ``(f) Delegation or Contract.--Pursuant to regulations under this
    section, the Administrator may, by delegation or contract, provide for
    the conduct of strategic reserve auctions under the Administrator's
    supervision by other departments or agencies of the Federal Government
    or by nongovernmental agencies, groups, or organizations.
        ``(g) Use of Auction Proceeds.--
                ``(1) Deposit in strategic reserve fund.--The proceeds from
            strategic reserve auctions shall be placed in the Strategic
            Reserve Fund established under section 793(1), and shall be
            available without further appropriation or fiscal year
            limitation for the purposes described in this subsection.
                ``(2) International offset credits for reduced
            deforestation.--The Administrator shall use the proceeds from
            each strategic reserve auction to purchase international offset
            credits issued for reduced deforestation activities pursuant to
            section 743(e). The Administrator shall retire those
            international offset credits and establish a number of emission
            allowances equal to 80 percent of the number of international
            offset credits so retired. Emission allowances established
            under this paragraph shall be in addition to those established
            under section 721(a).
                ``(3) Emission allowances.--The Administrator shall deposit
            emission allowances established under paragraph (2) in the
            strategic reserve, except that, with respect to any such
            emission allowances in excess of the amount necessary to fill
            the strategic reserve to its original size, the Administrator
            shall--
                        ``(A) except as provided in subparagraph (B),
                    assign a vintage year to the emission allowance, which
                    shall be no earlier than the year in which the
                    allowance is established under paragraph (2), and shall
                    treat such allowances as ones that are not designated
                    for distribution or auction for purposes of section
                    782(q) and (r); and
                        ``(B) to the extent any such allowances cannot be
                    assigned a vintage year because of the limitation in
                    paragraph (4), retire the allowances.
                ``(4) Limitation.--In no case may the Administrator assign
            under paragraph (3)(A) more emission allowances to a vintage
            year than the number of emission allowances from that vintage
            year that were placed in the strategic reserve account under
            subsection (b)(1).
        ``(h) Availability of International Offset Credits for Auction.--
                ``(1) In general.--The regulations promulgated under
            section 721(h) shall allow any entity holding international
            offset credits from reduced deforestation issued under section
            743(e) to request that the Administrator include such offset
            credits in an upcoming strategic reserve auction. The
            regulations shall provide that--
                        ``(A) such international offset credits will be
                    used to fill bid orders only after the supply of
                    strategic reserve allowances available for sale at that
                    auction has been depleted;
                        ``(B) international offset credits may be sold at a
                    strategic reserve auction under this subsection only if
                    the Administrator determines that it is highly likely
                    that covered entities will, to cover emissions
                    occurring in the year the auction is held, use offset
                    credits to demonstrate compliance under section 722 for
                    emissions equal to or greater than 80 percent of 2
                    billion tons of carbon dioxide equivalent;
                        ``(C) upon sale of such international offset
                    credits, the Administrator shall retire those
                    international offset credits, and establish and provide
                    to the purchasers a number of emission allowances equal
                    to 80 percent of the number of international offset
                    credits so retired, which allowances shall be in
                    addition to those established under section 721(a); and
                        ``(D) for international offset credits sold
                    pursuant to this subsection, the proceeds for the
                    entity that offered the international offset credits
                    for sale shall be the lesser of--
                                ``(i) the average daily closing price for
                            international offset credits sold on registered
                            exchanges (or if such price is unavailable, the
                            average price as determined by the
                            Administrator) during the six months prior to
                            the strategic reserve auction at which they
                            were auctioned, with the remaining funds
                            collected upon the sale of the international
                            offset credits deposited in the Treasury; and
                                ``(ii) the amount received for the
                            international offset credits at the auction.
                ``(2) Proceeds.--For international offset credits sold
            pursuant to this subsection, notwithstanding section 3302 of
            title 31, United States Code, or any other provision of law,
            within 90 days of receipt, the United States shall transfer the
            proceeds from the auction, as defined in paragraph (1)(D), to
            the entity that offered the international offset credits for
            sale. No funds transferred from a purchaser to a seller of
            international offset credits under this paragraph shall be held
            by any officer or employee of the United States or treated for
            any purpose as public monies.
                ``(3) Pricing.--When the Administrator acts under this
            subsection as the agent of an entity in possession of
            international offset credits, the Administrator is not
            obligated to obtain the highest price possible for the
            international offset credits, and instead shall auction such
            international offset credits in the same manner and pursuant to
            the same rules (except as modified in paragraph (1)) as set
            forth for auctioning strategic reserve allowances. Entities
            requesting that such international offset credits be offered
            for sale at a strategic reserve auction may not set a minimum
            reserve price for their international offset credits that is
            different than the minimum strategic reserve auction price set
            pursuant to subsection (c).
        ``(i) Initial Regulations.--Not later than 24 months after the date
    of enactment of this title, the Administrator shall promulgate
    regulations, in consultation with other appropriate agencies, governing
    the auction of allowances under this section. Such regulations shall
    include the following requirements:
                ``(1) Frequency; first auction.--Auctions shall be held
            four times per year at regular intervals, with the first
            auction to be held no later than March 31, 2012.
                ``(2) Auction format.--Auctions shall follow a single-
            round, sealed-bid, uniform price format.
                ``(3) Participation; financial assurance.--Auctions shall
            be open to any covered entity eligible to purchase emission
            allowances at the auction under subsection (a)(2), except that
            the Administrator may establish financial assurance
            requirements to ensure that auction participants can and will
            perform on their bids.
                ``(4) Disclosure of beneficial ownership.--Each bidder in
            an auction shall be required to disclose the person or entity
            sponsoring or benefitting from the bidder's participation in
            the auction if such person or entity is, in whole or in part,
            other than the bidder.
                ``(5) Purchase limits.--No person may, directly or in
            concert with another participant, purchase more than 20 percent
            of the allowances offered for sale at any quarterly auction.
                ``(6) Publication of information.--After the auction, the
            Administrator shall, in a timely fashion, publish the
            identities of winning bidders, the quantity of allowances
            obtained by each winning bidder, and the auction clearing
            price.
                ``(7) Other requirements.--The Administrator may include in
            the regulations such other requirements or provisions as the
            Administrator, in consultation with other agencies as
            appropriate, considers appropriate to promote effective,
            efficient, transparent, and fair administration of auctions
            under this section.
        ``(j) Revision of Regulations.--The Administrator may, at any time,
    in consultation with other agencies as appropriate, revise the initial
    regulations promulgated under subsection (i) by promulgating new
    regulations. Such revised regulations need not meet the requirements
    identified in subsection (i) if the Administrator determines that an
    alternative auction design would be more effective, taking into account
    factors including costs of administration, transparency, fairness, and
    risks of collusion or manipulation. In determining whether and how to
    revise the initial regulations under this subsection, the Administrator
    shall not consider maximization of revenues to the Federal Government.

    ``SEC. 727. PERMITS.

        ``(a) Permit Program.--For stationary sources subject to title V of
    this Act that are covered entities, the provisions of this title shall
    be implemented by permits issued to such covered entities (and
    enforced) in accordance with the provisions of title V, as modified by
    this title. Any such permit issued by the Administrator, or by a State
    or Indian tribe with an approved permit program, shall require the
    owner or operator of a covered entity to hold allowances or offset
    credits at least equal to the total annual amount of carbon dioxide
    equivalents for its combined emissions and attributable greenhouse gas
    emissions to which section 722 applies. No such permit shall be issued
    that is inconsistent with the requirements of this title, and title V
    as applicable. Nothing in this section regarding compliance plans or in
    title V shall be construed as affecting allowances or offset credits.
    Submission of a statement by the owner or operator, or the designated
    representative of the owners and operators, of a covered entity that
    the owners and operators will hold allowances or offset credits for the
    entity's combined emissions and attributable greenhouse gas emissions
    to which section 722 applies shall be deemed to meet the proposed and
    approved planning requirements of title V. Recordation by the
    Administrator of transfers of allowances and offset credits shall amend
    automatically all applicable proposed or approved permit applications,
    compliance plans, and permits.
        ``(b) Multiple Owners.--No permit shall be issued under this
    section and no allowances or offset credits shall be disbursed under
    this title to a covered entity or any other person until the designated
    representative of the owners or operators has filed a certificate of
    representation with regard to matters under this title, including the
    holding and distribution of emission allowances and the proceeds of
    transactions involving emission allowances. Where there are multiple
    holders of a legal or equitable title to, or a leasehold interest in,
    such a covered entity or other entity or where a utility or industrial
    customer purchases power under a long-term power purchase contract from
    an independent power production facility that is a covered entity, the
    certificate shall state--
                ``(1) that emission allowances and the proceeds of
            transactions involving emission allowances will be deemed to be
            held or distributed in proportion to each holder's legal,
            equitable, leasehold, or contractual reservation or
            entitlement; or
                ``(2) if such multiple holders have expressly provided for
            a different distribution of emission allowances by contract,
            that emission allowances and the proceeds of transactions
            involving emission allowances will be deemed to be held or
            distributed in accordance with the contract.
    A passive lessor, or a person who has an equitable interest through
    such lessor, whose rental payments are not based, either directly or
    indirectly, upon the revenues or income from the covered entity or
    other entity shall not be deemed to be a holder of a legal, equitable,
    leasehold, or contractual interest for the purpose of holding or
    distributing emission allowances as provided in this subsection, during
    either the term of such leasehold or thereafter, unless expressly
    provided for in the leasehold agreement. Except as otherwise provided
    in this subsection, where all legal or equitable title to or interest
    in a covered entity, or other entity, is held by a single person, the
    certificate shall state that all emission allowances received by the
    entity are deemed to be held for that person.
        ``(c) Prohibition.--It shall be unlawful for any person to operate
    any stationary source subject to the requirements of this section
    except in compliance with the terms and requirements of a permit issued
    by the Administrator or a State or Indian tribe with an approved permit
    program in accordance with this section. For purposes of this
    subsection, compliance, as provided in section 504(f), with a permit
    issued under title V which complies with this title for covered
    entities shall be deemed compliance with this subsection as well as
    section 502(a).
        ``(d) Reliability.--Nothing in this section or title V shall be
    construed as requiring termination of operations of a stationary source
    that is a covered entity for failure to have an approved permit, or
    compliance plan, that is consistent with the requirements in the second
    and fifth sentences of subsection (a) concerning the holding of
    allowances or offset credits, except that any such covered entity may
    be subject to the applicable enforcement provision of section 113.
        ``(e) Regulations.--Not later than 2 years after the date of
    enactment of this title, the Administrator shall promulgate regulations
    to implement this section. To provide for permits required under this
    section, each State in which one or more stationary sources that are
    covered entities are located shall submit, in accordance with this
    section and title V, revised permit programs for approval.

    ``SEC. 728. INTERNATIONAL EMISSION ALLOWANCES.

        ``(a) Qualifying Programs.--The Administrator, in consultation with
    the Secretary of State, may by rule designate an international climate
    change program as a qualifying international program if--
                ``(1) the program is run by a national or supranational
            foreign government, and imposes a mandatory absolute tonnage
            limit on greenhouse gas emissions from 1 or more foreign
            countries, or from 1 or more economic sectors in such a country
            or countries; and
                ``(2) the program is at least as stringent as the program
            established by this title, including provisions to ensure at
            least comparable monitoring, compliance, enforcement, quality
            of offsets, and restrictions on the use of offsets.
        ``(b) Disqualified Allowances.--An international emission allowance
    may not be held under section 722(d)(2) if it is in the nature of an
    offset instrument or allowance awarded based on the achievement of
    greenhouse gas emission reductions or avoidance, or greenhouse gas
    sequestration, that are not subject to the mandatory absolute tonnage
    limits referred to in subsection (a)(1).
        ``(c) Retirement.--
                ``(1) Entity certification.--The owner or operator of an
            entity that holds an international emission allowance under
            section 722(d)(2) shall certify to the Administrator that such
            international emission allowance has not previously been used
            to comply with any foreign, international, or domestic
            greenhouse gas regulatory program.
                ``(2) Retirement.--
                        ``(A) Foreign and international regulatory
                    entities.--The Administrator, in consultation with the
                    Secretary of State, shall seek, by whatever means
                    appropriate, including agreements and technical
                    cooperation on allowance tracking, to ensure that any
                    relevant foreign, international, and domestic
                    regulatory entities--
                                ``(i) are notified of the use, for purposes
                            of compliance with this title, of any
                            international emission allowance; and
                                ``(ii) provide for the disqualification of
                            such international emission allowance for any
                            subsequent use under the relevant foreign,
                            international, or domestic greenhouse gas
                            regulatory program, regardless of whether such
                            use is a sale, exchange, or submission to
                            satisfy a compliance obligation.
                        ``(B) Disqualification from further use.--The
                    Administrator shall ensure that, once an international
                    emission allowance has been disqualified or otherwise
                    used for purposes of compliance with this title, such
                    allowance shall be disqualified from any further use
                    under this title.
        ``(d) Use Limitations.--The Administrator may, by rule, apply a
    limit to the percentage of the combined greenhouse gas emissions and
    attributable greenhouse gas emissions of a covered entity with respect
    to which compliance may be demonstrated by holding international
    emission allowances under section 722(d)(2), consistent with the
    purposes of the Safe Climate Act.

                               ``PART D--OFFSETS

    ``SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD.

        ``(a) Establishment.--Not later than 30 days after the date of
    enactment of this title, the Administrator shall establish an
    independent Offsets Integrity Advisory Board. The Advisory Board shall
    make recommendations to the Administrator for use in promulgating and
    revising regulations under this part and part E, and for ensuring the
    overall environmental integrity of the programs established pursuant to
    those regulations.
        ``(b) Membership.--The Advisory Board shall be comprised of at
    least nine members. Each member shall be qualified by education,
    training, and experience to evaluate scientific and technical
    information on matters referred to the Board under this section. The
    Administrator shall appoint Advisory Board members, including a chair
    and vice-chair of the Advisory Board. Terms shall be 3 years in length,
    except for initial terms, which may be up to 5 years in length to allow
    staggering. Members may be reappointed only once for an additional 3-
    year term, and such second term may follow directly after a first term.
        ``(c) Activities.--The Advisory Board established pursuant to
    subsection (a) shall--
                ``(1) provide recommendations, not later than 90 days after
            the Advisory Board's establishment and periodically thereafter,
            to the Administrator regarding offset project types that should
            be considered for eligibility under section 733, taking into
            consideration relevant scientific and other issues, including--
                        ``(A) the availability of a representative data set
                    for use in developing the activity baseline;
                        ``(B) the potential for accurate quantification of
                    greenhouse gas reduction, avoidance, or sequestration
                    for an offset project type;
                        ``(C) the potential level of scientific and
                    measurement uncertainty associated with an offset
                    project type; and
                        ``(D) any beneficial or adverse environmental,
                    public health, welfare, social, economic, or energy
                    effects associated with an offset project type;
                ``(2) make available to the Administrator its advice and
            comments on offset methodologies that should be considered
            under regulations promulgated with respect to section 734,
            including methodologies to address the issues of additionality,
            activity baselines, quantification methods, leakage,
            uncertainty, permanence, and environmental integrity;
                ``(3) make available to the Administrator, and other
            relevant Federal agencies, its advice and comments regarding
            scientific, technical, and methodological issues specific to
            the issuance of international offset credits under section 743;
                ``(4) make available to the Administrator, and other
            relevant Federal agencies, its advice and comments regarding
            scientific, technical, and methodological issues associated
            with the implementation of part E;
                ``(5) make available to the Administrator its advice and
            comments on areas in which further knowledge is required to
            appraise the adequacy of existing, revised, or proposed
            methodologies for use under this part and part E, and describe
            the research efforts necessary to provide the required
            information; and
                ``(6) make available to the Administrator its advice and
            comments on other ways to improve or safeguard the
            environmental integrity of programs established under this part
            and part E.
        ``(d) Scientific Review of Offset and Deforestation Reduction
    Programs.--Not later than January 1, 2017, and at 5-year intervals
    thereafter, the Advisory Board shall submit to the Administrator and
    make available to the public an analysis of relevant scientific and
    technical information related to this part and part E. The Advisory
    Board shall review approved and potential methodologies, scientific
    studies, offset project monitoring, offset project verification
    reports, and audits related to this part and part E, and evaluate the
    net emissions effects of implemented offset projects. The Advisory
    Board shall recommend changes to offset methodologies, protocols, or
    project types, or to the overall offset program under this part, to
    ensure that offset credits issued by the Administrator do not
    compromise the integrity of the annual emission reductions established
    under section 703, and to avoid or minimize adverse effects to human
    health or the environment.

    ``SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM.

        ``(a) Regulations.--Not later than 2 years after the date of
    enactment of this title, the Administrator, in consultation with
    appropriate Federal agencies and taking into consideration the
    recommendations of the Advisory Board, shall promulgate regulations
    establishing a program for the issuance of offset credits in accordance
    with the requirements of this part. The Administrator shall
    periodically revise these regulations as necessary to meet the
    requirements of this part.
        ``(b) Requirements.--The regulations described in subsection (a)
    shall--
                ``(1) authorize the issuance of offset credits with respect
            to qualifying offset projects that result in reductions or
            avoidance of greenhouse gas emissions, or sequestration of
            greenhouse gases;
                ``(2) ensure that such offset credits represent verifiable
            and additional greenhouse gas emission reductions or avoidance,
            or increases in sequestration;
                ``(3) ensure that offset credits issued for sequestration
            offset projects are only issued for greenhouse gas reductions
            that are permanent;
                ``(4) provide for the implementation of the requirements of
            this part; and
                ``(5) include as reductions in greenhouse gases reductions
            achieved through the destruction of methane and its conversion
            to carbon dioxide, and reductions achieved through destruction
            of chlorofluorocarbons or other ozone depleting substances, if
            permitted by the Administrator under section 619(b)(9) and
            subject to the conditions specified in section 619(b)(9), based
            on the carbon dioxide equivalent value of the substance
            destroyed.
        ``(c) Coordination to Minimize Negative Effects.--In promulgating
    and implementing regulations under this part, the Administrator 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 part.
        ``(d) Offset Registry.--The Administrator shall establish within
    the allowance tracking system established under section 724(d) an
    Offset Registry for qualifying offset projects and offset credits
    issued with respect thereto under this part.
        ``(e) Legal Status of Offset Credit.--An offset credit does not
    constitute a property right.
        ``(f) Fees.--The Administrator shall assess fees payable by offset
    project developers in an amount necessary to cover the administrative
    costs to the Environmental Protection Agency of carrying out the
    activities under this part. Amounts collected for such fees shall be
    available to the Administrator for carrying out the activities under
    this part to the extent provided in advance in appropriations Acts.

    ``SEC. 733. ELIGIBLE PROJECT TYPES.

        ``(a) List of Eligible Project Types.--
                ``(1) In general.--As part of the regulations promulgated
            under section 732(a), the Administrator shall establish, and
            may periodically revise, a list of types of projects eligible
            to generate offset credits, including international offset
            credits, under this part.
                ``(2) Advisory board recommendations.--In determining the
            eligibility of project types, the Administrator shall take into
            consideration the recommendations of the Advisory Board. If a
            list established under this section differs from the
            recommendations of the Advisory Board, the regulations
            promulgated under section 732(a) shall include a justification
            for the discrepancy.
                ``(3) Initial determination.--The Administrator shall
            establish the initial eligibility list under paragraph (1) not
            later than 1 year after the date of enactment of this title.
            The Administrator shall add additional project types to the
            list not later than 2 years after the date of enactment of this
            title. In determining the initial list, the Administrator shall
            give priority to consideration of offset project types that are
            recommended by the Advisory Board and for which there are well
            developed methodologies that the Administrator determines would
            meet the criteria of section 734, with such modifications as
            the Administrator deems appropriate. In establishing
            methodologies pursuant to section 734, the Administrator shall
            give priority to methodologies for offset project types
            included on the initial eligibility list.
        ``(b) Modification of List.--The Administrator--
                ``(1) may at any time, by rule, add a project type to the
            list established under subsection (a) if the Administrator, in
            consultation with appropriate Federal agencies and taking into
            consideration the recommendations of the Advisory Board,
            determines that the project type can generate additional
            reductions or avoidance of greenhouse gas emissions, or
            sequestration of greenhouse gases, subject to the requirements
            of this part;
                ``(2) may at any time, by rule, determine that a project
            type on the list does not meet the requirements of this part,
            and remove the project type from the list established under
            subsection (a), in consultation with appropriate Federal
            agencies and taking into consideration any recommendations of
            the Advisory Board; and
                ``(3) shall consider adding to or removing from the list
            established under subsection (a), at a minimum, project types
            proposed to the Administrator--
                        ``(A) by petition pursuant to subsection (c); or
                        ``(B) by the Advisory Board.
        ``(c) Petition Process.--Any person may petition the Administrator
    to modify the list established under subsection (a) by adding or
    removing a project type pursuant to subsection (b). Any such petition
    shall include a showing by the petitioner that there is adequate data
    to establish that the project type does or does not meet the
    requirements of this part. Not later than 12 months after receipt of
    such a petition, the Administrator shall either grant or deny the
    petition and publish a written explanation of the reasons for the
    Administrator's decision. The Administrator may not deny a petition
    under this subsection on the basis of inadequate Environmental
    Protection Agency resources or time for review.

    ``SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS.

        ``(a) Methodologies.--As part of the regulations promulgated under
    section 732(a), the Administrator shall establish, for each type of
    offset project listed as eligible under section 733, the following:
                ``(1) Additionality.--A standardized methodology for
            determining the additionality of greenhouse gas emission
            reductions or avoidance, or greenhouse gas sequestration,
            achieved by an offset project of that type. Such methodology
            shall ensure, at a minimum, that any greenhouse gas emission
            reduction or avoidance, or any greenhouse gas sequestration, is
            considered additional only to the extent that it results from
            activities that--
                        ``(A) are not required by or undertaken to comply
                    with any law, including any regulation or consent
                    order;
                        ``(B) were not commenced prior to January 1, 2009,
                    except in the case of--
                                ``(i) offset project activities that
                            commenced after January 1, 2001, and were
                            registered as of the date of enactment of this
                            title under an offset program with respect to
                            which the Administrator has made an affirmative
                            determination under section 740(a)(2); or
                                ``(ii) activities that are readily
                            reversible, with respect to which the
                            Administrator may set an alternative earlier
                            date under this subparagraph that is not
                            earlier than January 1, 2001, where the
                            Administrator determines that setting such an
                            alternative date may produce an environmental
                            benefit by removing an incentive to cease and
                            then reinitiate activities that began prior to
                            January 1, 2009; and
                        ``(C) exceed the activity baseline established
                    under paragraph (2).
                ``(2) Activity baselines.--A standardized methodology for
            establishing activity baselines for offset projects of that
            type. The Administrator shall set activity baselines to reflect
            a conservative estimate of business-as-usual performance or
            practices for the relevant type of activity such that the
            baseline provides an adequate margin of safety to ensure the
            environmental integrity of offsets calculated in reference to
            such baseline.
                ``(3) Quantification methods.--A standardized methodology
            for determining the extent to which greenhouse gas emission
            reductions or avoidance, or greenhouse gas sequestration,
            achieved by an offset project of that type exceed a relevant
            activity baseline, including protocols for monitoring and
            accounting for uncertainty.
                ``(4) Leakage.--A standardized methodology for accounting
            for and mitigating potential leakage, if any, from an offset
            project of that type, taking uncertainty into account.
        ``(b) Accounting for Reversals.--
                ``(1) In general.--For each type of sequestration project
            listed under section 733, the Administrator shall establish
            requirements to account for and address reversals, including--
                        ``(A) a requirement to report any reversal with
                    respect to an offset project for which offset credits
                    have been issued under this part;
                        ``(B) provisions to require emission allowances to
                    be held in amounts to fully compensate for greenhouse
                    gas emissions attributable to reversals, and to assign
                    responsibility for holding such emission allowances;
                    and
                        ``(C) any other provisions the Administrator
                    determines necessary to account for and address
                    reversals.
                ``(2) Mechanisms.--The Administrator shall prescribe
            mechanisms to ensure that any sequestration with respect to
            which an offset credit is issued under this part results in a
            permanent net increase in sequestration, and that full account
            is taken of any actual or potential reversal of such
            sequestration, with an adequate margin of safety. The
            Administrator shall prescribe at least one of the following
            mechanisms to meet the requirements of this paragraph:
                        ``(A) An offsets reserve, pursuant to paragraph
                    (3).
                        ``(B) Insurance that provides for purchase and
                    provision to the Administrator for retirement of an
                    amount of offset credits or emission allowances equal
                    in number to the tons of carbon dioxide equivalents of
                    greenhouse gas emissions released due to reversal.
                        ``(C) Another mechanism that the Administrator
                    determines satisfies the requirements of this part.
                ``(3) Offsets reserve.--
                        ``(A) In general.--An offsets reserve referred to
                    in paragraph (2)(A) is a program under which, before
                    issuance of offset credits under this part, the
                    Administrator shall subtract and reserve from the
                    quantity to be issued a quantity of offset credits
                    based on the risk of reversal. The Administrator
                    shall--
                                ``(i) hold these reserved offset credits in
                            the offsets reserve; and
                                ``(ii) register the holding of the reserved
                            offset credits in the Offset Registry
                            established under section 732(d).
                        ``(B) Project reversal.--
                                ``(i) In general.--If a reversal has
                            occurred with respect to an offset project for
                            which offset credits are reserved under this
                            paragraph, the Administrator shall retire
                            offset credits or emission allowances from the
                            offsets reserve to fully account for the tons
                            of carbon dioxide equivalent that are no longer
                            sequestered.
                                ``(ii) Intentional reversals.--If the
                            Administrator determines that a reversal was
                            intentional, the offset project developer for
                            the relevant offset project shall place into
                            the offsets reserve a quantity of offset
                            credits, or combination of offset credits and
                            emission allowances, equal in number to the
                            number of reserve offset credits that were
                            canceled due to the reversal pursuant to clause
                            (i).
                                ``(iii) Unintentional reversals.--If the
                            Administrator determines that a reversal was
                            unintentional, the offset project developer for
                            the relevant offset project shall place into
                            the offsets reserve a quantity of offset
                            credits, or combination of offset credits and
                            emission allowances, equal in number to half
                            the number of offset credits that were reserved
                            for that offset project, or half the number of
                            reserve offset credits that were canceled due
                            to the reversal pursuant to clause (i),
                            whichever is less.
                        ``(C) Use of reserved offset credits.--Offset
                    credits placed into the offsets reserve under this
                    paragraph may not be used to comply with section 722.
        ``(c) Crediting Periods.--
                ``(1) In general.--For each offset project type, the
            Administrator shall specify a crediting period, and establish
            provisions for petitions for new crediting periods, in
            accordance with this subsection.
                ``(2) Duration.--The crediting period shall be no less than
            5 and no greater than 10 years for any project type other than
            those involving sequestration.
                ``(3) Eligibility.--An offset project shall be eligible to
            generate offset credits under this part only during the
            project's crediting period. During such crediting period, the
            project shall remain eligible to generate offset credits,
            subject to the methodologies and project type eligibility list
            that applied as of the date of project approval under section
            735, except as provided in paragraph (4) of this subsection.
                ``(4) Petition for new crediting period.--An offset project
            developer may petition for a new crediting period to commence
            after termination of a crediting period, subject to the
            methodologies and project type eligibility list in effect at
            the time when such petition is submitted. A petition may not be
            submitted under this paragraph more than 18 months before the
            end of the pending crediting period. The Administrator may
            limit the number of new crediting periods available for
            projects of particular project types.
        ``(d) Environmental Integrity.--In establishing the requirements
    under this section, the Administrator shall apply conservative
    assumptions or methods to maximize the certainty that the environmental
    integrity of the cap established under section 703 is not compromised.
        ``(e) Pre-existing Methodologies.--In promulgating requirements
    under this section, the Administrator shall give due consideration to
    methodologies for offset projects existing as of the date of enactment
    of this title.
        ``(f) Added Project Types.--The Administrator shall establish
    methodologies described in subsection (a), and, as applicable,
    requirements and mechanisms for reversals as described in subsection
    (b), for any project type that is added to the list pursuant to section
    733.

    ``SEC. 735. APPROVAL OF OFFSET PROJECTS.

        ``(a) Approval Petition.--An offset project developer shall submit
    an offset project approval petition providing such information as the
    Administrator requires to determine whether the offset project is
    eligible for issuance of offset credits under rules promulgated
    pursuant to this part.
        ``(b) Timing.--An approval petition shall be submitted to the
    Administrator under subsection (a) no later than the time at which an
    offset project's first verification report is submitted under section
    736.
        ``(c) Approval Petition Requirements.--As part of the regulations
    promulgated under section 732, the Administrator shall include
    provisions for, and shall specify, the required components of an offset
    project approval petition required under subsection (a), which shall
    include--
                ``(1) designation of an offset project developer; and
                ``(2) any other information that the Administrator
            considers to be necessary to achieve the purposes of this part.
        ``(d) Approval and Notification.--Not later than 90 days after
    receiving a complete approval petition under subsection (a), the
    Administrator shall make the approval petition publicly available,
    approve or deny the petition in writing and if the petition is denied,
    provide the reasons for denial, and make the Administrator's written
    decision publicly available. After an offset project is approved, the
    offset project developer shall not be required to resubmit an approval
    petition during the offset project's crediting period, except as
    provided in section 734(c)(4).
        ``(e) Appeal.--The Administrator shall establish procedures for
    appeal and review of determinations made under subsection (d).
        ``(f) Voluntary Preapproval Review.--The Administrator may
    establish a voluntary preapproval review procedure, to allow an offset
    project developer to request the Administrator to conduct a preliminary
    eligibility review for an offset project. Findings of such reviews
    shall not be binding upon the Administrator. The voluntary preapproval
    review procedure--
                ``(1) shall require the offset project developer to submit
            such basic project information as the Administrator requires to
            provide a meaningful review; and
                ``(2) shall require a response from the Administrator not
            later than 6 weeks after receiving a request for review under
            this subsection.

    ``SEC. 736. VERIFICATION OF OFFSET PROJECTS.

        ``(a) In General.--As part of the regulations promulgated under
    section 732(a), the Administrator shall establish requirements,
    including protocols, for verification of the quantity of greenhouse gas
    emission reductions or avoidance, or sequestration of greenhouse gases,
    resulting from an offset project. The regulations shall require that an
    offset project developer shall submit a report, prepared by a third-
    party verifier accredited under subsection (d), providing such
    information as the Administrator requires to determine the quantity of
    greenhouse gas emission reductions or avoidance, or sequestration of
    greenhouse gases, resulting from the offset project.
        ``(b) Schedule.--The Administrator shall prescribe a schedule for
    the submission of verification reports under subsection (a).
        ``(c) Verification Report Requirements.--The Administrator shall
    specify the required components of a verification report required under
    subsection (a), which shall include--
                ``(1) the name and contact information for a designated
            representative for the offset project developer;
                ``(2) the quantity of greenhouse gases reduced, avoided, or
            sequestered;
                ``(3) the methodologies applicable to the project pursuant
            to section 734;
                ``(4) a certification that the project meets the applicable
            requirements;
                ``(5) a certification establishing that the conflict of
            interest requirements in the regulations promulgated under
            subsection (d)(1) have been complied with; and
                ``(6) any other information that the Administrator
            considers to be necessary to achieve the purposes of this part.
        ``(d) Verifier Accreditation.--
                ``(1) In general.--As part of the regulations promulgated
            under section 732(a), the Administrator shall establish a
            process and requirements for periodic accreditation of third-
            party verifiers to ensure that such verifiers are
            professionally qualified and have no conflicts of interest.
                ``(2) Standards.--
                        ``(A) American national standards institute
                    accreditation.--The Administrator may accredit, or
                    accept for purposes of accreditation under this
                    subsection, verifiers accredited under the American
                    National Standards Institute (ANSI) accreditation
                    program in accordance with ISO 14065. The Administrator
                    shall accredit, or accept for accreditation, verifiers
                    under this subparagraph only if the Administrator finds
                    that the American National Standards Institute
                    accreditation program provides sufficient assurance
                    that the requirements of this part will be met.
                        ``(B) EPA accreditation.--As part of the
                    regulations promulgated under section 732(a), the
                    Administrator may establish accreditation standards for
                    verifiers under this subsection, and may establish
                    related training and testing programs and requirements.
                ``(3) Public accessibility.--Each verifier meeting the
            requirements for accreditation in accordance with this
            subsection shall be listed in a publicly accessible database,
            which shall be maintained and updated by the Administrator.

    ``SEC. 737. ISSUANCE OF OFFSET CREDITS.

        ``(a) Determination and Notification.--Not later than 90 days after
    receiving a complete verification report under section 736, the
    Administrator shall--
                ``(1) make the report publicly available;
                ``(2) make a determination of the quantity of greenhouse
            gas emissions that have been reduced or avoided, or greenhouse
            gases that have been sequestered, by the offset project; and
                ``(3) notify the offset project developer in writing of
            such determination and make such determination publicly
            available.
        ``(b) Issuance Of Offset Credits.--The Administrator shall issue
    one offset credit to an offset project developer for each ton of carbon
    dioxide equivalent that the Administrator has determined has been
    reduced, avoided, or sequestered during the period covered by a
    verification report submitted in accordance with section 736, only if--
                ``(1) the Administrator has approved the offset project
            pursuant to section 735; and
                ``(2) the relevant emissions reduction, avoidance, or
            sequestration has--
                        ``(A) already occurred, during the offset project's
                    crediting period; and
                        ``(B) occurred after January 1, 2009.
        ``(c) Appeal.--The Administrator shall establish procedures for
    appeal and review of determinations made under subsection (a).
        ``(d) Timing.--Offset credits meeting the criteria established in
    subsection (b) shall be issued not later than 2 weeks following the
    verification determination made by the Administrator under subsection
    (a).
        ``(e) Registration.--The Administrator shall assign a unique serial
    number to and register each offset credit to be issued in the Offset
    Registry established under section 732(d).

    ``SEC. 738. AUDITS.

        ``(a) In General.--The Administrator shall, on an ongoing basis,
    conduct random audits of offset projects, offset credits, and practices
    of third-party verifiers. In each year, the Administrator shall conduct
    audits, at minimum, for a representative sample of project types and
    geographic areas.
        ``(b) Delegation.--The Administrator may delegate to a State or
    tribal government the responsibility for conducting audits under this
    section if the Administrator finds that the program proposed by the
    State or tribal government provides assurances equivalent to those
    provided by the auditing program of the Administrator, and that the
    integrity of the offset program under this part will be maintained.
    Nothing in this subsection shall prevent the Administrator from
    conducting any audit the Administrator considers necessary and
    appropriate.

    ``SEC. 739. PROGRAM REVIEW AND REVISION.

        ``At least once every 5 years, the Administrator shall review and,
    based on new or updated information and taking into consideration the
    recommendations of the Advisory Board, update and revise--
                ``(1) the list of eligible project types established under
            section 733;
                ``(2) the methodologies established, including specific
            activity baselines, under section 734(a);
                ``(3) the reversal requirements and mechanisms established
            or prescribed under section 734(b);
                ``(4) measures to improve the accountability of the offsets
            program; and
                ``(5) any other requirements established under this part to
            ensure the environmental integrity and effective operation of
            this part.

    ``SEC. 740. EARLY OFFSET SUPPLY.

        ``(a) Projects Registered Under Other Government-recognized
    Programs.--Except as provided in subsection (b) or (c), the
    Administrator shall issue one offset credit for each ton of carbon
    dioxide equivalent emissions reduced, avoided, or sequestered--
                ``(1) under an offset project that was started after
            January 1, 2001;
                ``(2) for which a credit was issued under any regulatory or
            voluntary greenhouse gas emission offset program that the
            Administrator determines--
                        ``(A) was established under State or tribal law or
                    regulation prior to January 1, 2009, or has been
                    approved by the Administrator pursuant to subsection
                    (e);
                        ``(B) has developed offset project type standards,
                    methodologies, and protocols through a public
                    consultation process or a peer review process;
                        ``(C) has made available to the public standards,
                    methodologies, and protocols that require that credited
                    emission reductions, avoidance, or sequestration are
                    permanent, additional, verifiable, and enforceable;
                        ``(D) requires that all emission reductions,
                    avoidance, or sequestration be verified by a State or
                    tribal regulatory agency or an accredited third-party
                    independent verification body;
                        ``(E) requires that all credits issued are
                    registered in a publicly accessible registry, with
                    individual serial numbers assigned for each ton of
                    carbon dioxide equivalent emission reductions,
                    avoidance, or sequestration; and
                        ``(F) ensures that no credits are issued for an
                    activity if the entity administering the program, or a
                    program administrator or representative, has funded,
                    solicited, or served as a fund administrator for the
                    development of the activity; and
                ``(3) for which the credit described in paragraph (2) is
            transferred to the Administrator.
        ``(b) Ineligible Credits.--Subsection (a) shall not apply to offset
    credits that have expired or have been retired, canceled, or used for
    compliance under a program established under State or tribal law or
    regulation.
        ``(c) Limitation.--Notwithstanding subsection (a)(1), offset
    credits shall be issued under this section--
                ``(1) only for reductions or avoidance of greenhouse gas
            emissions, sequestration of greenhouse gases, or destruction of
            chlorofluorocarbons (subject to the conditions specified in
            section 619(b)(9) and based on the carbon dioxide equivalent
            value of the substance destroyed), that occur after January 1,
            2009; and
                ``(2) only until the date that is 3 years after the date of
            enactment of this title, or the date that regulations
            promulgated under section 732(a) take effect, whichever occurs
            sooner.
        ``(d) Retirement of Credits.--The Administrator shall seek to
    ensure that offset credits described in subsection (a)(2) are retired
    for purposes of use under a program described in subsection (b).
        ``(e) Other Programs.--(1) Offset programs that either--
                ``(A) were not established under State or tribal law or
            regulation; or
                ``(B) were not established prior to January 1, 2009,
    but that otherwise meet all of the criteria of subsection (a)(2) may
    apply to the Administrator to be approved under this subsection as an
    eligible program for early offset credits under this section.
        ``(2) The Administrator shall approve any such program that the
    Administrator determines has criteria and methodologies of at least
    equal stringency to the criteria and methodologies of the programs
    established under State or tribal law or regulation that the
    Administrator determines meet the criteria of subsection (a)(2). The
    Administrator may approve types of offsets under any such program that
    are subject to criteria and methodologies of at least equal stringency
    to the criteria and methodologies for such types of offsets applied
    under the programs established under State or tribal law or regulation
    that the Administrator determines meet the criteria of subsection
    (a)(2). The Administrator shall make a determination on any application
    received under this section by no later than 180 days from the date of
    receipt of the application.

    ``SEC. 741. ENVIRONMENTAL CONSIDERATIONS.

        ``If the Administrator lists forestry or other relevant land
    management-related offset projects as eligible offset project types
    under section 733, the Administrator, in consultation with appropriate
    Federal agencies, shall promulgate regulations for the selection and
    use of species in such offset projects--
                ``(1) to ensure that native species are given primary
            consideration in such projects;
                ``(2) to enhance biological diversity in such projects;
                ``(3) to prohibit the use of federally designated or State-
            designated noxious weeds;
                ``(4) to prohibit the use of a species listed by a regional
            or State invasive plant authority within the applicable region
            or State; and
                ``(5) in the case of forestry offset projects, in
            accordance with widely accepted, environmentally sustainable
            forestry practices.

    ``SEC. 742. TRADING.

        ``Section 724 shall apply to the trading of offset credits.

    ``SEC. 743. INTERNATIONAL OFFSET CREDITS.

        ``(a) In General.--The Administrator, in consultation with the
    Secretary of State and the Administrator of the United States Agency
    for International Development, may issue, in accordance with this
    section, international offset credits based on activities that reduce
    or avoid greenhouse gas emissions, or increase sequestration of
    greenhouse gases, in a developing country. Such credits may be issued
    for projects eligible under section 733 or as provided in subsection
    (c), (d), or (e) of this section.
        ``(b) Issuance.--
                ``(1) Regulations.--Not later than 2 years after the date
            of enactment of this title, the Administrator, in consultation
            with the Secretary of State, the Administrator of the United
            States Agency for International Development, and any other
            appropriate Federal agency, and taking into consideration the
            recommendations of the Advisory Board, shall promulgate
            regulations for implementing this section. Except as otherwise
            provided in this section, the issuance of international offset
            credits under this section shall be subject to the requirements
            of this part.
                ``(2) Requirements for international offset credits.--The
            Administrator may issue international offset credits only if--
                        ``(A) the United States is a party to a bilateral
                    or multilateral agreement or arrangement that includes
                    the country in which the project or measure achieving
                    the relevant greenhouse gas emission reduction or
                    avoidance, or greenhouse gas sequestration, has
                    occurred;
                        ``(B) such country is a developing country; and
                        ``(C) such agreement or arrangement--
                                ``(i) ensures that the requirements of this
                            part apply to the issuance of international
                            offset credits under this section; and
                                ``(ii) provides for the appropriate
                            distribution of international offset credits
                            issued.
        ``(c) Sector-based Credits.--
                ``(1) In general.--In order to minimize the potential for
            leakage and to encourage countries to take nationally
            appropriate mitigation actions to reduce or avoid greenhouse
            gas emissions, or sequester greenhouse gases, the
            Administrator, in consultation with the Secretary of State and
            the Administrator of the United States Agency for International
            Development, shall--
                        ``(A) identify sectors of specific countries with
                    respect to which the issuance of international offset
                    credits on a sectoral basis is appropriate; and
                        ``(B) issue international offset credits for such
                    sectors only on a sectoral basis.
                ``(2) Identification of sectors.--
                        ``(A) General rule.--For purposes of paragraph
                    (1)(A), a sectoral basis shall be appropriate for
                    activities--
                                ``(i) in countries that have comparatively
                            high greenhouse gas emissions, or comparatively
                            greater levels of economic development; and
                                ``(ii) that, if located in the United
                            States, would be within a sector subject to the
                            compliance obligation under section 722.
                        ``(B) Factors.--In determining the sectors and
                    countries for which international offset credits should
                    be awarded only on a sectoral basis, the Administrator,
                    in consultation with the Secretary of State and the
                    Administrator of the United States Agency for
                    International Development, shall consider the following
                    factors:
                                ``(i) The country's gross domestic product.
                                ``(ii) The country's total greenhouse gas
                            emissions.
                                ``(iii) Whether the comparable sector of
                            the United States economy is covered by the
                            compliance obligation under section 722.
                                ``(iv) The heterogeneity or homogeneity of
                            sources within the relevant sector.
                                ``(v) Whether the relevant sector provides
                            products or services that are sold in
                            internationally competitive markets.
                                ``(vi) The risk of leakage if international
                            offset credits were issued on a project-level
                            basis, instead of on a sectoral basis, for
                            activities within the relevant sector.
                                ``(vii) The capability of accurately
                            measuring, monitoring, reporting, and verifying
                            the performance of sources across the relevant
                            sector.
                                ``(viii) Such other factors as the
                            Administrator, in consultation with the
                            Secretary of State and the Administrator of the
                            United States Agency for International
                            Development, determines are appropriate to--
                                        ``(I) ensure the integrity of the
                                    United States greenhouse gas emissions
                                    cap established under section 703; and
                                        ``(II) encourage countries to take
                                    nationally appropriate mitigation
                                    actions to reduce or avoid greenhouse
                                    gas emissions, or sequester greenhouse
                                    gases.
                ``(3) Sectoral basis.--
                        ``(A) Definition.--In this subsection, the term
                    `sectoral basis' means the issuance of international
                    offset credits only for the quantity of sector-wide
                    reductions or avoidance of greenhouse gas emissions, or
                    sector-wide increases in sequestration of greenhouse
                    gases, achieved across the relevant sector of the
                    economy relative to a domestically enforceable baseline
                    level of absolute emissions established in an agreement
                    or arrangement described in subsection (b)(2)(A) for
                    the sector.
                        ``(B) Baseline.--The baseline for a sector shall be
                    established on an absolute basis and at levels of
                    greenhouse gas emissions consistent with the thresholds
                    identified in section 705(e)(2) and lower than would
                    occur under a business-as-usual scenario taking into
                    account relevant domestic or international policies or
                    incentives to reduce greenhouse gas emissions, among
                    other factors, and additionality and performance shall
                    be determined on the basis of such baseline.
        ``(d) Credits Issued by an International Body.--
                ``(1) In general.--The Administrator, in consultation with
            the Secretary of State, may issue international offset credits
            in exchange for instruments in the nature of offset credits
            that are issued by an international body established pursuant
            to the United Nations Framework Convention on Climate Change,
            to a protocol to such Convention, or to a treaty that succeeds
            such Convention. The Administrator may issue international
            offset credits under this subsection only if, in addition to
            the requirements of subsection (b), the Administrator has
            determined that the international body that issued the
            instruments has implemented substantive and procedural
            requirements for the relevant project type that provide equal
            or greater assurance of the integrity of such instruments as is
            provided by the requirements of this part. Starting January 1,
            2016, the Administrator shall issue no offset credit pursuant
            to this subsection if the activity generating the greenhouse
            gas emissions reductions or avoidance, or greenhouse gas
            sequestration, occurs in a country and sector identified by the
            Administrator under subsection (c).
                ``(2) Retirement.--The Administrator, in consultation with
            the Secretary of State, shall seek, by whatever means
            appropriate, including agreements, arrangements, or technical
            cooperation with the international issuing body described in
            paragraph (1), to ensure that such body--
                        ``(A) is notified of the Administrator's issuance,
                    under this subsection, of an international offset
                    credit in exchange for an instrument issued by such
                    international body; and
                        ``(B) provides, to the extent feasible, for the
                    disqualification of the instrument issued by such
                    international body for subsequent use under any
                    relevant foreign or international greenhouse gas
                    regulatory program, regardless of whether such use is a
                    sale, exchange, or submission to satisfy a compliance
                    obligation.
        ``(e) Offsets From Reduced Deforestation.--
                ``(1) Requirements.--The Administrator, in accordance with
            the regulations promulgated under subsection (b)(1) and an
            agreement or arrangement described in subsection (b)(2)(A),
            shall issue international offset credits for greenhouse gas
            emission reductions achieved through activities to reduce
            deforestation only if, in addition to the requirements of
            subsection (b)--
                        ``(A) the activity occurs in--
                                ``(i) a country listed by the Administrator
                            pursuant to paragraph (2);
                                ``(ii) a state or province listed by the
                            Administrator pursuant to paragraph (5); or
                                ``(iii) a country listed by the
                            Administrator pursuant to paragraph (6);
                        ``(B) except as provided in paragraph (5) or (6),
                    the quantity of the international offset credits is
                    determined by comparing the national emissions from
                    deforestation relative to a national deforestation
                    baseline for that country established, in accordance
                    with an agreement or arrangement described in
                    subsection (b)(2)(A), pursuant to paragraph (4);
                        ``(C) the reduction in emissions from deforestation
                    has occurred before the issuance of the international
                    offset credit and, taking into consideration relevant
                    international standards, has been demonstrated using
                    ground-based inventories, remote sensing technology,
                    and other methodologies to ensure that all relevant
                    carbon stocks are accounted;
                        ``(D) the Administrator has made appropriate
                    adjustments, such as discounting for any additional
                    uncertainty, to account for circumstances specific to
                    the country, including its technical capacity described
                    in paragraph (2)(A);
                        ``(E) the activity is designed, carried out, and
                    managed--
                                ``(i) in accordance with widely accepted,
                            environmentally sustainable forest management
                            practices;
                                ``(ii) to promote or restore native forest
                            species and ecosystems where practicable, and
                            to avoid the introduction of invasive nonnative
                            species;
                                ``(iii) in a manner that gives due regard
                            to the rights and interests of local
                            communities, indigenous peoples, forest-
                            dependent communities, and vulnerable social
                            groups;
                                ``(iv) with consultations with, and full
                            participation of, local communities, indigenous
                            peoples, and forest-dependent communities, in
                            affected areas, as partners and primary
                            stakeholders, prior to and during the design,
                            planning, implementation, and monitoring and
                            evaluation of activities; and
                                ``(v) with equitable sharing of profits and
                            benefits derived from offset credits with local
                            communities, indigenous peoples, and forest-
                            dependent communities; and
                        ``(F) the reduction otherwise satisfies and is
                    consistent with any relevant requirements established
                    by an agreement reached under the auspices of the
                    United Nations Framework Convention on Climate Change.
                ``(2) Eligible countries.--The Administrator, in
            consultation with the Secretary of State and the Administrator
            of the United States Agency for International Development, and
            in accordance with an agreement or arrangement described in
            subsection (b)(2)(A), shall establish, and periodically review
            and update, a list of the developing countries that have the
            capacity to participate in deforestation reduction activities
            at a national level, including--
                        ``(A) the technical capacity to monitor, measure,
                    report, and verify forest carbon fluxes for all
                    significant sources of greenhouse gas emissions from
                    deforestation with an acceptable level of uncertainty,
                    as determined taking into account relevant
                    internationally accepted methodologies, such as those
                    established by the Intergovernmental Panel on Climate
                    Change;
                        ``(B) the institutional capacity to reduce
                    emissions from deforestation, including strong forest
                    governance and mechanisms to equitably distribute
                    deforestation resources for local actions; and
                        ``(C) a land use or forest sector strategic plan
                    that--
                                ``(i) assesses national and local drivers
                            of deforestation and forest degradation and
                            identifies reforms to national policies needed
                            to address them;
                                ``(ii) estimates the country's emissions
                            from deforestation and forest degradation;
                                ``(iii) identifies improvements in data
                            collection, monitoring, and institutional
                            capacity necessary to implement a national
                            deforestation reduction program; and
                                ``(iv) establishes a timeline for
                            implementing the program and transitioning to
                            low-emissions development with respect to
                            emissions from forest and land use activities.
                ``(3) Protection of interests.--With respect to an
            agreement or arrangement described in subsection (b)(2)(A) that
            addresses international offset credits under this subsection,
            the Administrator, in consultation with the Secretary of State
            and the Administrator of the United States Agency for
            International Development, shall seek to ensure the
            establishment and enforcement by such country of legal regimes,
            processes, standards, and safeguards that--
                        ``(A) give due regard to the rights and interests
                    of local communities, indigenous peoples, forest-
                    dependent communities, and vulnerable social groups;
                        ``(B) promote consultations with, and full
                    participation of, forest-dependent communities and
                    indigenous peoples in affected areas, as partners and
                    primary stakeholders, prior to and during the design,
                    planning, implementation, and monitoring and evaluation
                    of activities; and
                        ``(C) encourage equitable sharing of profits and
                    benefits derived from international offset credits with
                    local communities, indigenous peoples, and forest-
                    dependent communities.
                ``(4) National deforestation baseline.--A national
            deforestation baseline established under this subsection
            shall--
                        ``(A) be national in scope;
                        ``(B) be consistent with nationally appropriate
                    mitigation commitments or actions with respect to
                    deforestation, taking into consideration the average
                    annual historical deforestation rates of the country
                    during a period of at least 5 years, the applicable
                    drivers of deforestation, and other factors to ensure
                    additionality;
                        ``(C) establish a trajectory that would result in
                    zero net deforestation by not later than 20 years after
                    the national deforestation baseline has been
                    established;
                        ``(D) be adjusted over time to take account of
                    changing national circumstances;
                        ``(E) be designed to account for all significant
                    sources of greenhouse gas emissions from deforestation
                    in the country; and
                        ``(F) be consistent with the national deforestation
                    baseline, if any, established for such country under
                    section 754(d)(1) and (2).
                ``(5) State-level or province-level activities.--
                        ``(A) Eligible states or provinces.--The
                    Administrator, in consultation with the Secretary of
                    State and the Administrator of the United States Agency
                    for International Development, shall establish within 2
                    years after the date of enactment of this title, and
                    periodically review and update, a list of states or
                    provinces in developing countries where--
                                ``(i) the developing country is not
                            included on the list of countries established
                            pursuant to paragraph (6)(A);
                                ``(ii) the state or province by itself is a
                            major emitter of greenhouse gases from tropical
                            deforestation on a scale commensurate to the
                            emissions of other countries; and
                                ``(iii) the state or province meets the
                            eligibility criteria in paragraphs (2) and (3)
                            for the geographic area under its jurisdiction.
                        ``(B) Activities.--The Administrator may issue
                    international offset credits for greenhouse gas
                    emission reductions achieved through activities to
                    reduce deforestation at a state or provincial level
                    that meet the requirements of this section. Such
                    credits shall be determined by comparing the emissions
                    from deforestation within that state or province
                    relative to the state or province deforestation
                    baseline for that state or province established, in
                    accordance with an agreement or arrangement described
                    in subsection (b)(2)(A), pursuant to subparagraph (C)
                    of this paragraph.
                        ``(C) State or province deforestation baseline.--A
                    state or province deforestation baseline shall--
                                ``(i) be consistent with any existing
                            nationally appropriate mitigation commitments
                            or actions for the country in which the
                            activity is occurring, taking into
                            consideration the average annual historical
                            deforestation rates of the state or province
                            during a period of at least 5 years, relevant
                            drivers of deforestation, and other factors to
                            ensure additionality;
                                ``(ii) establish a trajectory that would
                            result in zero net deforestation by not later
                            than 20 years after the state or province
                            deforestation baseline has been established;
                            and
                                ``(iii) be designed to account for all
                            significant sources of greenhouse gas emissions
                            from deforestation in the state or province and
                            adjusted to fully account for emissions leakage
                            outside the state or province.
                        ``(D) Phase out.--Beginning 5 years after the first
                    calendar year for which a covered entity must
                    demonstrate compliance with section 722(a), the
                    Administrator shall issue no further international
                    offset credits for eligible state-level or province-
                    level activities to reduce deforestation pursuant to
                    this paragraph.
                ``(6) Projects and programs to reduce deforestation.--
                        ``(A) Eligible countries.--The Administrator, in
                    consultation with the Secretary of State and the
                    Administrator of the United States Agency for
                    International Development, shall establish within 2
                    years after the date of enactment of this title, and
                    periodically review and update, a list of developing
                    countries each of which--
                                ``(i) the Administrator determines, based
                            on recent, credible, and reliable emissions
                            data, accounts for less than 1 percent of
                            global greenhouse gas emissions and less than 3
                            percent of global forest-sector and land use
                            change greenhouse gas emissions; and
                                ``(ii) has, or in the determination of the
                            Administrator is making a good faith effort to
                            develop, a land use or forest sector strategic
                            plan that meets the criteria described in
                            paragraph (2)(C).
                        ``(B) Activities.--The Administrator may issue
                    international offset credits for greenhouse gas
                    emission reductions achieved through project or program
                    level activities to reduce deforestation in countries
                    listed under subparagraph (A) that meet the
                    requirements of this section. The quantity of
                    international offset credits shall be determined by
                    comparing the project-level or program-level emissions
                    from deforestation to a deforestation baseline for such
                    project or program established pursuant to subparagraph
                    (C).
                        ``(C) Project-level or program-level baseline.--A
                    project-level or program-level deforestation baseline
                    shall--
                                ``(i) be consistent with any existing
                            nationally appropriate mitigation commitments
                            or actions for the country in which the project
                            or program is occurring, taking into
                            consideration the average annual historical
                            deforestation rates relevant to the specific
                            project or program during a period of at least
                            5 years, applicable drivers of deforestation,
                            and other factors to ensure additionality;
                                ``(ii) be designed to account for all
                            significant sources of greenhouse gas emissions
                            from deforestation in the project or program
                            boundary; and
                                ``(iii) be adjusted to fully account for
                            emissions leakage outside the project or
                            program boundary.
                        ``(D) Phase out.--(i) Beginning 5 years after the
                    first calendar year for which a covered entity must
                    demonstrate compliance with section 722(a), the
                    Administrator shall issue no further international
                    offset credits for project-level or program-level
                    activities pursuant to this paragraph, except as
                    provided in clause (ii).
                        ``(ii) The Administrator may extend the phase out
                    deadline for the issuance of international offset
                    credits under this paragraph by up to 8 years with
                    respect to eligible activities taking place in a least
                    developed country, which for purposes of this paragraph
                    is defined as a foreign country that the United Nations
                    has identified as among the least developed of
                    developing countries at the time that the Administrator
                    determines to provide an extension, if the
                    Administrator, in consultation with the Secretary of
                    State and the Administrator of the United States Agency
                    for International Development, determines the country--
                                ``(I) lacks sufficient capacity to adopt
                            and implement effective programs to achieve
                            reductions in deforestation measured against
                            national baselines;
                                ``(II) is receiving support under part E to
                            develop such capacity; and
                                ``(III) has developed and is working to
                            implement a credible national strategy or plan
                            to reduce deforestation.
                ``(7) Deforestation.--In implementing this subsection, the
            Administrator, taking into consideration the recommendations of
            the Advisory Board, may include forest degradation, or soil
            carbon losses associated with forested wetlands or peatlands,
            within the meaning of deforestation.
                ``(8) Consultation.--In implementing this subsection, the
            Administrator shall consult with the Secretary of Agriculture
            on relevant matters within such Secretary's area of expertise.
        ``(f) Modification of Requirements.--In promulgating regulations
    under subsection (b)(1) with respect to the issuance of international
    offset credits under subsection (c), (d), or (e), the Administrator, in
    consultation with the Secretary of State and the Administrator of the
    United States Agency for International Development, may modify or omit
    a requirement of this part (excluding the requirements of this section)
    if the Administrator determines that the application of that
    requirement to such subsection is not feasible. In modifying or
    omitting such a requirement on the basis of infeasibility, the
    Administrator, in consultation with the Secretary of State and the
    Administrator of the United States Agency for International
    Development, shall ensure, with an adequate margin of safety, the
    integrity of international offset credits issued under this section and
    of the greenhouse gas emissions cap established pursuant to section
    703.
        ``(g) Avoiding Double Counting.--The Administrator, in consultation
    with the Secretary of State, shall seek, by whatever means appropriate,
    including agreements, arrangements, or technical cooperation, to ensure
    that activities on the basis of which international offset credits are
    issued under this section are not used for compliance with an
    obligation to reduce or avoid greenhouse gas emissions, or increase
    greenhouse gas sequestration, under a foreign or international
    regulatory system. In addition, no international offset credits shall
    be issued for emission reductions from activities with respect to which
    emission allowances were allocated under section 781 for distribution
    under part E.
        ``(h) Limitation.--The Administrator shall not issue international
    offset credits generated by projects based on the destruction of
    hydrofluorocarbons.

     ``PART E--SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED DEFORESTATION

    ``SEC. 751. DEFINITIONS.

        ``In this part:
                ``(1) Leakage prevention activities.--The term `leakage
            prevention activities' means activities in developing countries
            that are directed at preserving existing forest carbon stocks,
            including forested wetlands and peatlands, that might, absent
            such activities, be lost through leakage.
                ``(2) National deforestation reduction activities.--The
            term `national deforestation reduction activities' means
            activities in developing countries that reduce a quantity of
            greenhouse gas emissions from deforestation that is calculated
            by measuring actual emissions against a national deforestation
            baseline established pursuant to section 754(d)(1) and (2).
                ``(3) Subnational deforestation reduction activities.--The
            term `subnational deforestation reduction activities' means
            activities in developing countries that reduce a quantity of
            greenhouse gas emissions from deforestation that are calculated
            by measuring actual emissions using an appropriate baseline
            established by the Administrator that is less than national in
            scope.
                ``(4) Supplemental emissions reductions.--The term
            `supplemental emissions reductions' means greenhouse gas
            emissions reductions achieved from reduced or avoided
            deforestation under this part.
                ``(5) USAID.--The term `USAID' means the United States
            Agency for International Development.

    ``SEC. 752. FINDINGS.

        ``Congress finds that--
                ``(1) as part of a global effort to mitigate climate
            change, it is in the national interest of the United States to
            assist developing countries to reduce and ultimately halt
            emissions from deforestation;
                ``(2) deforestation is one of the largest sources of
            greenhouse gas emissions in developing countries, amounting to
            roughly 20 percent of overall emissions globally;
                ``(3) recent scientific analysis shows that it will be
            substantially more difficult to limit the increase in global
            temperatures to less than 2 degrees centigrade above
            preindustrial levels without reducing and ultimately halting
            net emissions from deforestation;
                ``(4) reducing emissions from deforestation is highly cost-
            effective, compared to many other sources of emissions
            reductions;
                ``(5) in addition to contributing significantly to
            worldwide efforts to address global warming, assistance under
            this part will generate significant environmental and social
            cobenefits, including protection of biodiversity, ecosystem
            services, and forest-related livelihoods; and
                ``(6) under the Bali Action Plan, developed country parties
            to the United Nations Framework Convention on Climate Change,
            including the United States, committed to `enhanced action on
            the provision of financial resources and investment to support
            action on mitigation and adaptation and technology
            cooperation,' including, inter alia, consideration of `improved
            access to adequate, predictable, and sustainable financial
            resources and financial and technical support, and the
            provision of new and additional resources, including official
            and concessional funding for developing country parties' .

    ``SEC. 753. SUPPLEMENTAL EMISSIONS REDUCTIONS THROUGH REDUCED
                  DEFORESTATION.

        ``(a) Regulations.--Not later than 2 years after the date of
    enactment of this title, the Administrator, in consultation with the
    Administrator of USAID and any other appropriate agencies, shall
    promulgate regulations establishing a program to use emission
    allowances set aside for this purpose under section 781 to reduce
    greenhouse gas emissions from deforestation in developing countries in
    accordance with the requirements of this part.
        ``(b) Objectives.--The objectives of the program established under
    this section shall be to--
                ``(1) achieve supplemental emissions reductions of at least
            720,000,000 tons of carbon dioxide equivalent in 2020, a
            cumulative amount of at least 6,000,000,000 tons of carbon
            dioxide equivalent by December 31, 2025, and additional
            supplemental emissions reductions in subsequent years;
                ``(2) build capacity to reduce deforestation in developing
            countries experiencing deforestation, including preparing
            developing countries to participate in international markets
            for international offset credits for reduced emissions from
            deforestation; and
                ``(3) preserve existing forest carbon stocks in countries
            where such forest carbon may be vulnerable to international
            leakage, particularly in developing countries with largely
            intact native forests.

    ``SEC. 754. REQUIREMENTS FOR INTERNATIONAL DEFORESTATION REDUCTION
                  PROGRAM.

        ``(a) Eligible Countries.--The Administrator may support activities
    under this part only with respect to a developing country that--
                ``(1) the Administrator, in consultation with the
            Administrator of USAID, determines is experiencing
            deforestation or forest degradation or has standing forest
            carbon stocks that may be at risk of deforestation or
            degradation; and
                ``(2) has entered into a bilateral or multilateral
            agreement or arrangement with the United States establishing
            the conditions of its participation in the program established
            under this part, which shall include an agreement to meet the
            standards established under subsection (d) for the activities
            to which those standards apply.
        ``(b) Activities.--
                ``(1) Authorized activities.--Subject to the requirements
            of this part, the Administrator, in consultation with the
            Administrator of USAID, may support activities to achieve the
            objectives identified in section 753(b), including--
                        ``(A) national deforestation reduction activities;
                        ``(B) subnational deforestation reduction
                    activities, including pilot activities that reduce
                    greenhouse gas emissions but are subject to significant
                    uncertainty;
                        ``(C) activities to measure, monitor, and verify
                    deforestation, avoided deforestation, and deforestation
                    rates;
                        ``(D) leakage prevention activities;
                        ``(E) development of measurement, monitoring, and
                    verification capacities to enable a country to quantify
                    supplemental emissions reductions and to generate for
                    sale offset credits from reduced or avoided
                    deforestation;
                        ``(F) development of governance structures to
                    reduce deforestation and illegal logging;
                        ``(G) enforcement of requirements for reduced
                    deforestation or forest conservation;
                        ``(H) efforts to combat illegal logging and
                    increase enforcement cooperation;
                        ``(I) providing incentives for policy reforms to
                    achieve the objectives identified in section 753(b);
                    and
                        ``(J) monitoring and evaluation of the results of
                    the activities conducted under this section.
                ``(2) Activities selected by usaid.--
                        ``(A) The Administrator of USAID, in consultation
                    with the Administrator, may select for support and
                    implementation pursuant to subsection (c) any of the
                    activities described in paragraph (1), consistent with
                    this part and the regulations promulgated under
                    subsection (d), and subject to the requirement to
                    achieve the objectives listed in section 753(b)(1).
                        ``(B) With respect to the activities listed in
                    subparagraphs (D) through (J) of paragraph (1), the
                    Administrator of USAID, in consultation with the
                    Administrator, shall have primary but not exclusive
                    responsibility for selecting the activities to be
                    supported and implemented.
                ``(3) Interagency coordination.--The Administrator and the
            Administrator of USAID shall jointly develop and biennially
            update a strategic plan for meeting the objectives listed in
            section 753(b) and shall execute a memorandum of understanding
            delineating the agencies' respective roles in implementing this
            part.
        ``(c) Mechanisms.--
                ``(1) In general.--The Administrator may support activities
            to achieve the objectives identified in section 753(b) by--
                        ``(A) developing and implementing programs and
                    projects that achieve such objectives; and
                        ``(B) distributing emission allowances to a country
                    that is eligible under subsection (a), to a private or
                    public group (including international organizations),
                    or to an international fund established by an
                    international agreement to which the United States is a
                    party, to carry out activities to achieve such
                    objectives.
                ``(2) USAID activities.--With respect to activities
            selected and implemented by the Administrator of USAID pursuant
            to subsection (b)(2), the Administrator shall distribute
            emission allowances as provided in paragraph (1) of this
            subsection based upon the direction of the Administrator of
            USAID, subject to the availability of allowances for such
            activities.
                ``(3) Implementation through international organizations.--
            If support is distributed through an international
            organization, the agency responsible for selecting activities
            in accordance with subsection (b)(1) or (2), in consultation
            with the Secretary of State, shall ensure the establishment and
            implementation of adequate mechanisms to apply and enforce the
            eligibility requirements and other requirements of this
            section.
                ``(4) Role of the secretary of state.--The Administrator
            may not distribute emission allowances under this part to the
            government of another country or to an international
            organization or international fund unless the Secretary of
            State has concurred with such distribution.
        ``(d) Standards.--The Administrator, in consultation with the
    Administrator of USAID, shall promulgate regulations establishing
    standards to ensure that supplemental emissions reductions achieved
    through supported activities are additional, measurable, verifiable,
    permanent, and monitored, and account for leakage and uncertainty. In
    addition, such standards shall--
                ``(1) require the establishment of a national deforestation
            baseline for each country with national deforestation reduction
            activities that is used to account for reductions achieved from
            such activities;
                ``(2) provide that a national deforestation baseline
            established under paragraph (1) shall--
                        ``(A) be national in scope;
                        ``(B) be consistent with nationally appropriate
                    mitigation commitments or actions with respect to
                    deforestation, taking into consideration the average
                    annual historical deforestation rates of the country
                    during a period of at least 5 years, the applicable
                    drivers of deforestation, and other factors to ensure
                    additionality;
                        ``(C) establish a trajectory that would result in
                    zero net deforestation by not later than 20 years from
                    the date the baseline is established;
                        ``(D) be adjusted over time to take account of
                    changing national circumstances;
                        ``(E) be designed to account for all significant
                    sources of greenhouse gas emissions from deforestation
                    in the country; and
                        ``(F) be consistent with the national deforestation
                    baseline, if any, established for such country under
                    section 743(e)(4);
                ``(3) with respect to support provided pursuant to
            subsection (b)(1)(A) or (B), require supplemental emissions
            reductions to be achieved and verified prior to compensation
            through the distribution of emission allowances under this
            part;
                ``(4) with respect to accounting for subnational
            deforestation reduction activities that lack the standardized
            or precise measurement and monitoring techniques needed for a
            full accounting of changes in emissions or baselines, or are
            subject to other sources of uncertainty, apply a conservative
            discount factor to reflect the uncertainty regarding the levels
            of reductions achieved;
                ``(5) ensure that activities under this part shall be
            designed, carried out, and managed--
                        ``(A) in accordance with widely accepted,
                    environmentally sustainable forest management
                    practices;
                        ``(B) to promote or restore native forest species
                    and ecosystems where practicable, and to avoid the
                    introduction of invasive nonnative species;
                        ``(C) in a manner that gives due regard to the
                    rights and interests of local communities, indigenous
                    peoples, forest-dependent communities, and vulnerable
                    social groups;
                        ``(D) with consultations with, and full
                    participation of, local communities, indigenous
                    peoples, and forest-dependent communities in affected
                    areas, as partners and primary stakeholders, prior to
                    and during the design, planning, implementation, and
                    monitoring and evaluation of activities; and
                        ``(E) with equitable sharing of profits and
                    benefits derived from the activities with local
                    communities, indigenous peoples, and forest-dependent
                    communities; and
                ``(6) with respect to support for all activities under this
            part, seek to ensure the establishment and enforcement, by the
            country in which the activities occur, of legal regimes,
            standards, processes, and safeguards that--
                        ``(A) give due regard to the rights and interests
                    of local communities, indigenous peoples, forest-
                    dependent communities, and vulnerable social groups;
                        ``(B) promote consultations with local communities
                    and indigenous peoples and forest-dependent communities
                    in affected areas, as partners and primary
                    stakeholders, prior to and during the design, planning,
                    implementation, monitoring, and evaluation of
                    activities under this part; and
                        ``(C) encourage equitable sharing of profits and
                    benefits from incentives for emissions reductions or
                    leakage prevention with local communities, indigenous
                    peoples, and forest-dependent communities.
        ``(e) Scope.--(1) The Administrator shall include within the scope
    of activities under this part reduced emissions from forest
    degradation.
        ``(2) The Administrator, in consultation with the Administrator of
    USAID, may decide, taking into account any advice from the Advisory
    Board, to expand, where appropriate, the scope of activities under this
    part to include reduced soil carbon-derived emissions associated with
    deforestation and degradation of forested wetlands and peatlands.
        ``(f) Accounting.--The Administrator shall establish a publicly
    accessible registry of the supplemental emissions reductions achieved
    through support provided under this part each year, after appropriately
    discounting for uncertainty and other relevant factors as required by
    the standards established under subsection (d).
        ``(g) Transition to National Reductions.--Beginning 5 years after
    the date that a country entered into the agreement or arrangement
    required under subsection (a)(2), the Administrator shall provide no
    further compensation through emission allowances to that country under
    this part for any subnational deforestation reduction activities,
    except that the Administrator may extend this period by an additional 5
    years if the Administrator, in consultation with the Administrator of
    USAID, determines that--
                ``(1) the country is making substantial progress towards
            adopting and implementing a program to achieve reductions in
            deforestation measured against a national baseline;
                ``(2) the greenhouse gas emissions reductions achieved are
            not resulting in significant leakage; and
                ``(3) the greenhouse gas emissions reductions achieved are
            being appropriately discounted to account for any leakage that
            is occurring.
    The limitation under this subsection shall not apply to support for
    activities to further the objectives listed in section 753(b)(2) or
    (3).
        ``(h) Coordination With U.S. Foreign Assistance.--Subject to the
    direction of the President, the Administrator and the Administrator of
    USAID shall, to the extent practicable and consistent with the
    objectives of this program, seek to align activities under this section
    with broader development, poverty alleviation, or natural resource
    management objectives and initiatives in the recipient country.
        ``(i) Support as Supplement.--The provision of support for
    activities under this part shall be used to supplement, and not to
    supplant, any other Federal, State, or local support available to carry
    out such qualifying activities under this part.
        ``(j) Not Eligible for Offset Credit.--Activities that receive
    support under this part shall not be issued offset credits for the
    greenhouse gas emissions reductions or avoidance, or greenhouse gas
    sequestration, produced by such activities.

    ``SEC. 755. REPORTS AND REVIEWS.

        ``(a) Reports.--Not later than January 1, 2014, and annually
    thereafter, the Administrator and the Administrator of USAID shall
    submit to the Committee on Energy and Commerce and the Committee on
    Foreign Affairs of the House of Representatives, and the Committee on
    Environment and Public Works and the Committee on Foreign Relations of
    the Senate, and make available to the public, a report on the support
    provided under this part during the prior fiscal year. The report shall
    include--
                ``(1) a statement of the quantity of supplemental emissions
            reductions for which compensation in the form of emission
            allowances was provided under this part during the prior fiscal
            year, as registered by the Administrator under section 754(f);
            and
                ``(2) a description of the national and subnational
            deforestation reduction activities, capacity-building
            activities, and leakage prevention activities supported under
            this part, including a statement of the quantity of emission
            allowances distributed to each recipient for each activity
            during the prior fiscal year, and a description of what was
            accomplished through each of the activities.
        ``(b) Reviews.--Not later than 4 years after the date of enactment
    of this title and every 5 years thereafter, the Administrator and the
    Administrator of USAID, taking into consideration any evaluation by or
    recommendations from the Advisory Board established under section 731,
    shall conduct a review of the activities undertaken pursuant to this
    part and make any appropriate changes in the program established under
    this part, consistent with the requirements of this part, based on the
    findings of the review. The review shall include the effects of the
    activities on--
                ``(1) total documented carbon stocks of each country that
            directly or indirectly received support under this part
            compared with such country's national deforestation baseline
            established under section 754(d)(1) and (2);
                ``(2) the number of countries with the capacity to generate
            for sale instruments in the nature of offset credits from
            forest-related activities, and the amount of such activities;
                ``(3) forest governance in each country that directly or
            indirectly received support under this part;
                ``(4) indigenous peoples and forest-dependent communities
            residing in areas affected by such activities;
                ``(5) biodiversity and ecosystem services within forested
            areas associated with the activities;
                ``(6) subnational and international leakage; and
                ``(7) any program or mechanism established under the United
            Nations Framework Convention on Climate Change related to
            greenhouse gas emissions from deforestation.

    ``SEC. 756. LEGAL EFFECT OF PART.

                ``(1) In general.--Nothing in this part supersedes, limits,
            or otherwise affects any restriction imposed by Federal law
            (including regulations) on any interaction between an entity
            located in the United States and an entity located in a foreign
            country.
                ``(2) Role of the secretary of state.--Nothing in this part
            shall be construed as affecting the role of the Secretary of
            State or the responsibilities of the Secretary under section
            622(c) of the Foreign Assistance Act of 1961.''.

    SEC. 312. DEFINITIONS.

        Title VII of the Clean Air Act, as added by section 311 of this
    Act, is amended by inserting before part A the following new section:

    ``SEC. 700. DEFINITIONS.

        ``In this title:
                ``(1) Additional.--The term `additional', when used with
            respect to reductions or avoidance of greenhouse gas emissions,
            or to sequestration of greenhouse gases, means reductions,
            avoidance, or sequestration that result in a lower level of net
            greenhouse gas emissions or atmospheric concentrations than
            would occur in the absence of an offset project.
                ``(2) Additionality.--The term `additionality' means the
            extent to which reductions or avoidance of greenhouse gas
            emissions, or sequestration of greenhouse gases, are
            additional.
                ``(3) Advisory board.--The term `Advisory Board' means the
            Offsets Integrity Advisory Board established under section 731.
                ``(4) Affiliated.--The term `affiliated'--
                        ``(A) when used in relation to an entity means
                    owned or controlled by, or under common ownership or
                    control with, another entity, as determined by the
                    Administrator; and
                        ``(B) when used in relation to a natural gas local
                    distribution company, means owned or controlled by, or
                    under common ownership or control with, another natural
                    gas local distribution company, as determined by the
                    Administrator.
                ``(5) Allowance.--The term `allowance' means a limited
            authorization to emit, or have attributable greenhouse gas
            emissions in an amount of, 1 ton of carbon dioxide equivalent
            of a greenhouse gas in accordance with this title. Such term
            includes an emission allowance, a compensatory allowance, and
            an international emission allowance, but does not include an
            international reserve allowance established under section 766.
                ``(6) Attributable greenhouse gas emissions.--The term
            `attributable greenhouse gas emissions', for a given calendar
            year, means--
                        ``(A) for a covered entity that is a fuel producer
                    or importer described in paragraph (13)(B), greenhouse
                    gases that would be emitted from the combustion of any
                    petroleum-based or coal-based liquid fuel, petroleum
                    coke, or natural gas liquid, produced or imported by
                    that covered entity during that calendar year for sale
                    or distribution in interstate commerce, assuming no
                    capture and sequestration of any greenhouse gas
                    emissions;
                        ``(B) for a covered entity that is an industrial
                    gas producer or importer described in paragraph
                    (13)(C), the tons of carbon dioxide equivalent of any
                    gas described in clauses (i) through (vi) of paragraph
                    (13)(C)--
                                ``(i) produced or imported by such covered
                            entity during that calendar year for sale or
                            distribution in interstate commerce; or
                                ``(ii) released as fugitive emissions in
                            the production of fluorinated gas; and
                        ``(C) for a natural gas local distribution company
                    described in paragraph (13)(J), greenhouse gases that
                    would be emitted from the combustion of the natural
                    gas, and any other gas meeting the specifications for
                    commingling with natural gas for purposes of delivery,
                    that such entity delivered during that calendar year to
                    customers that are not covered entities, assuming no
                    capture and sequestration of that greenhouse gas.
                ``(7) Biological sequestration; biologically sequestered.--
            The terms `biological sequestration' and `biologically
            sequestered' mean the removal of greenhouse gases from the
            atmosphere by terrestrial biological means, such as by growing
            plants, and the storage of those greenhouse gases in plants or
            soils.
                ``(8) Capped emissions.--The term `capped emissions' means
            greenhouse gas emissions to which section 722 applies,
            including emissions from the combustion of natural gas,
            petroleum-based or coal-based liquid fuel, petroleum coke, or
            natural gas liquid to which section 722(b)(2) or (8) applies.
                ``(9) Capped source.--The term `capped source' means a
            source that directly emits capped emissions.
                ``(10) Carbon dioxide equivalent.--The term `carbon dioxide
            equivalent' means the unit of measure, expressed in metric
            tons, of greenhouse gases as provided under section 711 or 712.
                ``(11) Carbon stock.--The term `carbon stock' means the
            quantity of carbon contained in a biological reservoir or
            system which has the capacity to accumulate or release carbon.
                ``(12) Compensatory allowance.--The term `compensatory
            allowance' means an allowance issued under section 721(f).
                ``(13) Covered entity.--The term `covered entity' means
            each of the following:
                        ``(A) Any electricity source.
                        ``(B) Any stationary source that produces, and any
                    entity that (or any group of two or more affiliated
                    entities that, in the aggregate) imports, for sale or
                    distribution in interstate commerce in 2008 or any
                    subsequent year, petroleum-based or coal-based liquid
                    fuel, petroleum coke, or natural gas liquid, the
                    combustion of which would emit 25,000 or more tons of
                    carbon dioxide equivalent, as determined by the
                    Administrator.
                        ``(C) Any stationary source that produces, and any
                    entity that (or any group of two or more affiliated
                    entities that, in the aggregate) imports, for sale or
                    distribution in interstate commerce, in bulk, or in
                    products designated by the Administrator, in 2008 or
                    any subsequent year 25,000 or more tons of carbon
                    dioxide equivalent of--
                                ``(i) fossil fuel-based carbon dioxide;
                                ``(ii) nitrous oxide;
                                ``(iii) perfluorocarbons;
                                ``(iv) sulfur hexafluoride;
                                ``(v) any other fluorinated gas, except for
                            nitrogen trifluoride, that is a greenhouse gas,
                            as designated by the Administrator under
                            section 711; or
                                ``(vi) any combination of greenhouse gases
                            described in clauses (i) through (v).
                        ``(D) Any stationary source that has emitted 25,000
                    or more tons of carbon dioxide equivalent of nitrogen
                    trifluoride in 2008 or any subsequent year.
                        ``(E) Any geologic sequestration site.
                        ``(F) Any stationary source in the following
                    industrial sectors:
                                ``(i) Adipic acid production.
                                ``(ii) Primary aluminum production.
                                ``(iii) Ammonia manufacturing.
                                ``(iv) Cement production, excluding
                            grinding-only operations.
                                ``(v) Hydrochlorofluorocarbon production.
                                ``(vi) Lime manufacturing.
                                ``(vii) Nitric acid production.
                                ``(viii) Petroleum refining.
                                ``(ix) Phosphoric acid production.
                                ``(x) Silicon carbide production.
                                ``(xi) Soda ash production.
                                ``(xii) Titanium dioxide production.
                                ``(xiii) Coal-based liquid or gaseous fuel
                            production.
                        ``(G) Any stationary source in the chemical or
                    petrochemical sector that, in 2008 or any subsequent
                    year--
                                ``(i) produces acrylonitrile, carbon black,
                            ethylene, ethylene dichloride, ethylene oxide,
                            or methanol; or
                                ``(ii) produces a chemical or petrochemical
                            product if producing that product results in
                            annual combustion plus process emissions of
                            25,000 or more tons of carbon dioxide
                            equivalent.
                        ``(H) Any stationary source that--
                                ``(i) is in one of the following industrial
                            sectors: ethanol production; ferroalloy
                            production; fluorinated gas production; food
                            processing; glass production; hydrogen
                            production; iron and steel production; lead
                            production; pulp and paper manufacturing; and
                            zinc production; and
                                ``(ii) has emitted 25,000 or more tons of
                            carbon dioxide equivalent in 2008 or any
                            subsequent year.
                        ``(I) Any fossil fuel-fired combustion device (such
                    as a boiler) or grouping of such devices that--
                                ``(i) is all or part of an industrial
                            source not specified in subparagraph (D), (F),
                            (G), or (H); and
                                ``(ii) has emitted 25,000 or more tons of
                            carbon dioxide equivalent in 2008 or any
                            subsequent year.
                        ``(J) Any natural gas local distribution company
                    that (or any group of 2 or more affiliated natural gas
                    local distribution companies that, in the aggregate),
                    in 2008 or any subsequent year, delivers 460,000,000
                    cubic feet or more of natural gas, and any other gas
                    meeting the specifications for commingling with natural
                    gas for purposes of delivery, to customers that are not
                    covered entities.
                ``(14) Crediting period.--The term `crediting period' means
            the period with respect to which an offset project is eligible
            to earn offset credits under part D, as determined under
            section 734(c).
                ``(15) Designated representative.--The term `designated
            representative' means, with respect to a covered entity, a
            reporting entity (as defined in section 713), an offset project
            developer, or any other entity receiving or holding allowances,
            offset credits, or term offset credits under this title, an
            individual authorized, through a certificate of representation
            submitted to the Administrator by the owners and operators or
            similar entity official, to represent the owners and operators
            or similar entity official in all matters pertaining to this
            title (including the holding, transfer, or disposition of
            allowances or offset credits), and to make all submissions to
            the Administrator under this title.
                ``(16) Developing country.--The term `developing country'
            means a country eligible to receive official development
            assistance according to the income guidelines of the
            Development Assistance Committee of the Organization for
            Economic Cooperation and Development.
                ``(17) Domestic offset credit.--For purposes of part D, the
            term `domestic offset credit' means an offset credit issued
            under part D, other than an international offset credit. For
            purposes of part C, the term means any offset credit issued
            under the American Clean Energy and Security Act of 2009, or
            the amendments made thereby. The term does not include a term
            offset credit.
                ``(18) Electricity source.--The term `electricity source'
            means a stationary source that includes one or more utility
            units.
                ``(19) Emission.--The term `emission' means the release of
            a greenhouse gas into the ambient air. Such term does not
            include gases that are captured and geologically sequestered,
            except to the extent that they are later released into the
            atmosphere, in which case compliance must be demonstrated
            pursuant to section 722(b)(5).
                ``(20) Emission allowance.--The term `emission allowance'
            means an allowance established under section 721(a) or section
            726(g)(2) or (h)(1)(C).
                ``(21) Fair market value.--The term `fair market value'
            means the average daily closing price on registered exchanges
            or, if such a price is unavailable, the average price as
            determined by the Administrator, during a specified time
            period, of an emission allowance.
                ``(22) Federal land.--The term `Federal land' means land
            that is owned by the United States, other than land held in
            trust for an Indian or Indian tribe.
                ``(23) Fossil fuel.--The term `fossil fuel' means natural
            gas, petroleum, or coal, or any form of solid, liquid, or
            gaseous fuel derived from such material, including consumer
            products that are derived from such materials and are
            combusted.
                ``(24) Fossil fuel-fired.--The term `fossil fuel-fired'
            means powered by combustion of fossil fuel, alone or in
            combination with any other fuel, regardless of the percentage
            of fossil fuel consumed.
                ``(25) Fugitive emissions.--The term `fugitive emissions'
            means emissions from leaks, valves, joints, or other small
            openings in pipes, ducts, or other equipment, or from vents.
                ``(26) Geologic sequestration; geologically sequestered.--
            The terms `geologic sequestration' and `geologically
            sequestered' mean the sequestration of greenhouse gases in
            subsurface geologic formations for purposes of permanent
            storage.
                ``(27) Geologic sequestration site.--The term `geologic
            sequestration site' means a site where carbon dioxide is
            geologically sequestered.
                ``(28) Greenhouse gas.--The term `greenhouse gas' means any
            gas described in section 711(a) or designated under section
            711, except to the extent that it is regulated under title VI.
                ``(29) Hold.--The term `hold' means, with respect to an
            allowance, offset credit, or term offset credit, to have in the
            appropriate account in the allowance tracking system
            established under section 724(d), or submit to the
            Administrator for recording in such account.
                ``(30) Industrial source.--The term `industrial source'
            means any stationary source that--
                        ``(A) is not an electricity source; and
                        ``(B) is in--
                                ``(i) the manufacturing sector (as defined
                            in North American Industrial Classification
                            System codes 31, 32, and 33); or
                                ``(ii) the natural gas processing or
                            natural gas pipeline transportation sector (as
                            defined in North American Industrial
                            Classification System codes 211112 and 486210).
                ``(31) International emission allowance.--The term
            `international emission allowance' means a tradable
            authorization to emit 1 ton of carbon dioxide equivalent of
            greenhouse gas that is issued by a national or supranational
            foreign government pursuant to a qualifying international
            program designated by the Administrator pursuant to section
            728(a).
                ``(32) International offset credit.--The term
            `international offset credit' means an offset credit issued by
            the Administrator under section 743.
                ``(33) Leakage.--Except as provided in part F, the term
            `leakage' means a significant increase in greenhouse gas
            emissions, or significant decrease in sequestration, which is
            caused by an offset project or activities under part E and
            occurs outside the boundaries of the offset project or the
            relevant program or project under part E.
                ``(34) Mineral sequestration.--The term `mineral
            sequestration' means sequestration of carbon dioxide from the
            atmosphere by capturing carbon dioxide into a permanent
            mineral, such as the aqueous precipitation of carbonate
            minerals that results in the storage of carbon dioxide in a
            mineral form.
                ``(35) Natural gas liquid.--The term `natural gas liquid'
            means ethane, butane, isobutane, natural gasoline, and propane.
                ``(36) Natural gas local distribution company.--The term
            `natural gas local distribution company' has the meaning given
            the term `local distribution company' in section 2(17) of the
            Natural Gas Policy Act of 1978 (15 U.S.C. 3301(17)).
                ``(37) Offset credit.--For purposes of this section and
            part D, the term `offset credit' means an offset credit issued
            under part D. For purposes of part C, the term means any offset
            credit issued under the American Clean Energy and Security Act
            of 2009, or the amendments made thereby. The term does not
            include a term offset credit.
                ``(38) Offset project.--The term `offset project' means a
            project or activity that reduces or avoids greenhouse gas
            emissions, or sequesters greenhouse gases, and for which offset
            credits are or may be issued under part D.
                ``(39) Offset project developer.--The term `offset project
            developer' means the individual or entity designated as the
            offset project developer in an offset project approval petition
            under section 735(c)(1).
                ``(40) Petroleum.--The term `petroleum' includes crude oil,
            tar sands, oil shale, and heavy oils.
                ``(41) Renewable biomass.--The term `renewable biomass'
            means any of the following:
                        ``(A) Materials, pre-commercial thinnings, or
                    removed invasive species from National Forest System
                    land and public lands (as defined in section 103 of the
                    Federal Land Policy and Management Act of 1976 (43
                    U.S.C. 1702)), including those that are byproducts of
                    preventive treatments (such as trees, wood, brush,
                    thinnings, chips, and slash), that are removed as part
                    of a federally recognized timber sale, or that are
                    removed to reduce hazardous fuels, to reduce or contain
                    disease or insect infestation, or to restore ecosystem
                    health, and that are--
                                ``(i) not from components of the National
                            Wilderness Preservation System, Wilderness
                            Study Areas, Inventoried Roadless Areas, old
                            growth stands, late-successional stands (except
                            for dead, severely damaged, or badly infested
                            trees), components of the National Landscape
                            Conservation System, National Monuments,
                            National Conservation Areas, Designated
                            Primitive Areas, or Wild and Scenic Rivers
                            corridors;
                                ``(ii) harvested in environmentally
                            sustainable quantities, as determined by the
                            appropriate Federal land manager; and
                                ``(iii) harvested in accordance with
                            Federal and State law, and applicable land
                            management plans.
                        ``(B) Any organic matter that is available on a
                    renewable or recurring basis from non-Federal land or
                    land belonging to an Indian or Indian tribe that is
                    held in trust by the United States or subject to a
                    restriction against alienation imposed by the United
                    States, including--
                                ``(i) renewable plant material, including--
                                        ``(I) feed grains;
                                        ``(II) other agricultural
                                    commodities;
                                        ``(III) other plants and trees; and
                                        ``(IV) algae; and
                                ``(ii) waste material, including--
                                        ``(I) crop residue;
                                        ``(II) other vegetative waste
                                    material (including wood waste and wood
                                    residues);
                                        ``(III) animal waste and byproducts
                                    (including fats, oils, greases, and
                                    manure);
                                        ``(IV) construction waste; and
                                        ``(V) food waste and yard waste.
                        ``(C) Residues and byproducts from wood, pulp, or
                    paper products facilities.
                ``(42) Retire.--The term `retire', with respect to an
            allowance, offset credit, or term offset credit, established or
            issued under the American Clean Energy and Security Act of 2009
            or the amendments made thereby, means to disqualify such
            allowance or offset credit for any subsequent use under this
            title, regardless of whether the use is a sale, exchange, or
            submission of the allowance, offset credit, or term offset
            credit to satisfy a compliance obligation.
                ``(43) Reversal.--The term `reversal' means an intentional
            or unintentional loss of sequestered greenhouse gases to the
            atmosphere.
                ``(44) Sequestered and sequestration.--The terms
            `sequestered' and `sequestration' mean the separation,
            isolation, or removal of greenhouse gases from the atmosphere,
            as determined by the Administrator. The terms include
            biological, geologic, and mineral sequestration, but do not
            include ocean fertilization techniques.
                ``(45) Stationary source.--The term `stationary source'
            means any integrated operation comprising any plant, building,
            structure, or stationary equipment, including support buildings
            and equipment, that is located within one or more contiguous or
            adjacent properties, is under common control of the same person
            or persons, and emits or may emit a greenhouse gas.
                ``(46) Strategic reserve allowance.--The term `strategic
            reserve allowance' means an emission allowance reserved for,
            transferred to, or deposited in the strategic reserve under
            section 726.
                ``(47) Ton.--The term `ton' means metric ton.
                ``(48) Uncapped emissions.--The term `uncapped emissions'
            means emissions of greenhouse gases emitted after December 31,
            2011, that are not capped emissions.
                ``(49) United states greenhouse gas emissions.--The term
            `United States greenhouse gas emissions' means the total
            quantity of annual greenhouse gas emissions from the United
            States, as calculated by the Administrator and reported to the
            United Nations Framework Convention on Climate Change
            Secretariat.
                ``(50) Utility unit.--The term `utility unit' means a
            combustion device that, on January 1, 2009, or any date
            thereafter, is fossil fuel-fired and serves a generator that
            produces electricity for sale, unless such combustion device,
            during the 12-month period starting the later of January 1,
            2009, or the commencement of commercial operation and each
            calendar year starting after such later date--
                        ``(A) is part of an integrated cycle system that
                    cogenerates steam and electricity during normal
                    operation and that supplies one-third or less of its
                    potential electric output capacity and 25 MW or less of
                    electrical output for sale; or
                        ``(B) combusts materials of which more than 95
                    percent is municipal solid waste on a heat input basis.
                ``(51) Vintage year.--The term `vintage year' means the
            calendar year for which an emission allowance is established
            under section 721(a) or which is assigned to an emission
            allowance under section 726(g)(3)(A), except that the vintage
            year for a strategic reserve allowance shall be the year in
            which such allowance is purchased at auction.''.

                     Subtitle B--Disposition of Allowances

    SEC. 321. DISPOSITION OF ALLOWANCES FOR GLOBAL WARMING POLLUTION
                  REDUCTION PROGRAM.

        Title VII of the Clean Air Act, as added by section 311 of this
    Act, is amended by adding at the end the following part:

                      ``PART H--DISPOSITION OF ALLOWANCES

    ``SEC. 781. ALLOCATION OF ALLOWANCES FOR SUPPLEMENTAL REDUCTIONS.

        ``(a) In General.--The Administrator shall allocate for each
    vintage year the following percentage of the emission allowances
    established under section 721(a), for distribution in accordance with
    part E:
                ``(1) For vintage years 2012 through 2025, 5 percent.
                ``(2) For vintage years 2026 through 2030, 3 percent.
                ``(3) For vintage years 2031 through 2050, 2 percent.
        ``(b) Adjustment.--The Administrator shall modify the percentages
    set forth in subsection (a) as necessary to ensure the achievement of
    the annual supplemental emission reduction objective for 2020, and the
    cumulative reduction objective through 2025, set forth in section
    753(b)(1).
        ``(c) Carryover.--If the Administrator has not distributed all of
    the allowances allocated pursuant to this section for a given vintage
    year by the end of that year, all such undistributed emission
    allowances shall, in accordance with section 782(s), be exchanged for
    allowances from the following vintage year and treated as part of the
    allocation for supplemental reductions under this section for that
    later vintage year.

    ``SEC. 782. ALLOCATION OF EMISSION ALLOWANCES.

        ``(a) Electricity Consumers.--(1) The Administrator shall allocate
    emission allowances for the benefit of electricity consumers, to be
    distributed in accordance with section 783(b), (c), and (d) in the
    following amounts:
                ``(A) For vintage years 2012 and 2013: 43.75 percent of the
            emission allowances established for each year under section
            721(a).
                ``(B) For vintage years 2014 and 2015: 38.89 percent of the
            emission allowances established for each year under section
            721(a).
                ``(C) For vintage years 2016 through 2025: 35.00 percent of
            the emission allowances established for each year under section
            721(a).
                ``(D) For vintage year 2026: 28 percent of the emission
            allowances established for that year under section 721(a).
                ``(E) For vintage year 2027: 21 percent of the emission
            allowances established for that year under section 721(a).
                ``(F) For vintage year 2028: 14 percent of the emission
            allowances established for that year under section 721(a).
                ``(G) For vintage year 2029: 7 percent of the emission
            allowances established for that year under section 721(a).
        ``(2) The Administrator shall allocate emission allowances for
    energy efficiency, renewable electricity, and low income ratepayer
    assistance programs administered by small electricity local
    distribution companies, to be distributed in accordance with section
    783(e) in the following amounts:
                ``(A) For vintage years 2012 through 2025: 0.5 percent of
            the emission allowances established each year under section
            721(a).
                ``(B) For vintage year 2026: 0.4 percent of the emission
            allowances established for that year under section 721(a).
                ``(C) For vintage year 2027: 0.3 percent of the emission
            allowances established for that year under section 721(a).
                ``(D) For vintage year 2028: 0.2 percent of the emission
            allowances established for that year under section 721(a).
                ``(E) For vintage year 2029: 0.1 percent of the emission
            allowances established for that year under section 721(a).
        ``(3) For vintage year 2012, the Administrator shall allocate 0.35
    percent of emission allowances established for such year under section
    721(a) to avoid disincentives to the continued use of existing energy-
    efficient cogeneration facilities at industrial parks, to be
    distributed in accordance with section 783(f).
        ``(b) Natural Gas Consumers.--The Administrator shall allocate
    emission allowances for the benefit of natural gas consumers to be
    distributed in accordance with section 784 in the following amounts:
                ``(1) For vintage years 2016 through 2025, 9 percent of the
            emission allowances established for each year under section
            721(a).
                ``(2) For vintage year 2026, 7.2 percent of the emission
            allowances established for that year under section 721(a).
                ``(3) For vintage year 2027, 5.4 percent of the emission
            allowances established for that year under section 721(a).
                ``(4) For vintage year 2028, 3.6 percent of the emission
            allowances established for that year under section 721(a).
                ``(5) For vintage year 2029, 1.8 percent of the emission
            allowances established for that year under section 721(a).
        ``(c) Home Heating Oil and Propane Consumers.--The Administrator
    shall allocate emission allowances for the benefit of home heating oil
    and propane consumers to be distributed in accordance with section 785
    in the following amounts:
                ``(1) For vintage years 2012 and 2013, 1.875 percent of the
            emission allowances established for each year under section
            721(a).
                ``(2) For vintage years 2014 and 2015, 1.67 percent of the
            emission allowances established for each year under section
            721(a).
                ``(3) For vintage years 2016 through 2025, 1.5 percent of
            the emission allowances established for each year under section
            721(a).
                ``(4) For vintage year 2026, 1.2 percent of the emission
            allowances established for that year under section 721(a).
                ``(5) For vintage year 2027, 0.9 percent of the emission
            allowances established for that year under section 721(a).
                ``(6) For vintage year 2028, 0.6 percent of the emission
            allowances established for that year under section 721(a).
                ``(7) For vintage year 2029, 0.3 percent of the emission
            allowances established for that year under section 721(a).
        ``(d) Low Income Consumers.--For each vintage year starting in
    2012, the Administrator shall auction, pursuant to section 791, 15
    percent of the emission allowances established for each year under
    section 721(a), with the proceeds used for the benefit of low income
    consumers to fund the program set forth in subtitle C of title IV of
    American Clean Energy and Security Act of 2009 and the amendments made
    thereby.
        ``(e) Trade-vulnerable Industries.--
                ``(1) In general.--The Administrator shall allocate
            emission allowances to energy-intensive, trade-exposed
            entities, to be distributed in accordance with section 765, in
            the following amounts:
                        ``(A) For vintage years 2012 and 2013, up to 2.0
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage year 2014, up to 15 percent of
                    the emission allowances established for that year under
                    section 721(a).
                        ``(C) For vintage year 2015, up to the product of--
                                ``(i) the amount specified in paragraph
                            (2); multiplied by
                                ``(ii) the quantity of emission allowances
                            established for 2015 under section 721(a)
                            divided by the quantity of emission allowances
                            established for 2014 under section 721(a).
                        ``(D) For vintage year 2016, up to the product of--
                                ``(i) the amount specified in paragraph
                            (3); multiplied by
                                ``(ii) the quantity of emission allowances
                            established for 2015 under section 721(a)
                            divided by the quantity of emission allowances
                            established for 2014 under section 721(a).
                        ``(E) For vintage years 2017 through 2025, up to
                    the product of--
                                ``(i) the amount specified in paragraph
                            (4); multiplied by
                                ``(ii) the quantity of emission allowances
                            established for that year under section 721(a)
                            divided by the quantity of emission allowances
                            established for 2016 under section 721(a).
                        ``(F) For vintage years 2026 through 2050, up to
                    the product of the amount specified in paragraph (4)--
                                ``(i) multiplied by the quantity of
                            emission allowances established for the
                            applicable year during 2026 through 2050 under
                            section 721(a) divided by the quantity of
                            emission allowances established for 2016 under
                            section 721(a); and
                                ``(ii) multiplied by a factor that shall
                            equal 90 percent for 2026 and decline 10
                            percent for each year thereafter until reaching
                            zero, except that, if the President modifies a
                            percentage for a year under subparagraph (A) of
                            section 767(c)(3), the highest percentage the
                            President applies for any sector under that
                            subparagraph for that year (not exceeding 100
                            percent) shall be used for that year instead of
                            the factor otherwise specified in this clause.
                ``(2) Carryover.--After the Administrator distributes
            emission allowances pursuant to section 765 for any given
            vintage year, any emission allowances allocated to energy-
            intensive, trade-exposed entities pursuant to this subsection
            that have not been so distributed shall, in accordance with
            subsection (s), be exchanged for allowances from the following
            vintage year and treated as part of the allocation to such
            entities for that later vintage year.
        ``(f) Deployment of Carbon Capture and Sequestration Technology.--
                ``(1) Annual allocation.--The Administrator shall allocate
            emission allowances for the deployment of carbon capture and
            sequestration technology to be distributed in accordance with
            section 786 in the following amounts:
                        ``(A) For vintage years 2014 through 2017, 1.75
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage years 2018 and 2019, 4.75 percent
                    of the emission allowances established for each year
                    under section 721(a).
                        ``(C) For vintage years 2020 through 2050, 5
                    percent of the emission allowances established for each
                    year under section 721(a).
                ``(2) Carryover.--If the Administrator has not distributed
            all of the allowances allocated pursuant to this subsection for
            a given vintage year by the end of that year, all such
            undistributed emission allowances shall, in accordance with
            subsection (s), be exchanged for allowances from the following
            vintage year and treated as part of the allocation for the
            deployment of carbon capture and sequestration technology under
            this subsection for that later vintage year.
        ``(g) Investment in Energy Efficiency and Renewable Energy.--The
    Administrator shall allocate emission allowances to invest in energy
    efficiency and renewable energy as follows:
                ``(1) To be distributed in accordance with section 132 of
            the American Clean Energy and Security Act of 2009 in the
            following amounts:
                        ``(A) For vintage years 2012 through 2015, 9.5
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage years 2016 through 2017, 6.5
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(C) For vintage years 2018 through 2021, 5.5
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(D) For vintage years 2022 through 2025, 1.0
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(E) For vintage years 2026 through 2050, 4.5
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(F) At the same time allowances are distributed
                    under subparagraph (D) for each of the vintage years
                    2022 through 2025, 3.55 percent of emission allowances
                    established under section 721(a) for the vintage year 4
                    years after that vintage year shall also be distributed
                    (which shall be in addition to the emission allowances
                    distributed under subparagraph (E)).
                ``(2) To be distributed in accordance with section 304 of
            the Energy Conservation and Production Act, as amended by
            section 201 of the American Clean Energy and Security Act of
            2009, for each vintage year from 2012 through 2050, 0.5 percent
            of emission allowances established for that year under section
            721(a).
                ``(3) To be distributed among the States in accordance with
            the formula in section 132(b) of the American Clean Energy and
            Security Act of 2009 and to be used exclusively for the
            purposes of section 202 of the American Clean Energy and
            Security Act of 2009 in the following amounts:
                        ``(A) For vintage years 2012 through 2017, 0.05
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage years 2018 through 2050, 0.03
                    percent of the emission allowances established for each
                    year under section 721(a).
        ``(h) Energy Research and Development.--
                ``(1) Energy innovation hubs.--For vintage years 2012
            through 2050, the Administrator shall allocate 0.45 percent of
            the emission allowances established under section 721(a) to be
            distributed to Energy Innovation Hubs in accordance with
            section 171 of the American Clean Energy and Security Act of
            2009.
                ``(2) Advanced energy research.--For vintage years 2012
            through 2050, the Administrator shall allocate 1.05 percent of
            the emission allowances established under section 721(a) for
            the Advanced Research Project Agency-Energy to be distributed
            in accordance with section 172 of the American Clean Energy and
            Security Act of 2009.
        ``(i) Investment in Clean Vehicle Technology.--The Administrator
    shall allocate emission allowances to invest in the development and
    deployment of clean vehicles, to be distributed in accordance with
    section 124 of the American Clean Energy and Security Act of 2009 in
    the following amounts:
                ``(1) For vintage years 2012 through 2017, 3 percent of the
            emission allowances established for each year under section
            721(a).
                ``(2) For vintage years 2018 through 2025, 1 percent of the
            emission allowances established for each year under section
            721(a).
        ``(j) Domestic Fuel Production.--For vintage years 2014 through
    2026, the Administrator shall allocate and distribute according to
    section 787--
                ``(1) 2 percent of the emission allowances established for
            each year under section 721(a) to domestic petroleum refineries
            that are covered entities pursuant to section 700(13)(F)(viii),
            including small business refiners; and
                ``(2) an additional 0.25 percent of the emissions
            allowances established for each year under section 721(a) to
            small business refiners that are covered entities pursuant to
            section 700(13)(F)(viii).
        ``(k) Investment in Workers.--(1) The Administrator shall auction
    pursuant to section 791 emission allowances for the benefit of workers
    pursuant to part 2 of subtitle B of the American Clean Energy and
    Security Act of 2009 in the following amounts, and shall deposit into
    the Climate Change Worker Adjustment Assistance Fund established
    pursuant to section 793, and report to the Secretary of Labor on, the
    proceeds from the sale of these allowances:
        ``(A) For vintage years 2012 through 2021, 0.5 percent of the
    emission allowances established for each year under section 721(a).
        ``(B) For vintage years 2022 through 2050, 1.0 percent of the
    emission allowances established for each year under section 721(a).
    All amounts deposited into the fund shall be available to the Secretary
    of Labor until expended to carry out part 2 of subtitle B of title IV
    of the American Clean Energy and Security Act of 2009. Of the amounts
    deposited, not more than $10,000,000 shall be available to the
    Secretary of Labor for Federal administration costs of such part 2 each
    fiscal year.
        ``(2) The Administrator shall auction, pursuant to section 791,
    0.75 percent of the emission allowances established for each of vintage
    years 2012 and 2013 under section 721(a), and shall deposit the
    proceeds in the Energy Efficiency and Renewable Energy Worker Training
    Fund established by section 422 of the American Clean Energy and
    Security Act of 2009.
        ``(l) Domestic Adaptation.--The Administrator shall allocate
    emission allowances for domestic adaptation as follows:
                ``(1) To be distributed in accordance with section 453 of
            the American Clean Energy and Security Act of 2009 in the
            following amounts:
                        ``(A) For vintage years 2012 through 2021, 0.9
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage years 2022 through 2026, 1.9
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(C) For vintage years 2027 through 2050, 3.9
                    percent of the emission allowances established for each
                    year under section 721(a).
                ``(2) For vintage year 2012 and thereafter, the
            Administrator shall auction, pursuant to section 791, 0.1
            percent of the emission allowances established for each year
            under section 721(a), and shall deposit the proceeds in the
            Climate Change Health Protection and Promotion Fund established
            by section 467 of the American Clean Energy and Security Act of
            2009.
        ``(m) Wildlife and Natural Resource Adaptation.--The Administrator
    shall allocate emission allowances for wildlife and natural resource
    adaptation as follows:
                ``(1) To be distributed to State agencies in accordance
            with section 480(a) of the American Clean Energy and Security
            Act of 2009 in the following amounts:
                        ``(A) For vintage years 2012 through 2021, 0.385
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage years 2022 through 2026, 0.77
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(C) For vintage years 2027 through 2050, 1.54
                    percent of the emission allowances established for each
                    year under section 721(a).
                ``(2) To be auctioned pursuant to section 791, with the
            proceeds to be deposited in the Natural Resources Climate
            Change Adaptation Fund established pursuant to section 480(b),
            in the following amounts:
                        ``(A) For vintage years 2012 through 2021, 0.615
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(B) For vintage years 2022 through 2026, 1.23
                    percent of the emission allowances established for each
                    year under section 721(a).
                        ``(C) For vintage years 2027 through 2050, 2.46
                    percent of the emission allowances established for each
                    year under section 721(a).
        ``(n) International Adaptation.--The Administrator shall allocate
    emission allowances for international adaptation to be distributed in
    accordance with part 2 of subtitle E of title IV of the American Clean
    Energy and Security Act of 2009 in the following amounts:
                ``(1) For vintage years 2012 through 2021, 1.0 percent of
            the emission allowances established for each year under section
            721(a).
                ``(2) For vintage years 2022 through 2026, 2.0 percent of
            the emission allowances established for each year under section
            721(a).
                ``(3) For vintage years 2027 through 2050, 4.0 percent of
            the emission allowances established for each year under section
            721(a).
        ``(o) International Clean Technology Deployment.--The Administrator
    shall allocate emission allowances for international clean technology
    deployment for distribution in accordance with subtitle D of title IV
    of the American Clean Energy and Security Act of 2009 in the following
    amounts:
                ``(1) For vintage years 2012 through 2021, 1.0 percent of
            the emission allowances established for each year under section
            721(a).
                ``(2) For vintage years 2022 through 2026, 2.0 percent of
            the emission allowances established for each year under section
            721(a).
                ``(3) For vintage years 2027 through 2050, 4.0 percent of
            the emission allowances established for each year under section
            721(a).
        ``(p) Release of Future Allowances.--The Administrator shall make
    future year allowances available by auctioning allowances, pursuant to
    section 791, in the following amounts:
                ``(1) In each of calendar years 2014 through 2019, a string
            of 0.70 billion allowances with vintage years 12 to 17 years
            after the year of the auction, with an equal number of
            allowances from each vintage year in the string.
                ``(2) In each of calendar years 2020 through 2025, a string
            of 0.50 billion allowances with vintage years 12 to 17 years
            after the year of the auction, with an equal number of
            allowances from each vintage year in the string.
                ``(3) In each of calendar years 2026 through 2030, a string
            of 0.3 billion allowances with vintage years 12 to 17 years
            after the year of the auction, with an equal number of
            allowances from each vintage year in the string.
        ``(q) Deficit Reduction.--
                ``(1) For each of vintage years 2012 through 2025, any
            allowances not allocated for distribution or auction pursuant
            to section 781 or subsections (a) through (o) and subsections
            (s) and (t) of this section, or disbursed pursuant to section
            790, shall be auctioned by the Administrator pursuant to
            section 791 and the proceeds shall be deposited into the
            Treasury.
                ``(2) Unless otherwise specified, any allowances allocated
            pursuant to subsections (a) through (o) and subsections (s) and
            (t) and not distributed by March 31 of the calendar year
            following the allowance's vintage year, shall be auctioned by
            the Administrator and the proceeds shall be deposited into the
            Treasury.
                ``(3) For auctions conducted through calendar year 2020
            pursuant to subsection (p), the auction proceeds shall be
            deposited into the Treasury.
        ``(r) Climate Change Consumer Refund.--
                ``(1) For each of vintage years 2026 through 2050, the
            Administrator shall auction the following allowances
            established under section 721(a) and deposit the proceeds into
            the Climate Change Consumer Refund Account:
                        ``(A) Any allowances not allocated for distribution
                    or auction pursuant to section 781 or subsections (a)
                    through (p) of this section, or disbursed pursuant to
                    section 790.
                        ``(B) Unless otherwise specified, any allowances
                    allocated pursuant to subsections (a) through (o) and
                    not distributed by March 31 of the calendar year
                    following the allowance's vintage year.
                ``(2) For auctions conducted pursuant to subsection (p) in
            calendar years 2021 and thereafter, the Administrator shall
            place the proceeds from the sales of the these allowances into
            the Climate Change Consumer Refund Account.
                ``(3) Funds deposited into the Climate Change Consumer
            Refund Account shall be used as specified in section 789 and
            shall be available for expenditure, without further
            appropriation or fiscal year limitation.
        ``(s) Treatment of Carryover Allowances.--
                ``(1) In general.--If there are undistributed allowances
            from a vintage year for supplemental reductions pursuant to
            section 781(c), energy-intensive, trade-exposed industries
            pursuant to subsection (e)(2) of this section, deployment of
            carbon capture and sequestration technology pursuant to
            subsection (f)(2) of this section, or supplemental agriculture
            and renewable energy pursuant to subsection (u)(2) of this
            section, the Administrator shall--
                        ``(A) use the undistributed allowances to increase
                    for the same vintage year--
                                ``(i) the allocation of allowances to be
                            auctioned for deficit reduction pursuant to
                            subsection (q) or for consumer refunds pursuant
                            to subsection (r);
                                ``(ii) the allocation of allowances to be
                            auctioned for low income consumers pursuant to
                            subsection (d); or
                                ``(iii) a combination of both; and
                        ``(B) except as provided in paragraph (2)--
                                ``(i) decrease by the same amount for the
                            following vintage year the allocation for the
                            purpose for which the allocation was increased
                            pursuant to subparagraph (A); and
                                ``(ii) increase by the same amount for the
                            following vintage year the allocation for the
                            purpose for which the undistributed allowances
                            were originally allocated.
                ``(2) Excess undistributed allowances.--(A) For each
            vintage year for which this subsection applies, the
            Administrator shall determine whether--
                        ``(i) the total quantity of undistributed
                    allowances for that vintage year that were allocated
                    pursuant to section 781(c), and subsections (e)(2),
                    (f)(2), and (u)(2) of this section, exceeds
                        ``(ii) the total quantity of allowances allocated
                    pursuant to subsection (d), (q) and (r) for the
                    following vintage year, decreased by the quantity of
                    allowances for that following vintage year set aside
                    for the reserve established by section 791(f).
                ``(B) If the Administrator determines under subparagraph
            (A) that the quantity described in subparagraph (A)(i) exceeds
            the quantity described in subparagraph (A)(ii), paragraph
            (1)(B)(ii) of this subsection shall not apply. Instead, for
            each purpose described in section 781(c), or subsections
            (e)(2), (f)(2), and (u)(2) of this section for which
            undistributed allowances for a given vintage year were
            allocated, the Administrator shall increase the allocation for
            the following vintage year by the amount that is the product
            of--
                        ``(i) the number of undistributed allowances for
                    that purpose, times
                        ``(ii) the quantity described in subparagraph
                    (A)(ii) divided by the quantity described in
                    subparagraph (A)(i).
        ``(t) Compensation for Early Actors.--For vintage year 2012, the
    Administrator shall allocate for compensation for early actors 1
    percent of emission allowances established under section 721(a), to be
    distributed in accordance with section 795 of the American Clean Energy
    and Security Act of 2009.
        ``(u) Supplemental Agriculture and Renewable Energy.--
                ``(1) In general.--For vintage years 2012 through 2016, the
            Administrator shall allocate 0.28 percent of emission
            allowances established under section 721(a), to be distributed
            in accordance with section 788 of the American Clean Energy and
            Security Act of 2009.
                ``(2) Carryover.--After the Administrator distributes
            emission allowances pursuant to section 788 for any given
            vintage year, any emission allowances allocated to supplemental
            agriculture and renewable energy pursuant to this subsection
            that have not been so distributed shall, in accordance with
            subsection (s), be exchanged for allowances from the following
            vintage year and treated as part of the allocation to such
            entities for that later vintage year.

    ``SEC. 783. ELECTRICITY CONSUMERS.

        ``(a) Definitions.--For purposes of this section:
                ``(1) Coal-fueled unit.--The term `coal-fueled unit' means
            a utility unit that derives at least 85 percent of its heat
            input from coal, petroleum coke, or any combination of these 2
            fuels.
                ``(2) Electricity local distribution company.--The term
            `electricity local distribution company' means an electric
            utility--
                        ``(A) that has a legal, regulatory, or contractual
                    obligation to deliver electricity directly to retail
                    consumers in the United States, regardless of whether
                    that entity or another entity sells the electricity as
                    a commodity to those retail consumers; and
                        ``(B) the retail rates of which, except in the case
                    of an electric cooperative, are regulated or set by--
                                ``(i) a State regulatory authority;
                                ``(ii) a State or political subdivision
                            thereof (or an agency or instrumentality of, or
                            corporation wholly owned by, either of the
                            foregoing); or
                                ``(iii) an Indian tribe pursuant to tribal
                            law.
                ``(3) Electricity savings; renewable energy resource.--The
            terms `electricity savings' and `renewable energy resource'
            shall have the meaning given those terms in section 610 of the
            Public Utility Regulatory Policies Act of 1978 (as added by
            section 101 of the American Clean Energy and Security Act of
            2009).
                ``(4) Independent power production facility.--The term
            `independent power production facility' means a facility--
                        ``(A) that is used for the generation of electric
                    energy, at least 80 percent of which is sold at
                    wholesale; and
                        ``(B) the sales of the output of which are not
                    subject to retail rate regulation or setting of retail
                    rates by--
                                ``(i) a State regulatory authority;
                                ``(ii) a State or political subdivision
                            thereof (or an agency or instrumentality of, or
                            corporation wholly owned by, either of the
                            foregoing);
                                ``(iii) an electric cooperative; or
                                ``(iv) an Indian tribe pursuant to tribal
                            law.
                ``(5) Long-term contract generator.--The term `long-term
            contract generator' means a qualifying small power production
            facility, a qualifying cogeneration facility ), an independent
            power production facility, or a facility for the production of
            electric energy for sale to others that is owned and operated
            by an electric cooperative that is--
                        ``(A) a covered entity; and
                        ``(B) as of the date of enactment of this title--
                                ``(i) a facility with 1 or more sales or
                            tolling agreements executed before March 1,
                            2007, that govern the facility's electricity
                            sales and provide for sales at a price (whether
                            a fixed price or a price formula) for
                            electricity that does not allow for recovery of
                            the costs of compliance with the limitation on
                            greenhouse gas emissions under this title,
                            provided that such agreements are not between
                            entities that are affiliates of one another; or
                                ``(ii) a facility consisting of 1 or more
                            cogeneration units that makes useful thermal
                            energy available to an industrial or commercial
                            process with 1 or more sales agreements
                            executed before March 1, 2007, that govern the
                            facility's useful thermal energy sales and
                            provide for sales at a price (whether a fixed
                            price or price formula) for useful thermal
                            energy that does not allow for recovery of the
                            costs of compliance with the limitation on
                            greenhouse gas emissions under this title,
                            provided that such agreements are not between
                            entities that are affiliates of one another.
                ``(6) Merchant coal unit.--The term `merchant coal unit'
            means a coal-fueled unit that--
                        ``(A) is or is part of a covered entity;
                        ``(B) is not owned by a Federal, State, or regional
                    agency or power authority; and
                        ``(C) generates electricity solely for sale to
                    others, provided that all or a portion of such sales
                    are made by a separate legal entity that--
                                ``(i) has a full or partial ownership or
                            leasehold interest in the unit, as certified in
                            accordance with such requirements as the
                            Administrator shall prescribe; and
                                ``(ii) is not subject to retail rate
                            regulation or setting of retail rates by--
                                        ``(I) a State regulatory authority;
                                        ``(II) a State or political
                                    subdivision thereof (or an agency or
                                    instrumentality of, or corporation
                                    wholly owned by, either of the
                                    foregoing);
                                        ``(III) an electric cooperative; or
                                        ``(IV) an Indian tribe pursuant to
                                    tribal law.
                ``(7) Merchant coal unit sales.--The term `merchant coal
            unit sales' means sales to others of electricity generated by a
            merchant coal unit that are made by the owner or leaseholder
            described in paragraph (6)(C).
                ``(8) New coal-fueled unit.--The term `new coal-fueled
            unit' means a coal-fueled unit that commenced operation on or
            after January 1, 2009 and before January 1, 2013.
                ``(9) New merchant coal unit.--The term `new merchant coal
            unit' means a merchant coal unit--
                        ``(A) that commenced operation on or after January
                    1, 2009 and before January 1, 2013; and
                        ``(B) the actual, on-site construction of which
                    commenced prior to January 1, 2009.
                ``(10) Qualifying small power production facility;
            qualifying cogeneration facility.--The terms `qualifying small
            power production facility' and `qualifying cogeneration
            facility' have the meanings given those terms in section
            3(17)(C) and 3(18)(B) of the Federal Power Act (16 U.S.C.
            796(17)(C) and 796(18)(B)).
                ``(11) Small ldc.--The term `small LDC' means, for any
            given year, an electricity local distribution company that
            delivered less than 4,000,000 megawatt hours of electric energy
            directly to retail consumers in the preceding year.
                ``(12) State regulatory authority.--The term `State
            regulatory authority' has the meaning given that term in
            section 3(17) of the Public Utility Regulatory Policies Act of
            1978 (16 U.S.C. 2602(17)).
                ``(13) Useful thermal energy.--The term `useful thermal
            energy'has the meaning given that term in section 371(7) of the
            Energy Policy and Conservation Act (42 U.S.C. 6341(7)).
        ``(b) Electricity Local Distribution Companies.--
                ``(1) Distribution of allowances.--Not later than September
            30, 2011, and each calendar year thereafter through 2028, the
            Administrator shall distribute to electricity local
            distribution companies for the benefit of retail ratepayers the
            quantity of emission allowances allocated for the following
            vintage year pursuant to section 782(a)(1). Notwithstanding the
            preceding sentence, the Administrator shall withhold from
            distribution under this subsection a quantity of emission
            allowances equal to the lesser of 14.3 percent of the quantity
            of emission allowances allocated under section 782(a)(1) for
            the relevant vintage year, or 105 percent of the emission
            allowances for the relevant vintage year that the Administrator
            anticipates will be distributed to merchant coal units and to
            long-term contract generators, respectively, under subsections
            (c) and (d). If not required by subsections (c) and (d) to
            distribute all of these reserved allowances, the Administrator
            shall distribute any remaining emission allowances to
            electricity local distribution companies in accordance with
            this subsection.
                ``(2) Distribution based on emissions.--
                        ``(A) In general.--For each vintage year, 50
                    percent of the emission allowances available for
                    distribution under paragraph (1), after reserving
                    allowances for distribution under subsections (c) and
                    (d), shall be distributed by the Administrator among
                    individual electricity local distribution companies
                    ratably based on the annual average carbon dioxide
                    emissions attributable to generation of electricity
                    delivered at retail by each such company during the
                    base period determined under subparagraph (B).
                        ``(B) Base period.--
                                ``(i) Vintage years 2012 and 2013.--For
                            vintage years 2012 and 2013, an electricity
                            local distribution company's base period shall
                            be--
                                        ``(I) calendar years 2006 through
                                    2008; or
                                        ``(II) any 3 consecutive calendar
                                    years between 1999 and 2008, inclusive,
                                    that such company selects, provided
                                    that the company timely informs the
                                    Administrator of such selection.
                                ``(ii) Vintage years 2014 and thereafter.--
                            For vintage years 2014 and thereafter, the base
                            period shall be--
                                        ``(I) the base period selected
                                    under clause (i); or
                                        ``(II) calendar year 2012, in the
                                    case of an electricity local
                                    distribution company that owns, co-
                                    owns, or purchases through a power
                                    purchase agreement (whether directly or
                                    through a cooperative arrangement) a
                                    substantial portion of the electricity
                                    generated by a new coal-fueled unit,
                                    provided that such company timely
                                    informs the Administrator of its
                                    election to use 2012 as its base
                                    period.
                        ``(C) Determination of emissions.--
                                ``(i) Determination for 1999-2008.--As part
                            of the regulations promulgated pursuant to
                            subsection (g), the Administrator, after
                            consultation with the Energy Information
                            Administration, shall determine the average
                            amount of carbon dioxide emissions attributable
                            to generation of electricity delivered at
                            retail by each electricity local distribution
                            company for each of the years 1999 through
                            2008, taking into account entities' electricity
                            generation, electricity purchases, and
                            electricity sales. In the case of any
                            electricity local distribution company that
                            owns, co-owns, or purchases through a power
                            purchase agreement (whether directly or through
                            a cooperative arrangement) a substantial
                            portion of the electricity generated by, a
                            coal-fueled unit that commenced operation after
                            January 1, 2006, and before December 31, 2008,
                            the Administrator shall adjust the emissions
                            attributable to such company's retail
                            deliveries in calendar years 2006 through 2008
                            to reflect the emissions that would have
                            occurred if the relevant unit were in operation
                            during the entirety of such 3-year period.
                                ``(ii) Adjustments for new coal-fueled
                            units.--
                                        ``(I) Vintage years 2012 and
                                    2013.--For purposes of emission
                                    allowance distributions for vintage
                                    years 2012 and 2013, in the case of any
                                    electricity local distribution company
                                    that owns, co-owns, or purchases
                                    through a power purchase agreement
                                    (whether directly or through a
                                    cooperative arrangement) a substantial
                                    portion of the electricity generated
                                    by, a new coal-fueled unit, the
                                    Administrator shall adjust the
                                    emissions attributable to such
                                    company's retail deliveries in the
                                    applicable base period to reflect the
                                    emissions that would have occurred if
                                    the new coal-fueled unit were in
                                    operation during such period.
                                        ``(II) Vintage year 2014 and
                                    thereafter.--Not later than necessary
                                    for use in making emission allowance
                                    distributions under this subsection for
                                    vintage year 2014, the Administrator
                                    shall, for any electricity local
                                    distribution company that owns, co-
                                    owns, or purchases through a power
                                    purchase agreement (whether directly or
                                    through a cooperative arrangement) a
                                    substantial portion of the electricity
                                    generated by a new coal-fueled unit and
                                    has selected calendar year 2012 as its
                                    base period pursuant to subparagraph
                                    (B)(ii)(II), determine the amount of
                                    carbon dioxide emissions attributable
                                    to generation of electricity delivered
                                    at retail by such company in calendar
                                    year 2012. If the relevant new coal-
                                    fueled unit was not yet operational by
                                    January 1, 2012, the Administrator
                                    shall adjust such determination to
                                    reflect the emissions that would have
                                    occurred if such unit were in operation
                                    for all of calendar year 2012.
                                ``(iii) Requirements.--Determinations under
                            this paragraph shall be as precise as
                            practicable, taking into account the nature of
                            data currently available and the nature of
                            markets and regulation in effect in various
                            regions of the country. The following
                            requirements shall apply to such
                            determinations:
                                        ``(I) The Administrator shall
                                    determine the amount of fossil fuel-
                                    based electricity delivered at retail
                                    by each electricity local distribution
                                    company, and shall use appropriate
                                    emission factors to calculate carbon
                                    dioxide emissions associated with the
                                    generation of such electricity.
                                        ``(II) Where it is not practical to
                                    determine the precise fuel mix for the
                                    electricity delivered at retail by an
                                    individual electricity local
                                    distribution company, the Administrator
                                    may use the best available data,
                                    including average data on a regional
                                    basis with reference to Regional
                                    Transmission Organizations or regional
                                    entities (as that term is defined in
                                    section 215(a)(7) of the Federal Power
                                    Act (16 U.S.C. 824o(a)(7)), to estimate
                                    fuel mix and emissions. Different
                                    methodologies may be applied in
                                    different regions if appropriate to
                                    obtain the most accurate estimate.
                ``(3) Distribution based on deliveries.--
                        ``(A) Initial formula.--Except as provided in
                    subparagraph (B), for each vintage year, the
                    Administrator shall distribute 50 percent of the
                    emission allowances available for distribution under
                    paragraph (1), after reserving allowances for
                    distribution under subsections (c) and (d), among
                    individual electricity local distribution companies
                    ratably based on each electricity local distribution
                    company's annual average retail electricity deliveries
                    for calendar years 2006 through 2008, unless the owner
                    or operator of the company selects 3 other consecutive
                    years between 1999 and 2008, inclusive, and timely
                    notifies the Administrator of its selection.
                        ``(B) Updating.--Prior to distributing 2015 vintage
                    year emission allowances under this paragraph and at 3-
                    year intervals thereafter, the Administrator shall
                    update the distribution formula under this paragraph to
                    reflect changes in each electricity local distribution
                    company's service territory since the most recent
                    formula was established. For each successive 3-year
                    period, the Administrator shall distribute allowances
                    ratably among individual electricity local distribution
                    companies based on the product of--
                                ``(i) each electricity local distribution
                            company's average annual deliveries per
                            customer during calendar years 2006 through
                            2008, or during the 3 alternative consecutive
                            years selected by such company under
                            subparagraph (A); and
                                ``(ii) the number of customers of such
                            electricity local distribution company in the
                            most recent year in which the formula is
                            updated under this subparagraph.
                ``(4) Prohibition against excess distributions.--The
            regulations promulgated under subsection (g) shall ensure that,
            notwithstanding paragraphs (2) and (3), no electricity local
            distribution company shall receive a greater quantity of
            allowances under this subsection than is necessary to offset
            any increased electricity costs to such company's retail
            ratepayers, including increased costs attributable to purchased
            power costs, due to enactment of this title. Any emission
            allowances withheld from distribution to an electricity local
            distribution company pursuant to this paragraph shall be
            distributed among all remaining electricity local distribution
            companies ratably based on emissions pursuant to paragraph (2).
                ``(5) Use of allowances.--
                        ``(A) Ratepayer benefit.--Emission allowances
                    distributed to an electricity local distribution
                    company under this subsection shall be used exclusively
                    for the benefit of retail ratepayers of such
                    electricity local distribution company and may not be
                    used to support electricity sales or deliveries to
                    entities or persons other than such ratepayers.
                        ``(B) Ratepayer classes.--In using emission
                    allowances distributed under this subsection for the
                    benefit of ratepayers, an electricity local
                    distribution company shall ensure that ratepayer
                    benefits are distributed--
                                ``(i) among ratepayer classes ratably based
                            on electricity deliveries to each class; and
                                ``(ii) equitably among individual
                            ratepayers within each ratepayer class,
                            including entities that receive emission
                            allowances pursuant to part F.
                        ``(C) Limitation.--In general, an electricity local
                    distribution company shall not use the value of
                    emission allowances distributed under this subsection
                    to provide to any ratepayer a rebate that is based
                    solely on the quantity of electricity delivered to such
                    ratepayer. To the extent an electricity local
                    distribution company uses the value of emission
                    allowances distributed under this subsection to provide
                    rebates, it shall, to the maximum extent practicable,
                    provide such rebates with regard to the fixed portion
                    of ratepayers' bills or as a fixed credit or rebate on
                    electricity bills.
                        ``(D) Industrial ratepayers.--Notwithstanding
                    subparagraph (C), if compliance with the requirements
                    of this title results (or would otherwise result) in an
                    increase in electricity costs for industrial retail
                    ratepayers of any given electricity local distribution
                    company (including entities that receive emission
                    allowances pursuant to part F), such electricity local
                    distribution company--
                                ``(i) shall pass through to industrial
                            retail ratepayers their ratable share (based on
                            deliveries to each ratepayer class) of the
                            value of the emission allowances distributed to
                            such company under this subsection, to reduce
                            electricity cost impacts on such ratepayers;
                            and
                                ``(ii) may do so based on the quantity of
                            electricity delivered to individual industrial
                            retail ratepayers.
                        ``(E) Guidelines.--As part of the regulations
                    promulgated under subsection (g), the Administrator
                    shall, after consultation with State regulatory
                    authorities, prescribe guidelines for the
                    implementation of the requirements of this paragraph.
                    Such guidelines shall include requirements to ensure
                    that industrial retail ratepayers (including entities
                    that receive emission allowances under part F) receive
                    their ratable share of the value of the allowances
                    distributed to each electricity local distribution
                    company pursuant to this subsection.
                ``(6) Regulatory proceedings.--
                        ``(A) Requirement.--No electricity local
                    distribution company shall be eligible to receive
                    emission allowances under this subsection or subsection
                    (e) unless the State regulatory authority with
                    authority over such company's retail rates, or the
                    entity with authority to regulate or set retail
                    electricity rates of an electricity local distribution
                    company not regulated by a State regulatory authority,
                    has--
                                ``(i) after public notice and an
                            opportunity for comment, promulgated a
                            regulation or completed a rate proceeding (or
                            the equivalent, in the case of a ratemaking
                            entity other than a State regulatory authority)
                            that provides for the full implementation of
                            the requirements of paragraph (5) of this
                            subsection and the requirements of subsection
                            (e); and
                                ``(ii) made available to the Administrator
                            and the public a report describing, in adequate
                            detail, the manner in which the requirements of
                            paragraph (5) and the requirements of
                            subsection (e) will be implemented.
                        ``(B) Updating.--The Administrator shall require,
                    as a condition of continued receipt of emission
                    allowances under this subsection by an electricity
                    local distribution company, that a new regulation be
                    promulgated or rate proceeding be completed , after
                    public notice and an opportunity for comment, and a new
                    report be made available to the Administrator and the
                    public, pursuant to subparagraph (A), not less
                    frequently than every 5 years.
                ``(7) Plans and reporting.--
                        ``(A) Regulations.--As part of the regulations
                    promulgated under subsection (g), the Administrator
                    shall prescribe requirements governing plans and
                    reports to be submitted in accordance with this
                    paragraph.
                        ``(B) Plans.--Not later than April 30 of 2011 and
                    every 5 years thereafter through 2026, each electricity
                    local distribution company shall submit to the
                    Administrator a plan, approved by the State regulatory
                    authority or other entity charged with regulating tor
                    setting the retail rates of such company, describing
                    such company's plans for the disposition of the value
                    of emission allowances to be received pursuant to this
                    subsection and subsection (e), in accordance with the
                    requirements of this subsection and subsection (e).
                    Such plan shall include a description of the manner in
                    which the company will provide to industrial retail
                    ratepayers (including entities that receive emission
                    allowances under part F) their ratable share of the
                    value of such allowances.
                        ``(C) Reports.--Not later than June 30, 2013, and
                    each calendar year thereafter through 2031, each
                    electricity local distribution company shall submit a
                    report to the Administrator, and to the relevant State
                    regulatory authority or other entity charged with
                    regulating or setting the retail electricity rates of
                    such company, describing the disposition of the value
                    of any emission allowances received by such company in
                    the prior calendar year pursuant to this subsection and
                    subsection (e), including--
                                ``(i) a description of sales, transfer,
                            exchange, or use by the company for compliance
                            with obligations under this title, of any such
                            emission allowances;
                                ``(ii) the monetary value received by the
                            company, whether in money or in some other
                            form, from the sale, transfer, or exchange of
                            any such emission allowances;
                                ``(iii) the manner in which the company's
                            disposition of any such emission allowances
                            complies with the requirements of this
                            subsection and of subsection (e), including
                            each of the requirements of paragraph (5) of
                            this subsection, including the requirement that
                            industrial retail ratepayers (including
                            entities that receive emission allowances under
                            part F) receive their ratable share of the
                            value of such allowances; and
                                ``(iv) such other information as the
                            Administrator may require pursuant to
                            subparagraph (A).
                        ``(D) Publication.--The Administrator shall make
                    available to the public all plans and reports submitted
                    under this subsection, including by publishing such
                    plans and reports on the Internet.
                ``(8) Audits.--Each year, the Administrator shall audit a
            representative sample of electricity local distribution
            companies to ensure that emission allowances distributed under
            this subsection have been used exclusively for the benefit of
            retail ratepayers and that such companies are complying with
            the requirements of this subsection and of subsection (e),
            including the requirement that industrial retail ratepayers
            (including entities that receive emission allowances under part
            F) receive their ratable share of the value of such allowances.
            In selecting companies for audit, the Administrator shall take
            into account any credible evidence of noncompliance with such
            requirements. The Administrator shall make available to the
            public a report describing the results of each such audit,
            including by publishing such report on the Internet.
                ``(9) Enforcement.--A violation of any requirement of this
            subsection or of subsection (e) shall be a violation of this
            Act. Each emission allowance the value of which is used in
            violation of the requirements of this subsection or of
            subsection (e) shall be a separate violation.
        ``(c) Merchant Coal Units.--
                ``(1) Qualifying emissions.--The qualifying emissions for a
            merchant coal unit for a given calendar year shall be the
            product of the number of megawatt hours of merchant coal unit
            sales generated by such unit in such calendar year and the
            average carbon dioxide emissions per megawatt hour generated by
            such unit during the base period under paragraph (2), provided
            that the number of megawatt hours in a given calendar year for
            purposes of such calculation shall be reduced in proportion to
            the portion of such unit's carbon dioxide emissions that are
            either--
                        ``(A) captured and sequestered in such calendar
                    year; or
                        ``(B) attributable to the combustion or
                    gasification of biomass, to the extent that the owner
                    or operator of the unit is not required to hold
                    emission allowances for such emissions.
                ``(2) Base period.--For purposes of this subsection, the
            base period for a merchant coal unit shall be--
                        ``(A) calendar years 2006 through 2008; or
                        ``(B) in the case of a new merchant coal unit--
                                ``(i) the first full calendar year of
                            operation of such unit, if such unit commences
                            operation before January 1, 2012;
                                ``(ii) calendar year 2012, if such unit
                            commences operation on or after January 1,
                            2012, and before October 1, 2012; or
                                ``(iii) calendar year 2013, if such unit
                            commences operation on or after October 1,
                            2012, and before January 1, 2013.
                ``(3) Phase-down schedule.--The Administrator shall
            identify an annual phase-down factor, applicable to
            distributions to merchant coal units for each of vintage years
            2012 through 2029, that corresponds to the overall decline in
            the amount of emission allowances allocated to the electricity
            sector in such years pursuant to section 782(a)(1). Such factor
            shall--
                        ``(A) for vintage year 2012, be equal to 1.0;
                        ``(B) for each of vintage years 2013 through 2029,
                    correspond to the quotient of--
                                ``(i) the quantity of emission allowances
                            allocated under section 782(a)(1) for such
                            vintage year; divided by
                                ``(ii) the quantity of emission allowances
                            allocated under section 782(a)(1) for vintage
                            year 2012.
                ``(4) Distribution of emission allowances.--Not later than
            March 1 of 2013 and each calendar year through 2030, the
            Administrator shall distribute emission allowances of the
            preceding vintage year to the owner or operator of each
            merchant coal unit described in subsection (a)(6)(C) in an
            amount equal to the product of--
                        ``(A) 0.5;
                        ``(B) the qualifying emissions for such merchant
                    coal unit for the preceding year, as determined under
                    paragraph (1); and
                        ``(C) the phase-down factor for the preceding
                    calendar year, as identified under paragraph (3).
                ``(5) Adjustment.--
                        ``(A) Study.--Not later than July 1, 2014, the
                    Administrator, in consultation with the Federal Energy
                    Regulatory Commission, shall complete a study to
                    determine whether the allocation formula under
                    paragraph (3) is resulting in, or is likely to result
                    in, windfall profits to merchant coal generators or
                    substantially disparate treatment of merchant coal
                    generators operating in different markets or regions.
                        ``(B) Regulation.--If the Administrator, in
                    consultation with the Federal Energy Regulatory
                    Commission, makes an affirmative finding of windfall
                    profits or disparate treatment under subparagraph (A),
                    the Administrator shall, not later than 18 months after
                    the completion of the study described in subparagraph
                    (A), promulgate regulations providing for the
                    adjustment of the allocation formula under paragraph
                    (3) to mitigate, to the extent practicable, such
                    windfall profits, if any, and such disparate treatment,
                    if any.
                ``(6) Limitation on allowances.--Notwithstanding paragraph
            (4) or (5), for each vintage year the Administrator shall
            distribute under this subsection no more than 10 percent of the
            total quantity of emission allowances available for such
            vintage year for distribution to the electricity sector under
            section 782(a)(1). If the quantity of emission allowances that
            would otherwise be distributed pursuant to paragraph (4) or (5)
            for any vintage year would exceed such limit, the Administrator
            shall distribute 10 percent of the total emission allowances
            available for distribution under section 782(a)(1) for such
            vintage year ratably among merchant coal generators based on
            the applicable formula under paragraph (4) or (5).
                ``(7) Eligibility.--The owner or operator of a merchant
            coal unit shall not be eligible to receive emission allowances
            under this subsection for any vintage year for which such owner
            or operator has elected to receive emission allowances for the
            same unit under subsection (d).
        ``(d) Long-term Contract Generators.--
                ``(1) Distribution.--Not later than March 1, 2013, and each
            calendar year through 2030, the Administrator shall distribute
            to the owner or operator of each long-term contract generator a
            quantity of emission allowances of the preceding vintage year
            that is equal to the sum of--
                        ``(A) the number of tons of carbon dioxide emitted
                    as a result of a qualifying electricity sales agreement
                    referred to in subsection (a)(5)(B)(i); and
                        ``(B) the incremental number of tons of carbon
                    dioxide emitted solely as a result of a qualifying
                    thermal sales agreement referred to in subsection
                    (a)(5)(B)(ii), provided that in no event shall the
                    Administrator distribute more than 1 emission allowance
                    for the same ton of emissions.
                ``(2) Limitation on allowances.-- Notwithstanding paragraph
            (1), for each vintage year the Administrator shall distribute
            under this subsection no more than 4.3 percent of the total
            quantity of emission allowances available for such vintage year
            for distribution to the electricity sector under section
            782(a)(1). If the quantity of emission allowances that would
            otherwise be distributed pursuant to paragraph (1) for any
            vintage year would exceed such limit, the Administrator shall
            distribute 4.3 percent of the total emission allowances
            available for distribution under section 782(a)(1) for such
            vintage year ratably among long-term contract generators based
            on paragraph (1).
                ``(3) Eligibility.--
                        ``(A) Facility eligibility.--The owner or operator
                    of a facility shall cease to be eligible to receive
                    emission allowances under this subsection upon the
                    earliest date on which the facility no longer meets
                    each and every element of the definition of a long-term
                    contract generator under subsection (a)(5).
                        ``(B) Contract eligibility.--The owner or operator
                    of a facility shall cease to be eligible to receive
                    emission allowances under this subsection based on an
                    electricity or thermal sales agreement referred to in
                    subsection (a)(5)(B) upon the earliest date that such
                    agreement--
                                ``(i) expires;
                                ``(ii) is terminated; or
                                ``(iii) is amended in any way that changes
                            the location of the facility, the price
                            (whether a fixed price or price formula) for
                            electricity or thermal energy sold under such
                            agreement, the quantity of electricity or
                            thermal energy sold under the agreement, or the
                            expiration or termination date of the
                            agreement.
                ``(4) Demonstration of eligibility.--To be eligible to
            receive allowance distributions under this subsection, the
            owner or operator of a long-term contract generator shall
            submit each of the following in writing to the Administrator
            within 180 days after the date of enactment of this title, and
            not later than September 30 of each vintage year for which such
            generator wishes to receive emission allowances:
                        ``(A) A certificate of representation described in
                    section 700(15).
                        ``(B) An identification of each owner and each
                    operator of the facility.
                        ``(C) An identification of the units at the
                    facility and the location of the facility.
                        ``(D) A written certification by the designated
                    representative that the facility meets all the
                    requirements of the definition of a long-term contract
                    generator.
                        ``(E) The expiration date of each qualifying
                    electricity or thermal sales agreement referred to in
                    subsection (a)(5)(B).
                        ``(F) A copy of each qualifying electricity or
                    thermal sales agreement referred to in subsection
                    (a)(5)(B).
                ``(5) Notification.--Not later than 30 days after, in
            accordance with paragraph (3), a facility or an agreement
            ceases to meet the eligibility requirements for distribution of
            emission allowances pursuant to this subsection, the designated
            representative of such facility shall notify the Administrator
            in writing when, and on what basis, such facility or agreement
            ceased to meet such requirements.
        ``(e) Small LDCs.--
                ``(1) Distribution.--Not later than September 30 of each
            calendar year from 2011 through 2028, the Administrator shall,
            in accordance with this subsection, distribute emission
            allowances allocated pursuant to section 782(a)(2) for the
            following vintage year. Such allowances shall be distributed
            ratably among small LDCs based on historic emissions in
            accordance with the same measure of such emissions applied to
            each such small LDC for the relevant vintage year under
            subsection (b)(2) of this section.
                ``(2) Uses.--A small LDC receiving allowances under this
            section shall use such allowances exclusively for the following
            purposes:
                        ``(A) Cost-effective programs to achieve
                    electricity savings, provided that such savings shall
                    not be transferred or used for compliance with section
                    610 of the Public Utility Regulatory Policies Act of
                    1978.
                        ``(B) Deployment of technologies to generate
                    electricity from renewable energy resources, provided
                    that any Federal renewable electricity credits issued
                    based on generation supported under this section shall
                    be submitted to the Federal Energy Regulatory
                    Commission for voluntary retirement and shall not be
                    used for compliance with section 610 of the Public
                    Utility Regulatory Policies Act of 1978.
                        ``(C) Assistance programs to reduce electricity
                    costs for low-income residential ratepayers of such
                    small LDC, provided that such assistance is made
                    available equitably to all residential ratepayers below
                    a certain income level, which shall not be higher than
                    200 percent of the poverty line (as that term is
                    defined in section 673(2) of the Community Services
                    Block Grant Act (42 U.S.C. 9902(2)).
                ``(3) Requirements.--As part of the regulations promulgated
            under subsection (g), the Administrator shall prescribe--
                        ``(A) after consultation with the Federal Energy
                    Regulatory Commission, requirements to ensure that
                    programs and projects under paragraph (2)(A) and (B)
                    are consistent with the standards established by, and
                    effectively supplement electricity savings and
                    generation of electricity from renewable energy
                    resources achieved by, the Combined Efficiency and
                    Renewable Electricity Standard established under
                    section 610 of the Public Utility Regulatory Policies
                    Act of 1978;
                        ``(B) eligibility criteria and guidelines for
                    consumer assistance programs for low-income residential
                    ratepayers under paragraph (2)(C); and
                        ``(C) such other requirements as the Administrator
                    determines appropriate to ensure compliance with the
                    requirements of this subsection.
                ``(4) Reporting.--Reports submitted under subsection (b)(7)
            shall include, in accordance with such requirements as the
            Administrator may prescribe--
                        ``(A) a description of any facilities deployed
                    under paragraph (2)(A), the quantity of resulting
                    electricity generation from renewable energy resources;
                        ``(B) an assessment demonstrating the cost-
                    effectiveness of, and electricity savings achieved by,
                    programs supported under paragraph (2)(B); and
                        ``(C) a description of assistance provided to low-
                    income retail ratepayers under paragraph (2)(C).
        ``(f) Certain Cogeneration Facilities.--
                ``(1) Eligible cogeneration facilities.--For purposes of
            this subsection, an `eligible cogeneration facility' is a
            facility that--
                        ``(A) is a qualifying co-generation facility (as
                    that term is defined in section 3(18)(B) of the Federal
                    Power Act (16 U.S.C. 796(18)(B));
                        ``(B) derives 80 percent or more of its heat input
                    from coal, petroleum coke, or any combination of these
                    2 fuels;
                        ``(C) has a nameplate capacity of 100 megawatts or
                    greater;
                        ``(D) was in operation as of January 1, 2009, and
                    remains in operation as of the date of any distribution
                    of emission allowances under this subsection;
                        ``(E) in calendar years 2006 through 2008 sold, and
                    as of the date of any distribution of emission
                    allowances under this section sells, steam or
                    electricity directly and solely to multiple,
                    separately-owned industrial or commercial facilities
                    co-located at the same site with the cogeneration
                    facility; and
                        ``(F) is not eligible to receive allowances under
                    any other subsection of this section or under part F of
                    this title.
                ``(2) Distribution.--The Administrator shall distribute the
            emission allowances allocated pursuant to section 782(a)(3) to
            owners or operators of eligible cogeneration facilities ratably
            based on the carbon dioxide emissions of each such facility in
            calendar years 2006 through 2008. The Administrator--
                        ``(A) shall not, in any year, distribute emission
                    allowances under this subsection to the owner or
                    operator of any eligible cogeneration facility in
                    excess of the amount necessary to offset such
                    facility's cost of compliance with the requirements of
                    this title in that year; and
                        ``(B) may distribute such allowances over a period
                    of years if annual distributions under this subsection
                    would otherwise exceed the limitation in subparagraph
                    (A), provided that in no event shall distributions be
                    made under this subsection after calendar year 2025.
                ``(3) Requirements.--The Administrator shall, by
            regulation, establish requirements to ensure that the value of
            any emission allowances distributed pursuant to this subsection
            are passed through, on an equitable basis, to the facilities to
            which the relevant cogeneration facility provides electricity
            or steam deliveries, including any facility owned or operated
            by the owner or operator of the cogeneration facility.
        ``(g) Regulations.--Not later than 2 years after the date of
    enactment of this title, the Administrator, in consultation with the
    Federal Energy Regulatory Commission, shall promulgate regulations to
    implement the requirements of this section.

    ``SEC. 784. NATURAL GAS CONSUMERS.

        ``(a) Definitions.--For purposes of this section:
                ``(1) Cost-effective.--The term `cost-effective', with
            respect to an energy efficiency program, means that the program
            meets the Total Resource Cost Test, which requires that the net
            present value of economic benefits over the life of the
            program, including avoided supply and delivery costs and
            deferred or avoided investments, is greater than the net
            present value of the economic costs over the life of the
            program, including program costs and incremental costs borne by
            the energy consumer.
                ``(2) Natural gas local distribution company.--The term
            `natural gas local distribution company' means a natural gas
            local distribution company that is a covered entity.
                ``(3) Non-covered entity.--The term `non-covered entity'
            means, when used in reference to a date or period prior to the
            enactment of this title, an entity that would not have been a
            covered entity if this title had been in effect during such
            date or period.
                ``(4) State regulatory authority.--The term `State
            regulatory authority' has the meaning given the term `State
            commission' in section 2(8) of the Natural Gas Act (15 U.S.C.
            717a(8)).
        ``(b) Distribution.--Not later than June 30 of 2015 and each
    calendar year thereafter through 2028, the Administrator shall
    distribute to natural gas local distribution companies for the benefit
    of retail ratepayers the quantity of emission allowances allocated for
    the following vintage year pursuant to section 782(b). Such allowances
    shall be distributed among local natural gas distribution companies
    based on the following formula:
                ``(1) Initial formula.--Except as provided in paragraph
            (2), for each vintage year, the Administrator shall distribute
            emission allowances among natural gas local distribution
            companies ratably based on each such company's annual average
            retail natural gas deliveries for 2006 through 2008 to
            customers that were non-covered entities, unless the owner or
            operator of the company selects 3 other consecutive years
            between 1999 and 2008, inclusive, and timely notifies the
            Administrator of its selection.
                ``(2) Updating.--Prior to distributing 2019 vintage year
            emission allowances and at 3-year intervals thereafter, the
            Administrator shall update the distribution formula under this
            subsection to reflect changes in each natural gas local
            distribution company's service territory since the most recent
            formula was established. For each successive 3-year period, the
            Administrator shall distribute allowances ratably among natural
            gas local distribution companies based on the product of--
                        ``(A) each natural gas local distribution company's
                    average annual natural gas deliveries per customer to
                    customers that were non-covered entities during
                    calendar years 2006 through 2008, or during the 3
                    alternative consecutive years selected by such company
                    under paragraph (1); and
                        ``(B) the number of customers of such natural gas
                    local distribution company that are not covered
                    entities in the most recent year in which the formula
                    is updated under this paragraph.
        ``(c) Use of Allowances.--
                ``(1) Ratepayer benefit.--Emission allowances distributed
            to a natural gas local distribution company under this section
            shall be used exclusively for the benefit of retail ratepayers
            of such natural gas local distribution company other than
            covered entities and may not be used to support natural gas
            sales or deliveries to entities or persons other than such
            ratepayers.
                ``(2) Ratepayer classes.--In using emission allowances
            distributed under this section for the benefit of ratepayers, a
            natural gas local distribution company shall ensure that
            ratepayer benefits are distributed--
                        ``(A) among ratepayer classes ratably based on
                    natural gas deliveries to each class, excluding
                    deliveries to covered entities; and
                        ``(B) equitably among individual ratepayers other
                    than covered entities within each ratepayer class.
                ``(3) Limitation.--In general, a natural gas local
            distribution company shall not use the value of emission
            allowances distributed under this section to provide to any
            ratepayer a rebate that is based solely on the quantity of
            natural gas delivered to such ratepayer. To the extent a
            natural gas local distribution company uses the value of
            emission allowances distributed under this section to provide
            rebates, it shall, to the maximum extent practicable, provide
            such rebates with regard to the fixed portion of ratepayers'
            bills or as a fixed creditor rebate on natural gas bills.
                ``(4) Industrial ratepayers.--Notwithstanding paragraph
            (3), if compliance with the requirements of this title results
            (or would otherwise result) in an increase in natural gas costs
            for industrial retail ratepayers of any given natural gas local
            distribution company that are not covered entities (including
            entities that receive emission allowances pursuant to part F),
            such natural gas local distribution company--
                        ``(A) shall pass through to industrial retail
                    ratepayers that are not covered entities their ratable
                    share (based on deliveries to each ratepayer class) of
                    the value of the emission allowances distributed to
                    such company under this subsection, to reduce natural
                    gas cost impacts on such ratepayers; and
                        ``(B) may do so based on the quantity of natural
                    gas delivered to individual industrial retail
                    ratepayers.
                ``(5) Energy efficiency programs.--The value of no less
            than one third of the emission allowances distributed to
            natural gas local distribution companies pursuant to this
            section in any calendar year shall be used for cost-effective
            energy efficiency programs for natural gas consumers. Such
            programs must be authorized and overseen by the State
            regulatory authority, or by the entity with authority to
            regulate or set retail natural gas rates in the case of a
            natural gas local distribution company that is not regulated by
            a State regulatory authority.
                ``(6) Certain intracompany deliveries.--If a natural gas
            local distribution company makes an intracompany delivery of
            natural gas to a customer that is not a covered entity, for
            which such company is required to hold emission allowances
            under section 722, such customer shall, for purposes of this
            section, be considered a retail ratepayer and a member of a
            ratepayer class to be determined by the relevant State
            regulatory authority, or other entity with authority to
            regulate or set natural gas rates in the case of a company not
            regulated by a State regulatory authority.
                ``(7) Guidelines.--As part of the regulations promulgated
            under subsection (h), the Administrator shall, after
            consultation with State regulatory authorities, prescribe
            guidelines for the implementation of the requirements of this
            subsection. Such guidelines shall include requirements to
            ensure that industrial retail ratepayers that are not covered
            entities (including entities that receive emission allowances
            under part F) receive their ratable share of the value of the
            allowances distributed to each natural gas local distribution
            company pursuant to this section.
        ``(d) Regulatory Proceedings.--
                ``(1) Requirement.--No natural gas local distribution
            company shall be eligible to receive emission allowances under
            this section unless the State regulatory authority with
            authority over the retail rates of such company, or the entity
            with authority to regulate or set retail rates of a natural gas
            local distribution company not regulated by a State regulatory
            authority, has--
                        ``(A) after public notice and an opportunity for
                    comment, promulgated a regulation or completed a public
                    rate proceeding (or the equivalent, in the case of a
                    ratemaking entity other than a State regulatory
                    authority) that provides for the full implementation of
                    the requirements of subsection (c); and
                        ``(B) made available to the Administrator and the
                    public a report describing, in adequate detail, the
                    manner in which the requirements of subsection (c) will
                    be implemented.
                ``(2) Updating.--The Administrator shall require, as a
            condition of continued receipt of emission allowances under
            this section, that a new regulation be promulgated or rate
            proceeding be completed, after public notice and an opportunity
            for comment, and a new report be made available to the
            Administrator and the public, pursuant to paragraph (1), not
            less frequently than every 5 years.
        ``(e) Plans and Reporting.--
                ``(1) Regulations.--As part of the regulations promulgated
            under subsection (h), the Administrator shall prescribe
            requirements governing plans and reports to be submitted in
            accordance with this subsection.
                ``(2) Plans.--Not later than April 30, 2015, and every 5
            years thereafter through 2025, each natural gas local
            distribution company shall submit to the Administrator a plan,
            approved by the State regulatory authority or other entity
            charged with regulating or setting the retail rates of such
            company, describing such company's plans for the disposition of
            the value of emission allowances to be received pursuant to
            this section, in accordance with the requirements of this
            section.
                ``(3) Reports.--Not later than June 30, 2017, and each
            calendar year thereafter through 2031, each natural gas local
            distribution company shall submit a report to the
            Administrator, approved by the relevant State regulatory
            authority or other entity charged with regulating or setting
            the retail natural gas rates of such company, describing the
            disposition of the value of any emission allowances received by
            such company in the prior calendar year pursuant to this
            section, including--
                        ``(A) a description of sales, transfer, exchange,
                    or use by the company for compliance with obligations
                    under this title, of any such emission allowances;
                        ``(B) the monetary value received by the company,
                    whether in money or in some other form, from the sale,
                    transfer, or exchange of emission allowances received
                    by the company under this section;
                        ``(C) the manner in which the company's disposition
                    of emission allowances received under this section
                    complies with the requirements of this section,
                    including each of the requirements of subsection (c);
                        ``(D) the cost-effectiveness of, and energy savings
                    achieved by, energy efficiency programs supported
                    through such emission allowances; and
                        ``(E) such other information as the Administrator
                    may require pursuant to paragraph (1).
                ``(4) Publication.--The Administrator shall make available
            to the public all plans and reports submitted by natural gas
            local distribution companies under this subsection, including
            by publishing such plans and reports on the Internet.
        ``(f) Audits.--Each year, the Administrator shall audit a
    representative sample of natural gas local distribution companies to
    ensure that emission allowances distributed under this section have
    been used exclusively for the benefit of retail ratepayers and that
    such companies are complying with the requirements of this section. In
    selecting companies for audit, the Administrator shall take into
    account any credible evidence of noncompliance with such requirements.
    The Administrator shall make available to the public a report
    describing the results of each such audit, including by publishing such
    report on the Internet.
        ``(g) Enforcement.--A violation of any requirement of this section
    shall be a violation of this Act. Each emission allowance the value of
    which is used in violation of the requirements of this section shall be
    a separate violation.
        ``(h) Regulations.--Not later than January 1, 2014, the
    Administrator, in consultation with the Federal Energy Regulatory
    Commission, shall promulgate regulations to implement the requirements
    of this section.

    ``SEC. 785. HOME HEATING OIL, PROPANE, AND KEROSENE CONSUMERS.

        ``(a) Definitions.--For purposes of this section:
                ``(1) Carbon content.--The term `carbon content' means the
            amount of carbon dioxide that would be emitted as a result of
            the combustion of a fuel.
                ``(2) Cost-effective.--The term `cost-effective' has the
            meaning given that term in section 784(a)(1).
                ``(3) Oilheat fuel.--The term `oilheat fuel' means fuel
            that--
                        ``(A) is--
                                ``(i) No. 1 distillate;
                                ``(ii) No. 2 dyed distillate;
                                ``(iii) a liquid blended with No. 1
                            distillate or No. 2 dyed distillate; or
                                ``(iv) a biobased liquid; and
                        ``(B) is used as a fuel for nonindustrial
                    commercial or residential space or hot water heating.
        ``(b) Distribution Among States.--Not later than September 30 of
    each of calendar years 2011 through 2028, the Administrator shall
    distribute among the States, in accordance with this section, the
    quantity of emission allowances allocated for the following vintage
    year pursuant to section 782(c). The Administrator shall distribute
    emission allowances among the States under this section each year
    ratably based on the ratio of--
                ``(1) the carbon content of oilheat fuel, propane, and
            kerosene sold to consumers within each State in the preceding
            year for residential or commercial uses; to
                ``(2) the carbon content of oilheat fuel, propane, and
            kerosene sold to consumers within the United States in the
            preceding year for residential or commercial uses.
        ``(c) Use of Allowances.--
                ``(1) In general.--States shall use emission allowances
            distributed under this section exclusively for the benefit of
            consumers of oilheat fuel, propane, or kerosene for residential
            or commercial purposes. Such proceeds shall be used exclusively
            for--
                        ``(A) cost-effective energy efficiency programs for
                    consumers that use oilheat fuel, propane, or kerosene
                    for residential or commercial purposes; or
                        ``(B) rebates or other direct financial assistance
                    programs for consumers of oilheat fuel, propane, or
                    kerosene used for residential or commercial purposes.
                ``(2) Administration and delivery mechanisms.--In
            administering programs supported by this section, States
            shall--
                        ``(A) use no less than 50 percent of the value of
                    emission allowances received under this section for
                    cost-effective energy efficiency programs to reduce
                    consumers' overall fuel costs;
                        ``(B) to the extent practicable, deliver consumer
                    support under this section through existing energy
                    efficiency and consumer energy assistance programs or
                    delivery mechanisms, including, where appropriate,
                    programs or mechanisms administered by parties other
                    than the State; and
                        ``(C) seek to coordinate the administration and
                    delivery of energy efficiency and consumer energy
                    assistance programs supported under this section, with
                    one another and with existing programs for various fuel
                    types, so as to deliver comprehensive, fuel-blind,
                    coordinated programs to consumers.
        ``(d) Reporting.--Each State receiving emission allowances under
    this section shall submit to the Administrator, within 12 months of
    each receipt of such allowances, a report, in accordance with such
    requirements as the Administrator may prescribe, that--
                ``(1) describes the State's use of emission allowances
            distributed under this section, including a description of the
            energy efficiency and consumer assistance programs supported
            with such allowances;
                ``(2) demonstrates the cost-effectiveness of, and the
            energy savings and greenhouse gas emissions reductions achieved
            by, energy efficiency programs supported under this section;
            and
                ``(3) includes a report prepared by an independent third
            party, in accordance with such regulations as the Administrator
            may promulgate, evaluating the performance of the energy
            efficiency and consumer assistance programs supported under
            this section.
        ``(e) Enforcement.--If the Administrator determines that a State is
    not in compliance with this section, the Administrator may withhold a
    portion of the emission allowances, the quantity of which is equal to
    up to twice the quantity of the allowances that the State failed to use
    in accordance with the requirements of this section, that such State
    would otherwise be eligible to receive under this section in later
    years. Allowances withheld pursuant to this subsection shall be
    distributed among the remaining States ratably in accordance with the
    formula in subsection (b).

    ``SEC. 787. ALLOCATIONS TO REFINERIES.

        ``(a) Purpose.--The purpose of this section is to provide emission
    allowance rebates to petroleum refineries in the United States in a
    manner that promotes energy efficiency and a reduction in greenhouse
    gas emissions at such facilities.
        ``(b) Definitions.--In this section:
                ``(1) Emissions.--The term `emissions' includes direct
            emissions from fuel combustion, process emissions, and indirect
            emissions from the generation of electricity, steam, and
            hydrogen used to produce the output of a petroleum refinery or
            the petroleum refinery sector.
                ``(2) Petroleum refinery.--The term `petroleum refinery'
            means a facility classified under code 324110 of the North
            American Industrial Classification System of 2002.
                ``(3) Small business refiner.--The term `small business
            refiner' means a refiner that meets the applicable Federal
            refinery capacity and employee limitations criteria described
            in section 45H(c)(1) of the Internal Revenue Code of 1986 (as
            in effect on the date of enactment of this section and without
            regard to section 45H(d)). Eligibility of a small business
            refiner under this paragraph shall not be recalculated or
            disallowed on account of (i) its merger with another small
            business refiner or refiners after December 31, 2002 or (ii)
            its acquisition of another small business refiner (or refinery
            of such refiner) after December 31, 2002.
        ``(c) In General.--For each vintage year between 2014 and 2026, the
    Administrator shall distribute allowances pursuant to this section to
    owners and operators of petroleum refineries, including small business
    refiners, in the United States.
        ``(d) Distribution Schedule.--The Administrator shall distribute
    emission allowances pursuant to the regulations issued under subsection
    (e) for each vintage year no later than October 31 of the preceding
    calendar year.
        ``(e) Regulations.--Not later than 3 years after the date of
    enactment of this title, the Administrator, in consultation with the
    Administrator of the Energy Information Administration, shall
    promulgate regulations that establish a formula for distributing
    emission allowances consistent with the purpose of this section. In
    establishing such formula, the Administrator shall consider the
    relative complexity of refinery processes and appropriate mechanisms to
    take energy efficiency and greenhouse gas reductions into account. If a
    petroleum refinery's electricity provider received a free allocation of
    emission allowances pursuant to section 782(a), the Administrator shall
    take this free allocation into account when establishing such formula
    to avoid rebates to a petroleum refinery for costs that the
    Administrator determines were not incurred by the petroleum refinery
    because the allowances were freely allocated to the petroleum
    refinery's electricity provider and used for the benefit of the
    petroleum refinery. This formula shall apply separately to the
    distribution of allowances allocated pursuant to section 782(j)(1) and
    to those allocated under section 782(j)(2).

    ``SEC. 788. SUPPLEMENTAL AGRICULTURE AND RENEWABLE ENERGY INCENTIVES
                  PROGRAMS.

        ``(a) In General.--Emission allowances allocated pursuant to
    section 782(u) shall be distributed by the Administrator at the
    direction of the Secretary of Energy and the Secretary of Agriculture
    in accordance with this section. Not less than 50 percent of the
    allowances shall be available for the program established pursuant to
    subsection (b).
        ``(b) Agriculture Incentives Program.--
                ``(1) Establishment.--The Secretary of Agriculture shall
            establish by rule a program to provide incentives in the form
            of emission allowances for activities undertaken in the
            agriculture sector that reduce greenhouse gas emissions or
            sequester carbon. Under this program, the Secretary of
            Agriculture shall provide incentives for projects and
            activities that--
                        ``(A) reduce or avoid greenhouse gas emissions, or
                    sequester greenhouse gases, but do not meet the
                    criteria for offset credits established under the
                    American Clean Energy and Security Act of 2009;
                        ``(B) support actions to adapt to climate change;
                    or
                        ``(C) prevent conversion of land that would
                    increase greenhouse gas emissions (including projects
                    and activities that complement or supplement
                    conservation programs administered by the Secretary).
                ``(2) Considerations.--In designing this program, the
            Secretary shall ensure that it provides support for--
                        ``(A) development and demonstration of practices to
                    reduce greenhouse gas emissions or sequester carbon in
                    agricultural operations where there are limited
                    recognized opportunities to achieve such emissions
                    reductions or sequestration; and
                        ``(B) projects that reduce greenhouse gas emissions
                    or increase sequestration of greenhouse gases and also
                    achieve other significant environmental benefits, such
                    as the improvement of water or air quality.
                ``(3) Research.--The Secretary shall establish by rule a
            program to conduct research to develop additional projects and
            activities for crops to find additional techniques and methods
            to reduce greenhouse gas emissions or sequester greenhouse
            gases that may or may not meet the criteria for offset credits
            established under the American Clean Energy and Security Act of
            2009.
                ``(4) Use of information.--Information and data generated
            by this program should, where relevant, be used to inform the
            development of additional offset practices and methodologies.
        ``(c) Renewable Energy Incentives Program.--The Secretary of Energy
    and the Administrator shall establish by rule a program to provide
    allowances to State and local governments to support the deployment of
    renewable energy infrastructure.

    ``SEC. 789. CLIMATE CHANGE CONSUMER REFUNDS.

        ``(a) Refund.--In each year after deposits are made to the Climate
    Change Consumer Refund Account, the Secretary of the Treasury shall
    provide tax refunds on a per capita basis to each household in the
    United States that shall collectively equal the amount deposited into
    the Climate Change Consumer Refund Account.
        ``(b) Limitations.--The Secretary of the Treasury shall establish
    procedures to ensure that individuals who are not--
                ``(1) citizens or nationals of the United States; or
                ``(2) immigrants lawfully residing in the United States,
    are excluded for the purpose of calculating and distributing refunds
    under this section.

    ``SEC. 790. EXCHANGE FOR STATE-ISSUED ALLOWANCES.

        ``(a) In General.--Not later than 1 year after the date of
    enactment of this title, the Administrator shall issue regulations
    allowing any person in the United States to exchange greenhouse gas
    emission allowances issued before December 31, 2011, by the State of
    California or for the Regional Greenhouse Gas Initiative, or the
    Western Climate Initiative (in this section referred to as `State
    allowances') for emission allowances established by the Administrator
    under section 721(a).
        ``(b) Regulations.--Regulations issued under subsection (a) shall--
                ``(1) provide that a person exchanging State allowances
            under this section receive emission allowances established
            under section 721(a) in the amount that is sufficient to
            compensate for the cost of obtaining and holding such State
            allowances;
                ``(2) establish a deadline by which persons must exchange
            the State allowances;
                ``(3) provide that the Federal emission allowances
            disbursed pursuant to this section shall be deducted from the
            allowances to be auctioned pursuant to section 782(d); and
                ``(4) require that, once exchanged, the credit or other
            instrument be retired for purposes of use under the program by
            or for which it was originally issued.
        ``(c) Cost of Obtaining State Allowance.--For purposes of this
    section, the cost of obtaining a State allowance shall be the average
    auction price, for emission allowances issued in the year in which the
    State allowance was issued, under the program under which the State
    allowance was issued.

    ``SEC. 791. AUCTION PROCEDURES.

        ``(a) In General.--To the extent that auctions of emission
    allowances by the Administrator are authorized by this part, such
    auctions shall be carried out pursuant to this section and the
    regulations established hereunder.
        ``(b) Initial Regulations.--Not later than 12 months after the date
    of enactment of this title, the Administrator, in consultation with
    other agencies, as appropriate, shall promulgate regulations governing
    the auction of allowances under this section. Such regulations shall
    include the following requirements:
                ``(1) Frequency; first auction.--Auctions shall be held
            four times per year at regular intervals, with the first
            auction to be held no later than March 31, 2011.
                ``(2) Auction schedule; current and future vintages.--The
            Administrator shall, at each quarterly auction under this
            section, offer for sale both a portion of the allowances with
            the same vintage year as the year in which the auction is being
            conducted and a portion of the allowances with vintage years
            from future years. The preceding sentence shall not apply to
            auctions held before 2012, during which period, by necessity,
            the Administrator shall auction only allowances with a vintage
            year that is later than the year in which the auction is held.
            Beginning with the first auction and at each quarterly auction
            held thereafter, the Administrator may offer for sale
            allowances with vintage years of up to 4 years after the year
            in which the auction is being conducted, except as provided in
            section 782(p).
                ``(3) Auction format.--Auctions shall follow a single-
            round, sealed-bid, uniform price format.
                ``(4) Participation; financial assurance.--Auctions shall
            be open to any person, except that the Administrator may
            establish financial assurance requirements to ensure that
            auction participants can and will perform on their bids.
                ``(5) Disclosure of beneficial ownership.--Each bidder in
            the auction shall be required to disclose the person or entity
            sponsoring or benefitting from the bidder's participation in
            the auction if such person or entity is, in whole or in part,
            other than the bidder.
                ``(6) Purchase limits.--No person may, directly or in
            concert with another participant, purchase more than 5 percent
            of the allowances offered for sale at any quarterly auction.
                ``(7) Publication of information.--After the auction, the
            Administrator shall, in a timely fashion, publish the
            identities of winning bidders, the quantity of allowances
            obtained by each winning bidder, and the auction clearing
            price.
                ``(8) Other requirements.--The Administrator may include in
            the regulations such other requirements or provisions as the
            Administrator, in consultation with other agencies, as
            appropriate, considers appropriate to promote effective,
            efficient, transparent, and fair administration of auctions
            under this section.
        ``(c) Revision of Regulations.--The Administrator may, in
    consultation with other agencies, as appropriate, at any time, revise
    the initial regulations promulgated under subsection (b) by
    promulgating new regulations. Such revised regulations need not meet
    the requirements identified in subsection (b) if the Administrator
    determines that an alternative auction design would be more effective,
    taking into account factors including costs of administration,
    transparency, fairness, and risks of collusion or manipulation. In
    determining whether and how to revise the initial regulations under
    this subsection, the Administrator shall not consider maximization of
    revenues to the Federal Government.
        ``(d) Reserve Auction Price.--The minimum reserve auction price
    shall be $10 (in constant 2009 dollars) for auctions occurring in 2012.
    The minimum reserve price for auctions occurring in years after 2012
    shall be the minimum reserve auction price for the previous year
    increased by 5 percent plus the rate of inflation (as measured by the
    Consumer Price Index for all urban consumers).
        ``(e) Delegation or Contract.--Pursuant to regulations under this
    section, the Administrator may by delegation or contract provide for
    the conduct of auctions under the Administrator's supervision by other
    departments or agencies of the Federal Government or by nongovernmental
    agencies, groups, or organizations.
        ``(f) Small Business Refiner Reserve.--The Administrator shall, in
    accordance with this subsection, issue regulations setting aside a
    specified number of allowances that small business refiners may
    purchase at the average auction price and may use to demonstrate
    compliance pursuant to section 722. These regulations shall provide the
    following:
                ``(1) Amount.--The Administrator shall place in the small
            business refiner reserve account allowances that are to be sold
            at auction pursuant to the allocations in section 782 in an
            amount equal to--
                        ``(A) 6.2 percent of the emission allowances
                    established under section 721(a) for each vintage year
                    from 2012 through 2013;
                        ``(B) 5.4 percent of the emission allowances
                    established under section 721(a) for each vintage year
                    from 2014 through 2015; and
                        ``(C) 4.9 percent of the emission allowances
                    established under section 721(a) for each vintage year
                    from 2016 through 2024.
                ``(2) Allowed purchases.--From January 1 of the calendar
            year that matches the vintage year for which allowances have
            been placed in the reserve, through January 14 of the following
            year, small business refiners (as defined in section 787(b))
            may purchase allowances from this reserve at the price
            determined pursuant to paragraph (3).
                ``(3) Price.--The price for allowances purchased from this
            reserve shall be the average auction price for allowances of
            the same vintage year purchased at auctions conducted pursuant
            to this section during the 12 months preceding the purchase of
            the allowances.
                ``(4) Use of allowances.--Allowances purchased from this
            reserve shall only be used by the purchaser to demonstrate
            compliance pursuant to section 722 for attributable greenhouse
            gas emissions in the calendar year that matches the vintage
            year of the purchased allowance. Allowances purchased from this
            reserve may not be banked, traded or borrowed.
                ``(5) Limitations on purchase amount.--The Administrator,
            by regulation adopted after public notice and an opportunity
            for comment, shall establish procedures to distribute the
            ability to purchase allowances from the reserve fairly among
            all small business refiners interested in purchasing allowances
            from this reserve so as to address the potential that requests
            to purchase allowances exceed the number of allowances
            available in the reserve. This regulation may place limits on
            the number of allowances a small business refiner may purchase
            from the reserve.
                ``(6) Unsold allowances.--Vintage year allowances not sold
            from the reserve on or before January 15 of the calendar year
            following the vintage year shall be sold at an auction
            conducted pursuant to this section no later than March 31 of
            the calendar year following the vintage year. If significantly
            more allowances are being placed in the reserve than are being
            purchased from the reserve several years in a row, the
            Administrator may adjust either the percent of allowances
            placed in the reserve or the date by which allowances may be
            purchased from the reserve.

    ``SEC. 792. AUCTIONING ALLOWANCES FOR OTHER ENTITIES.

        ``(a) Consignment.--Any entity holding emission allowances or
    compensatory allowances may request that the Administrator auction,
    pursuant to section 791, the allowances on consignment.
        ``(b) Pricing.--When the Administrator acts under this section as
    the agent of an entity in possession of emission allowances or
    compensatory allowances, the Administrator is not obligated to obtain
    the highest price possible for the allowances, and instead shall
    auction consignment allowances in the same manner and pursuant to the
    same rules as auctions of other allowances under section 791. The
    Administrator may permit the entity offering the allowance for sale to
    condition the sale of its allowances pursuant to this section on a
    minimum reserve price that is different than the reserve auction price
    set pursuant to section 791(d).
        ``(c) Proceeds.--For emission allowances and compensatory
    allowances auctioned pursuant to this section, notwithstanding section
    3302 of title 31, United States Code, or any other provision of law,
    within 90 days of receipt, the United States shall transfer the
    proceeds from the auction to the entity which held the allowances
    auctioned. No funds transferred from a purchaser to a seller of
    emission allowances or compensatory allowances under this subsection
    shall be held by any officer or employee of the United States or
    treated for any purpose as public monies.
        ``(d) Unsold Allowances.--Allowances offered for sale under this
    section that are not sold shall be returned to the entity in possession
    of the allowance, notwithstanding section 726(b)(2)(A).
        ``(e) Regulations.--The Administrator shall issue regulations
    within 24 months after the date of enactment of this title to implement
    this section.

    ``SEC. 793. ESTABLISHMENT OF FUNDS.

        ``There is hereby established in the Treasury of the United States
    the following separate accounts:
                ``(1) The Strategic Reserve Fund.
                ``(2) The Climate Change Consumer Refund Account.
                ``(3) The Climate Change Worker Adjustment Assistance Fund.

    ``SEC. 794. OVERSIGHT OF ALLOCATIONS.

        ``(a) In General.--Not later than January 1, 2014, and every 2
    years thereafter, the Comptroller General of the United States shall
    carry out and report to Congress on the results of a review of programs
    administered by the Federal Government that distribute emission
    allowances or funds from any Federal auction of allowances.
        ``(b) Contents.--Each such report shall include a comprehensive
    evaluation of the administration and effectiveness of each program,
    including--
                ``(1) the efficiency, transparency, and soundness of the
            administration of each program;
                ``(2) the performance of activities receiving assistance
            under each program;
                ``(3) the cost-effectiveness of each program in achieving
            the stated purposes of the program; and
                ``(4) recommendations, if any, for legislative, regulatory,
            or administrative changes to each program to improve its
            effectiveness.
        ``(c) Focus.--In evaluating program performance, each review under
    this section review shall address the effectiveness of such programs
    in--
                ``(1) creating and preserving jobs;
                ``(2) ensuring a manageable transition for working families
            and workers;
                ``(3) reducing the emissions, or enhancing sequestration,
            of greenhouse gases;
                ``(4) developing clean technologies; and
                ``(5) building resilience to the impacts of climate change.

    ``SEC. 795. EXCHANGE FOR EARLY ACTION OFFSET CREDITS.

        ``(a) In General.--Emission allowances allocated pursuant to
    section 782(t) shall be distributed by the Administrator in accordance
    with this section. Not later than 1 year after the date of enactment of
    this title, the Administrator shall issue regulations allowing--
                ``(1) any person in the United States to exchange
            instruments in the nature of offset credits issued before
            January 1, 2009, by a State or voluntary offset program with
            respect to which the Administrator has made an affirmative
            determination under section 740(a)(2), for emissions allowances
            established by the Administrator under section 721(a); and
                ``(2) the Administrator to provide compensation in the form
            of emission allowances to entities that do not meet the
            criteria of paragraph (1) and meet the criteria of this
            paragraph for documented early reductions or avoidance of
            greenhouse gas emissions or greenhouse gases sequestered before
            January 1, 2009, from projects begun before January 1, 2009,
            where--
                        ``(A) the entity publicly stated greenhouse gas
                    reduction goals and publicly reported against those
                    goals;
                        ``(B) the entity demonstrated entity-wide net
                    greenhouse gas reductions; and
                        ``(C) the entity demonstrates the actual projects
                    undertaken to make reductions and documents the
                    reductions (e.g., through documentation of engineering
                    projects).
        ``(b) Regulations.--Regulations issued under subsection (a) shall--
                ``(1) provide that a person exchanging credits under
            subsection (a)(1) receive emission allowances established under
            section 721(a) in an amount for which the monetary value is
            equivalent to the average monetary value of the credits during
            the period from January 1, 2006, to January 1, 2009, as
            adjusted for inflation to reflect current dollar values at the
            time of the exchange;
                ``(2) provide that a person receiving compensation for
            documented early action under subsection (a)(2) shall receive
            emission allowances established under section 721(a) in an
            amount that is approximately equivalent in value to the carbon
            dioxide equivalent per ton value received by entities in
            exchange for credits under paragraph (1) (as adjusted for
            inflation to reflect current dollar values at the time of the
            exchange), as determined by the Administrator;
                ``(3) provide that only reductions or avoidance of
            greenhouse gas emissions, or sequestration of greenhouse gases,
            achieved by activities in the United States between January 1,
            2001, and January 1, 2009, may be compensated under this
            section, and only credits issued for such activities may be
            exchanged under this section;
                ``(4) provide that only credits that have not been retired
            or otherwise used to meet a voluntary or mandatory commitment,
            and have not expired, may be exchanged under subsection (a)(1);
                ``(5) require that, once exchanged, the credit be retired
            for purposes of use under the program by or for which it was
            originally issued; and
                ``(6) establish a deadline by which persons must exchange
            the credits or request compensation for early action under this
            section.
        ``(c) Participation.--Participation in an exchange of credits for
    allowances or compensation for early action authorized by this section
    shall not preclude any person from participation in an offset credit
    program established under the American Clean Energy and Security Act of
    2009.
        ``(d) Distribution.--Of the emission allowances distributed under
    this section, a quantity equal to 0.75 percent of vintage year 2012
    emission allowances established under section 721(a) shall be
    distributed pursuant to subsection (a)(1), and a quantity equal to 0.25
    percent of vintage year 2012 emission allowances established under
    section 721(a) shall be distributed pursuant to subsection (a)(2).''.

                Subtitle C--Additional Greenhouse Gas Standards

    SEC. 331. GREENHOUSE GAS STANDARDS.

        The Clean Air Act (42 U.S.C. 7401 and following), as amended by
    subtitles A and B of this title, is further amended by adding the
    following new title after title VII:

               ``TITLE VIII--ADDITIONAL GREENHOUSE GAS STANDARDS

    ``SEC. 801. DEFINITIONS.

        ``For purposes of this title, terms that are defined in title VII,
    except for the term `stationary source', shall have the meaning given
    those terms in title VII.

                     ``PART A--STATIONARY SOURCE STANDARDS

    ``SEC. 811. STANDARDS OF PERFORMANCE.

        ``(a) Uncapped Stationary Sources.--
                ``(1) Inventory of source categories.--(A) Within 12 months
            after the date of enactment of this title, the Administrator
            shall publish under section 111(b)(1)(A) an inventory of
            categories of stationary sources that consist of those
            categories that contain sources that individually had uncapped
            greenhouse gas emissions greater than 10,000 tons of carbon
            dioxide equivalent and that, in the aggregate, were responsible
            for emitting at least 20 percent annually of the uncapped
            greenhouse gas emissions.
                ``(B) The Administrator shall include in the inventory
            under this paragraph each source category that is responsible
            for at least 10 percent of the uncapped methane emissions in
            2005. Notwithstanding any other provision, the inventory
            required by this section shall not include sources of enteric
            fermentation. The list under this paragraph shall include
            industrial sources, the emissions from which, when added to the
            capped emissions from industrial sources, constitute at least
            95 percent of the greenhouse gas emissions of the industrial
            sector.
                ``(C) For purposes of this subsection, emissions shall be
            calculated using tons of carbon dioxide equivalents. In
            promulgating the inventory required by this paragraph and the
            schedule required under by paragraph (2)(C), the Administrator
            shall use the most current emissions data available at the time
            of promulgation, except as provided in subparagraph (B).
                ``(D) Notwithstanding any other provisions, the
            Administrator may list under 111(b) any source category
            identified in the inventory required by this subsection without
            making a finding that the source category causes or contributes
            significantly to, air pollution with may be reasonably
            anticipated to endanger public health or welfare.
                ``(2) Standards and schedule.--(A) For each category
            identified as provided in paragraph (1), the Administrator
            shall promulgate standards of performance under section 111 for
            the uncapped emissions of greenhouse gases from stationary
            sources in that category and shall promulgate corresponding
            regulations under section 111(d).
                ``(B) The Administrator shall promulgate standards as
            required by this subsection for stationary sources in
            categories identified as provided in paragraph (1) as
            expeditiously as practicable, assuring that--
                        ``(i) standards for identified source categories
                    that, combined, emitted 80 percent or more of the
                    greenhouse gas emissions of the identified source
                    categories shall be promulgated not later than 3 years
                    after the date of enactment of this title and shall
                    include standards for natural gas extraction; and
                        ``(ii) for all other identified source categories--
                                ``(I) standards for not less than an
                            additional 25 percent of the identified
                            categories shall be promulgated not later than
                            5 years after the date of enactment of this
                            title;
                                ``(II) standards for not less than an
                            additional 25 percent of the identified
                            categories shall be promulgated not later than
                            7 years after the date of enactment of this
                            title; and
                                ``(III) standards for all the identified
                            categories shall be promulgated not later than
                            10 years after the date of enactment of this
                            title.
                ``(C) Not later than 24 months after the date of enactment
            of this title and after notice and opportunity for comment, the
            Administrator shall publish a schedule establishing a date for
            the promulgation of standards for each category of sources
            identified pursuant to paragraph (1). The date for each
            category shall be consistent with the requirements of
            subparagraph (B). The determination of priorities for the
            promulgation of standards pursuant to this paragraph is not a
            rulemaking and shall not be subject to judicial review, except
            that failure to promulgate any standard pursuant to the
            schedule established by this paragraph shall be subject to
            review under section 304(a)(2).
                ``(D) Notwithstanding section 307, no action of the
            Administrator listing a source category under paragraph (1)
            shall be a final agency action subject to judicial review,
            except that any such action may be reviewed under section 307
            when the Administrator issues performance standards for such
            category.
        ``(b) Capped Sources.--No standard of performance shall be
    established under section 111 for capped greenhouse gas emissions from
    a capped source unless the Administrator determines that such standards
    are appropriate because of effects that do not include climate change
    effects. In promulgating a standard of performance under section 111
    for the emission from capped sources of any air pollutant that is not a
    greenhouse gas, the Administrator shall treat the emission of any
    greenhouse gas by those entities as a nonair quality public health and
    environmental impact within the meaning of section 111(a)(1).
        ``(c) Performance Standards.--For purposes of setting a performance
    standard for source categories identified pursuant to subsection (a)--
                ``(1) The Administrator shall take into account the goal of
            reducing total United States greenhouse gas emissions as set
            forth in section 702.
                ``(2) The Administrator may promulgate a design, equipment,
            work practice, or operational standard, or any combination
            thereof, under section 111 in lieu of a standard of performance
            under that section without regard to any determination of
            feasibility that would otherwise be required under section
            111(h).
                ``(3) Notwithstanding any other provision, in setting the
            level of each standard required by this section, the
            Administrator shall take into account projections of allowance
            prices, such that the marginal cost of compliance (expressed as
            dollars per ton of carbon dioxide equivalent reduced) imposed
            by the standard would not, in the judgement of the
            Administrator, be expected to exceed the Administrator's
            projected allowance prices over the time period spanning from
            the date of initial compliance to the date that the next
            revisions of the standard would come into effect pursuant to
            the schedule under section 111(b)(1)(B).
        ``(d) Definitions.--In this section, the terms `uncapped greenhouse
    gas emissions' and `uncapped methane emissions' mean those greenhouse
    gas or methane emissions, respectively, to which section 722 would not
    have applied if the requirements of this title had been in effect for
    the same year as the emissions data upon which the list is based.
        ``(e) Study of the Effects of Performance Standards.--
                ``(1) Study.--The Administrator shall conduct a study of
            the impacts of performance standards required under this
            section, which shall evaluate the effect of such standards on
            the--
                        ``(A) costs of achieving compliance with the
                    economy-wide reduction goals specified in section 702
                    and the reduction targets specified in section 703;
                        ``(B) available supply of offset credits; and
                        ``(C) ability to achieve the economy-wide reduction
                    goals specified in section 702 and any other benefits
                    of such standards.
                ``(2) Report.--The Administrator shall submit to the House
            Energy and Commerce Committee a report that describes the
            results of the study not later than 18 months after the
            publication of the standards required under subsection
            (a)(2)(B)(i).

                    ``PART C--EXEMPTIONS FROM OTHER PROGRAMS

    ``SEC. 831. CRITERIA POLLUTANTS.

        ``As of the date of the enactment of the Safe Climate Act, no
    greenhouse gas may be added to the list under section 108(a) on the
    basis of its effect on global climate change.

    ``SEC. 832. INTERNATIONAL AIR POLLUTION.

        ``Section 115 shall not apply to an air pollutant with respect to
    that pollutant's contribution to global warming.

    ``SEC. 833. HAZARDOUS AIR POLLUTANTS.

        ``No greenhouse gas may be added to the list of hazardous air
    pollutants under section 112 unless such greenhouse gas meets the
    listing criteria of section 112(b) independent of its effects on global
    climate change.

    ``SEC. 834. NEW SOURCE REVIEW.

        ``The provisions of part C of title I shall not apply to a major
    emitting facility that is initially permitted or modified after January
    1, 2009, on the basis of its emissions of any greenhouse gas.

    ``SEC. 835. TITLE V PERMITS.

        ``Notwithstanding any provision of title III or V, no stationary
    source shall be required to apply for, or operate pursuant to, a permit
    under title V, solely because the source emits any greenhouse gases
    that are regulated solely because of their effect on global climate
    change.''.

    SEC. 332. HFC REGULATION.

        (a) In General.--Title VI of the Clean Air Act (42 U.S.C. 7671 et
    seq.) (relating to stratospheric ozone protection) is amended by adding
    at the end the following:

    ``SEC. 619. HYDROFLUOROCARBONS (HFCS).

        ``(a) Treatment as Class II, Group II Substances.--Except as
    otherwise provided in this section, hydrofluorocarbons shall be treated
    as class II substances for purposes of applying the provisions of this
    title. The Administrator shall establish two groups of class II
    substances. Class II, group I substances shall include all
    hydrochlorofluorocarbons (HCFCs) listed pursuant to section 602(b).
    Class II, group II substances shall include each of the following:
                ``(1) Hydrofluorocarbon-23 (HFC-23).
                ``(2) Hydrofluorocarbon-32 (HFC-32).
                ``(3) Hydrofluorocarbon-41 (HFC-41).
                ``(4) Hydrofluorocarbon-125 (HFC-125).
                ``(5) Hydrofluorocarbon-134 (HFC-134).
                ``(6) Hydrofluorocarbon-134a (HFC-134a).
                ``(7) Hydrofluorocarbon-143 (HFC-143).
                ``(8) Hydrofluorocarbon-143a (HFC-143a).
                ``(9) Hydrofluorocarbon-152 (HFC-152).
                ``(10) Hydrofluorocarbon-152a (HFC-152a).
                ``(11) Hydrofluorocarbon-227ea (HFC-227ea).
                ``(12) Hydrofluorocarbon-236cb (HFC-236cb).
                ``(13) Hydrofluorocarbon-236ea (HFC-236ea).
                ``(14) Hydrofluorocarbon-236fa (HFC-236fa).
                ``(15) Hydrofluorocarbon-245ca (HFC-245ca).
                ``(16) Hydrofluorocarbon-245fa (HFC-245fa).
                ``(17) Hydrofluorocarbon-365mfc (HFC-365mfc).
                ``(18) Hydrofluorocarbon-43-10mee (HFC-43-10mee).
                ``(19) Hydrofluoroolefin-1234yf (HFO-1234yf).
                ``(20) Hydrofluoroolefin-1234ze (HFO-1234ze).
    Not later than 6 months after the date of enactment of this title, the
    Administrator shall publish an initial list of class II, group II
    substances, which shall include the substances listed in this
    subsection. The Administrator may add to the list of class II, group II
    substances any other substance used as a substitute for a class I or II
    substance if the Administrator determines that 1 metric ton of the
    substance makes the same or greater contribution to global warming over
    100 years as 1 metric ton of carbon dioxide. Within 24 months after the
    date of enactment of this section, the Administrator shall amend the
    regulations under this title (including the regulations referred to in
    sections 603, 608, 609, 610, 611, 612, and 613) to apply to class II,
    group II substances.
        ``(b) Consumption and Production of Class II, Group II
    Substances.--
                ``(1) In general.--
                        ``(A) Consumption phase down.--In the case of class
                    II, group II substances, in lieu of applying section
                    605 and the regulations thereunder, the Administrator
                    shall promulgate regulations phasing down the
                    consumption of class II, group II substances in the
                    United States, and the importation of products
                    containing any class II, group II substance, in
                    accordance with this subsection within 18 months after
                    the date of enactment of this section. Effective
                    January 1, 2012, it shall be unlawful for any person to
                    produce any class II, group II substance, import any
                    class II, group II substance, or import any product
                    containing any class II, group II substance without
                    holding one consumption allowance or one destruction
                    offset credit for each carbon dioxide equivalent ton of
                    the class II, group II substance. Any person who
                    exports a class II, group II substance for which a
                    consumption allowance was retired may receive a refund
                    of that allowance from the Administrator following the
                    export.
                        ``(B) Production.--If the United States becomes a
                    party or otherwise adheres to a multilateral agreement,
                    including any amendment to the Montreal Protocol on
                    Substances That Deplete the Ozone Layer, that restricts
                    the production of class II, group II substances, the
                    Administrator shall promulgate regulations establishing
                    a baseline for the production of class II, group II
                    substances in the United States and phasing down the
                    production of class II, group II substances in the
                    United States, in accordance with such multilateral
                    agreement and subject to the same exceptions and other
                    provisions as are applicable to the phase down of
                    consumption of class II, group II substances under this
                    section (except that the Administrator shall not
                    require a person who obtains production allowances from
                    the Administrator to make payment for such allowances
                    if the person is making payment for a corresponding
                    quantity of consumption allowances of the same vintage
                    year). Upon the effective date of such regulations, it
                    shall be unlawful for any person to produce any class
                    II, group II substance without holding one consumption
                    allowance and one production allowance, or one
                    destruction offset credit, for each carbon dioxide
                    equivalent ton of the class II, group II substance.
                        ``(C) Integrity of cap.--To maintain the integrity
                    of the class II, group II cap, the Administrator may,
                    through rulemaking, limit the percentage of each
                    person's compliance obligation that may be met through
                    the use of destruction offset credits or banked
                    allowances.
                        ``(D) Counting of violations.--Each consumption
                    allowance, production allowance, or destruction offset
                    credit not held as required by this section shall be a
                    separate violation of this section.
                ``(2) Schedule.--Pursuant to the regulations promulgated
            pursuant to paragraph (1)(A), the number of class II, group II
            consumption allowances established by the Administrator for
            each calendar year beginning in 2012 shall be the following
            percentage of the baseline, as established by the Administrator
            pursuant to paragraph (3):

    ----------------------------------------------------------------------------------------------------------------
                        ``Calendar Year                                        Percent of Baseline
    ----------------------------------------------------------------------------------------------------------------
    2012                                                     90
    ----------------------------------------------------------------------------------------------------------------
    2013                                                     87.5
    ----------------------------------------------------------------------------------------------------------------
    2014                                                     85
    ----------------------------------------------------------------------------------------------------------------
    2015                                                     82.5
    ----------------------------------------------------------------------------------------------------------------
    2016                                                     80
    ----------------------------------------------------------------------------------------------------------------
    2017                                                     77.5
    ----------------------------------------------------------------------------------------------------------------
    2018                                                     75
    ----------------------------------------------------------------------------------------------------------------
    2019                                                     71
    ----------------------------------------------------------------------------------------------------------------
    2020                                                     67
    ----------------------------------------------------------------------------------------------------------------
    2021                                                     63
    ----------------------------------------------------------------------------------------------------------------
    2022                                                     59
    ----------------------------------------------------------------------------------------------------------------
    2023                                                     54
    ----------------------------------------------------------------------------------------------------------------
    2024                                                     50
    ----------------------------------------------------------------------------------------------------------------
    2025                                                     46
    ----------------------------------------------------------------------------------------------------------------
    2026                                                     42
    ----------------------------------------------------------------------------------------------------------------
    2027                                                     38
    ----------------------------------------------------------------------------------------------------------------
    2028                                                     34
    ----------------------------------------------------------------------------------------------------------------
    2029                                                     30
    ----------------------------------------------------------------------------------------------------------------
    2030                                                     25
    ----------------------------------------------------------------------------------------------------------------
    2031                                                     21
    ----------------------------------------------------------------------------------------------------------------
    2032                                                     17
    ----------------------------------------------------------------------------------------------------------------
    after 2032                                               15
    ----------------------------------------------------------------------------------------------------------------

                ``(3) Baseline.--(A) Within 12 months after the date of
            enactment of this section, the Administrator shall promulgate
            regulations to establish the baseline for purposes of paragraph
            (2). The baseline shall be the sum, expressed in metric tons of
            carbon dioxide equivalents, of--
                        ``(i) the annual average consumption of all class
                    II substances in calendar years 2004, 2005, and 2006;
                    plus
                        ``(ii) the annual average quantity of all class II
                    substances contained in imported products in calendar
                    years 2004, 2005, and 2006.
                ``(B) Notwithstanding subparagraph (A), if the
            Administrator determines that the baseline is higher than 370
            million metric tons of carbon dioxide equivalents, then the
            Administrator shall establish the baseline at 370 million
            metric tons of carbon dioxide equivalents.
                ``(C) Notwithstanding subparagraph (A), if the
            Administrator determines that the baseline is lower than 280
            million metric tons of carbon dioxide equivalents, then the
            Administrator shall establish the baseline at 280 million
            metric tons of carbon dioxide equivalents.
                ``(4) Distribution of allowances.--
                        ``(A) In general.--Pursuant to the regulations
                    promulgated under paragraph (1)(A), for each calendar
                    year beginning in 2012, the Administrator shall sell
                    consumption allowances in accordance with this
                    paragraph.
                        ``(B) Establishment of pools.--The Administrator
                    shall establish two allowance pools. Eighty percent of
                    the consumption allowances available for a calendar
                    year shall be placed in the producer-importer pool, and
                    20 percent of the consumption allowances available for
                    a calendar year shall be placed in the secondary pool.
                        ``(C) Producer-importer pool.--
                                ``(i) Auction.--(I) For each calendar year,
                            the Administrator shall offer for sale at
                            auction the following percentage of the
                            consumption allowances in the producer-importer
                            pool:

    ----------------------------------------------------------------------------------------------------------------
                        ``Calendar Year                                   Percent Available for Auction
    ----------------------------------------------------------------------------------------------------------------
    2012                                                     10
    ----------------------------------------------------------------------------------------------------------------
    2013                                                     20
    ----------------------------------------------------------------------------------------------------------------
    2014                                                     30
    ----------------------------------------------------------------------------------------------------------------
    2015                                                     40
    ----------------------------------------------------------------------------------------------------------------
    2016                                                     50
    ----------------------------------------------------------------------------------------------------------------
    2017                                                     60
    ----------------------------------------------------------------------------------------------------------------
    2018                                                     70
    ----------------------------------------------------------------------------------------------------------------
    2019                                                     80
    ----------------------------------------------------------------------------------------------------------------
    2020 and thereafter                                      90
    ----------------------------------------------------------------------------------------------------------------

                                ``(II) Any person who produced or imported
                            any class II substance during calendar year
                            2004, 2005, or 2006 may participate in the
                            auction. No other persons may participate in
                            the auction unless permitted to do so pursuant
                            to subclause (III).
                                ``(III) Not later than 3 years after the
                            date of the initial auction and from time to
                            time thereafter, the Administrator shall
                            determine through rulemaking whether any
                            persons who did not produce or import a class
                            II substance during calendar year 2004, 2005,
                            or 2006 will be permitted to participate in
                            future auctions. The Administrator shall base
                            this determination on the duration,
                            consistency, and scale of such person's
                            purchases of consumption allowances in the
                            secondary pool under subparagraph (D)(ii)(III),
                            as well as economic or technical hardship and
                            other factors deemed relevant by the
                            Administrator.
                                ``(IV) The Administrator shall set a
                            minimum bid per consumption allowance of the
                            following:
                                        ``(aa) For vintage year 2012,
                                    $1.00.
                                        ``(bb) For vintage year 2013,
                                    $1.20.
                                        ``(cc) For vintage year 2014,
                                    $1.40.
                                        ``(dd) For vintage year 2015,
                                    $1.60.
                                        ``(ee) For vintage year 2016,
                                    $1.80.
                                        ``(ff) For vintage year 2017,
                                    $2.00.
                                        ``(gg) For vintage year 2018 and
                                    thereafter, $2.00 adjusted for
                                    inflation after vintage year 2017 based
                                    upon the producer price index as
                                    published by the Department of
                                    Commerce.
                                ``(ii) Non-auction sale.--(I) For each
                            calendar year, as soon as practicable after
                            auction, the Administrator shall offer for sale
                            the remaining consumption allowances in the
                            producer-importer pool at the following prices:
                                        ``(aa) A fee of $1.00 per vintage
                                    year 2012 allowance.
                                        ``(bb) A fee of $1.20 per vintage
                                    year 2013 allowance.
                                        ``(cc) A fee of $1.40 per vintage
                                    year 2014 allowance.
                                        ``(dd) For each vintage year 2015
                                    allowance, a fee equal to the average
                                    of $1.10 and the auction clearing price
                                    for vintage year 2014 allowances.
                                        ``(ee) For each vintage year 2016
                                    allowance, a fee equal to the average
                                    of $1.30 and the auction clearing price
                                    for vintage year 2015 allowances.
                                        ``(ff) For each vintage year 2017
                                    allowance, a fee equal to the average
                                    of $1.40 and the auction clearing price
                                    for vintage year 2016 allowances.
                                        ``(gg) For each allowance of
                                    vintage year 2018 and subsequent
                                    vintage years, a fee equal to the
                                    auction clearing price for that vintage
                                    year.
                                ``(II) The Administrator shall offer to
                            sell the remaining consumption allowances in
                            the producer-importer pool to producers of
                            class II, group II substances and importers of
                            class II, group II substances in proportion to
                            their relative allocation share.
                                ``(III) Such allocation share for such sale
                            shall be determined by the Administrator using
                            such producer's or importer's annual average
                            data on class II substances from calendar years
                            2004, 2005, and 2006, on a carbon dioxide
                            equivalent basis, and--
                                        ``(aa) shall be based on a
                                    producer's production, plus
                                    importation, plus acquisitions and
                                    purchases from persons who produced
                                    class II substances in the United
                                    States during calendar year 2004, 2005,
                                    or 2006, less exportation, less
                                    transfers and sales to persons who
                                    produced class II substances in the
                                    United States during calendar year
                                    2004, 2005, or 2006; and
                                        ``(bb) for an importer of class II
                                    substances that did not produce in the
                                    United States any class II substance
                                    during calendar years 2004, 2005, and
                                    2006, shall be based on the importer's
                                    importation less exportation.
                            For purposes of item (aa), the Administrator
                            shall account for 100 percent of class II,
                            group II substances and 60 percent of class II,
                            group I substances. For purposes of item (bb),
                            the Administrator shall account for 100 percent
                            of class II, group II substances and 100
                            percent of class II, group I substances.
                                ``(IV) Any consumption allowances made
                            available for nonauction sale to a specific
                            producer or importer of class II, group II
                            substances but not purchased by the specific
                            producer or importer shall be made available
                            for sale to any producer or importer of class
                            II substances during calendar year 2004, 2005,
                            or 2006. If demand for such consumption
                            allowances exceeds supply of such consumption
                            allowances, the Administrator shall develop and
                            utilize criteria for the sale of such
                            consumption allowances that may include pro
                            rata shares, historic production and
                            importation, economic or technical hardship, or
                            other factors deemed relevant by the
                            Administrator. If the supply of such
                            consumption allowances exceeds demand, the
                            Administrator may offer such consumption
                            allowances for sale in the secondary pool as
                            set forth in subparagraph (D).
                        ``(D) Secondary pool.--(i) For each calendar year,
                    as soon as practicable after the auction required in
                    subparagraph (C), the Administrator shall offer for
                    sale the consumption allowances in the secondary pool
                    at the prices listed in subparagraph (C)(ii).
                        ``(ii) The Administrator shall accept applications
                    for purchase of secondary pool consumption allowances
                    from--
                                ``(I) importers of products containing
                            class II, group II substances;
                                ``(II) persons who purchased any class II,
                            group II substance directly from a producer or
                            importer of class II, group II substances for
                            use in a product containing a class II, group
                            II substance, a manufacturing process, or a
                            reclamation process;
                                ``(III) persons who did not produce or
                            import a class II substance during calendar
                            year 2004, 2005, or 2006, but who the
                            Administrator determines have subsequently
                            taken significant steps to produce or import a
                            substantial quantity of any class II, group II
                            substance; and
                                ``(IV) persons who produced or imported any
                            class II substance during calendar year 2004,
                            2005, or 2006.
                        ``(iii) If the supply of consumption allowances in
                    the secondary pool equals or exceeds the demand for
                    consumption allowances in the secondary pool as
                    presented in the applications for purchase, the
                    Administrator shall sell the consumption allowances in
                    the secondary pool to the applicants in the amounts
                    requested in the applications for purchase. Any
                    consumption allowances in the secondary pool not
                    purchased in a calendar year may be rolled over and
                    added to the quantity available in the secondary pool
                    in the following year.
                        ``(iv) If the demand for consumption allowances in
                    the secondary pool as presented in the applications for
                    purchase exceeds the supply of consumption allowances
                    in the secondary pool, the Administrator shall sell the
                    consumption allowances as follows:
                                ``(I) The Administrator shall first sell
                            the consumption allowances in the secondary
                            pool to any importers of products containing
                            class II, group II substances in the amounts
                            requested in their applications for purchase.
                            If the demand for such consumption allowances
                            exceeds supply of such consumption allowances,
                            the Administrator shall develop and utilize
                            criteria for the sale of such consumption
                            allowances among importers of products
                            containing class II, group II substances that
                            may include pro rata shares, historic
                            importation, economic or technical hardship, or
                            other factors deemed relevant by the
                            Administrator.
                                ``(II) The Administrator shall next sell
                            any remaining consumption allowances to persons
                            identified in subclauses (II) and (III) of
                            clause (ii) in the amounts requested in their
                            applications for purchase. If the demand for
                            such consumption allowances exceeds remaining
                            supply of such consumption allowances, the
                            Administrator shall develop and utilize
                            criteria for the sale of such consumption
                            allowances among subclauses (II) and (III)
                            applicants that may include pro rata shares,
                            historic use, economic or technical hardship,
                            or other factors deemed relevant by the
                            Administrator.
                                ``(III) The Administrator shall then sell
                            any remaining consumption allowances to persons
                            who produced or imported any class II substance
                            during calendar year 2004, 2005, or 2006 in the
                            amounts requested in their applications for
                            purchase. If demand for such consumption
                            allowances exceeds remaining supply of such
                            consumption allowances, the Administrator shall
                            develop and utilize criteria for the sale of
                            such consumption allowances that may include
                            pro rata shares, historic production and
                            importation, economic or technical hardship, or
                            other factors deemed relevant by the
                            Administrator.
                                ``(IV) Each person who purchases
                            consumption allowances in a non-auction sale
                            under this subparagraph shall be required to
                            disclose the person or entity sponsoring or
                            benefitting from the purchases if such person
                            or entity is, in whole or in part, other than
                            the purchaser or the purchaser's employer.
                        ``(E) Discretion to withhold allowances.--Nothing
                    in this paragraph prevents the Administrator from
                    exercising discretion to withhold and retire
                    consumption allowances that would otherwise be
                    available for auction or nonauction sale. Not later
                    than 18 months after the date of enactment of this
                    section, the Administrator shall promulgate regulations
                    establishing criteria for withholding and retiring
                    consumption allowances.
                ``(5) Banking.--A consumption allowance or destruction
            offset credit may be used to meet the compliance obligation
            requirements of paragraph (1) in--
                        ``(A) the vintage year for the allowance or
                    destruction offset credit; or
                        ``(B) any calendar year subsequent to the vintage
                    year for the allowance or destruction offset credit.
                ``(6) Auctions.--
                        ``(A) Initial regulations.--Not later than 18
                    months after the date of enactment of this section, the
                    Administrator shall promulgate regulations governing
                    the auction of allowances under this section. Such
                    regulations shall include the following requirements:
                                ``(i) Frequency; first auction.--Auctions
                            shall be held one time per year at regular
                            intervals, with the first auction to be held no
                            later than October 31, 2011.
                                ``(ii) Auction format.--Auctions shall
                            follow a single-round, sealed-bid, uniform
                            price format.
                                ``(iii) Financial assurance.--The
                            Administrator may establish financial assurance
                            requirements to ensure that auction
                            participants can and will perform on their
                            bids.
                                ``(iv) Disclosure of beneficial
                            ownership.--Each bidder in the auction shall be
                            required to disclose the person or entity
                            sponsoring or benefitting from the bidder's
                            participation in the auction if such person or
                            entity is, in whole or in part, other than the
                            bidder.
                                ``(v) Publication of information.--After
                            the auction, the Administrator shall, in a
                            timely fashion, publish the number of bidders,
                            number of winning bidders, the quantity of
                            allowances sold, and the auction clearing
                            price.
                                ``(vi) Bidding limits in 2012.--In the
                            vintage year 2012 auction, no auction
                            participant may, directly or in concert with
                            another participant, bid for or purchase more
                            allowances offered for sale at the auction than
                            the greater of--
                                        ``(I) the number of allowances
                                    which, when added to the number of
                                    allowances available for purchase by
                                    the participant in the producer-
                                    importer pool non-auction sale, would
                                    equal the participant's annual average
                                    consumption of class II, group II
                                    substances in calendar years 2004,
                                    2005, and 2006; or
                                        ``(II) the number of allowances
                                    equal to the product of--
                                                ``(aa) 1.20 multiplied by
                                            the participant's allocation
                                            share of the producer-importer
                                            pool non-auction sale as
                                            determined under paragraph
                                            (4)(C)(ii); and
                                                ``(bb) the number of
                                            vintage year 2012 allowances
                                            offered at auction.
                                ``(vii) Bidding limits in 2013.--In the
                            vintage year 2013 auction, no auction
                            participant may, directly or in concert with
                            another participant, bid for or purchase more
                            allowances offered for sale at the auction than
                            the product of--
                                        ``(I) 1.15 multiplied by the ratio
                                    of the total number of vintage year
                                    2012 allowances purchased by the
                                    participant from the auction and from
                                    the producer-importer pool non-auction
                                    sale to the total number of vintage
                                    year 2012 allowances in the producer-
                                    importer pool; and
                                        ``(II) the number of vintage year
                                    2013 allowances offered at auction.
                                ``(viii) Bidding limits in subsequent
                            years.--In the auctions for vintage year 2014
                            and subsequent vintage years, no auction
                            participant may, directly or in concert with
                            another participant, bid for or purchase more
                            allowances offered for sale at the auction than
                            the product of--
                                        ``(I) 1.15 multiplied by the ratio
                                    of the highest number of allowances
                                    required to be held by the participant
                                    in any of the three prior vintage years
                                    to meet its compliance obligation under
                                    paragraph (1) to the total number of
                                    allowances in the producer-importer
                                    pool for such vintage year; and
                                        ``(II) the number of allowances
                                    offered at auction for that vintage
                                    year.
                                ``(ix) Other requirements.--The
                            Administrator may include in the regulations
                            such other requirements or provisions as the
                            Administrator considers necessary to promote
                            effective, efficient, transparent, and fair
                            administration of auctions under this section.
                        ``(B) Revision of regulations.--The Administrator
                    may, at any time, revise the initial regulations
                    promulgated under subparagraph (A) based on the
                    Administrator's experience in administering allowance
                    auctions by promulgating new regulations. Such revised
                    regulations need not meet the requirements identified
                    in subparagraph (A) if the Administrator determines
                    that an alternative auction design would be more
                    effective, taking into account factors including costs
                    of administration, transparency, fairness, and risks of
                    collusion or manipulation. In determining whether and
                    how to revise the initial regulations under this
                    paragraph, the Administrator shall not consider
                    maximization of revenues to the Federal Government.
                        ``(C) Delegation or contract.--Pursuant to
                    regulations under this section, the Administrator may,
                    by delegation or contract, provide for the conduct of
                    auctions under the Administrator's supervision by other
                    departments or agencies of the Federal Government or by
                    nongovernmental agencies, groups, or organizations.
                ``(7) Payments for allowances.--
                        ``(A) Initial regulations.--Not later than 18
                    months after the date of enactment of this section, the
                    Administrator shall promulgate regulations governing
                    the payment for allowances purchased in auction and
                    non-auction sales under this section. Such regulations
                    shall include the requirement that, in the event that
                    full payment for purchased allowances is not made on
                    the date of purchase, equal payments shall be made one
                    time per calendar quarter with all payments for
                    allowances of a vintage year made by the end of that
                    vintage year.
                        ``(B) Revision of regulations.-- The Administrator
                    may, at any time, revise the initial regulations
                    promulgated under subparagraph (A) based on the
                    Administrator's experience in administering collection
                    of payments by promulgating new regulations. Such
                    revised regulations need not meet the requirements
                    identified in subparagraph (A) if the Administrator
                    determines that an alternative payment structure or
                    frequency would be more effective, taking into account
                    factors including cost of administration, transparency,
                    and fairness. In determining whether and how to revise
                    the initial regulations under this paragraph, the
                    Administrator shall not consider maximization of
                    revenues to the Federal Government.
                        ``(C) Penalties for non-payment.--Failure to pay
                    for purchased allowances in accordance with the
                    regulations promulgated pursuant to this paragraph
                    shall be a violation of the requirements of subsection
                    (b). Section 113(c)(3) shall apply in the case of any
                    person who knowingly fails to pay for purchased
                    allowances in accordance with the regulations
                    promulgated pursuant to this paragraph.
                ``(8) Imported products.--If the United States becomes a
            party or otherwise adheres to a multilateral agreement,
            including any amendment to the Montreal Protocol on Substances
            That Deplete the Ozone Layer, which restricts the production or
            consumption of class II, group II substances--
                        ``(A) as of the date on which such agreement or
                    amendment enters into force, it shall no longer be
                    unlawful for any person to import from a party to such
                    agreement or amendment any product containing any class
                    II, group II substance whose production or consumption
                    is regulated by such agreement or amendment without
                    holding one consumption allowance or one destruction
                    offset credit for each carbon dioxide equivalent ton of
                    the class II, group II substance;
                        ``(B) the Administrator shall promulgate
                    regulations within 12 months of the date the United
                    States becomes a party or otherwise adheres to such
                    agreement or amendment, or the date on which such
                    agreement or amendment enters into force, whichever is
                    later, to establish a new baseline for purposes of
                    paragraph (2), which new baseline shall be the original
                    baseline less the carbon dioxide equivalent of the
                    annual average quantity of any class II substances
                    regulated by such agreement or amendment contained in
                    products imported from parties to such agreement or
                    amendment in calendar years 2004, 2005, and 2006;
                        ``(C) as of the date on which such agreement or
                    amendment enters into force, no person importing any
                    product containing any class II, group II substance
                    may, directly or in concert with another person,
                    purchase any consumption allowances for sale by the
                    Administrator for the importation of products from a
                    party to such agreement or amendment that contain any
                    class II, group II substance restricted by such
                    agreement or amendment; and
                        ``(D) the Administrator may adjust the two
                    allowance pools established in paragraph (4) such that
                    up to 90 percent of the consumption allowances
                    available for a calendar year are placed in the
                    producer-importer pool with the remaining consumption
                    allowances placed in the secondary pool.
                ``(9) Offsets.--
                        ``(A) Chlorofluorocarbon destruction.--Within 18
                    months after the date of enactment of this section, the
                    Administrator shall promulgate regulations to provide
                    for the issuance of offset credits for the destruction,
                    in the calendar year 2012 or later, of
                    chlorofluorocarbons in the United States. The
                    Administrator shall establish and distribute to the
                    destroying entity a quantity of destruction offset
                    credits equal to 0.8 times the number of metric tons of
                    carbon dioxide equivalents of reduction achieved
                    through the destruction. No destruction offset credits
                    shall be established for the destruction of a class II,
                    group II substance.
                        ``(B) Definition.--For purposes of this paragraph,
                    the term `destruction' means the conversion of a
                    substance by thermal, chemical, or other means to
                    another substance with little or no carbon dioxide
                    equivalent value and no ozone depletion potential.
                        ``(C) Regulations.--The regulations promulgated
                    under this paragraph shall include standards and
                    protocols for project eligibility, certification of
                    destroyers, monitoring, tracking, destruction
                    efficiency, quantification of project and baseline
                    emissions and carbon dioxide equivalent value, and
                    verification. The Administrator shall ensure that
                    destruction offset credits represent real and
                    verifiable destruction of chlorofluorocarbons or other
                    class I or class II, group I, substances authorized
                    under subparagraph (D).
                        ``(D) Other substances.--The Administrator may
                    promulgate regulations to add to the list of class I
                    and class II, group I, substances that may be destroyed
                    for destruction offset credits, taking into account a
                    candidate substance's carbon dioxide equivalent value,
                    ozone depletion potential, prevalence in banks in the
                    United States, and emission rates, as well as the need
                    for additional cost containment under the class II,
                    group II cap and the integrity of the class II, group
                    II cap. The Administrator shall not add a class I or
                    class II, group I substance to the list if the
                    consumption of the substance has not been completely
                    phased-out internationally (except for essential use
                    exemptions or other similar exemptions) pursuant to the
                    Montreal Protocol.
                        ``(E) Extension of offsets.--(i) At any time after
                    the Administrator promulgates regulations pursuant to
                    subparagraph (A), the Administrator may, pursuant to
                    the requirements of part D of title VII and based on
                    the carbon dioxide equivalent value of the substance
                    destroyed, add the types of destruction projects
                    authorized to receive destruction offset credits under
                    this paragraph to the list of types of projects
                    eligible for offset credits under section 733. If such
                    projects are added to the list under section 733, the
                    issuance of offset credits for such projects under part
                    D of title VII shall be governed by the requirements of
                    such part D, while the issuance of offset credits for
                    such projects under this paragraph shall be governed by
                    the requirements of this paragraph. Nothing in this
                    paragraph shall affect the issuance of offset credits
                    under section 740.
                        ``(ii) The Administrator shall not make the
                    addition under clause (i) unless the Administrator
                    finds that insufficient destruction is occurring or is
                    projected to occur under this paragraph and that the
                    addition would increase destruction.
                        ``(iii) In no event shall more than one destruction
                    offset credit be issued under title VII and this
                    section for the destruction of the same quantity of a
                    substance.
                ``(10) Legal status of allowances and credits.--None of the
            following constitutes a property right:
                        ``(A) A production or consumption allowance.
                        ``(B) A destruction offset credit.
        ``(c) Deadlines for Compliance.--Notwithstanding the deadlines
    specified for class II substances in sections 608, 609, 610, 612, and
    613 that occur prior to January 1, 2009, the deadline for promulgating
    regulations under those sections for class II, group II substances
    shall be January 1, 2012.
        ``(d) Exceptions for Essential Uses.--Notwithstanding any phase
    down of production and consumption required by this section, to the
    extent consistent with any applicable multilateral agreement to which
    the United States is a party or otherwise adheres, the Administrator
    may provide the following exceptions for essential uses:
                ``(1) Medical devices.--The Administrator, after notice and
            opportunity for public comment, and in consultation with the
            Commissioner of the Food and Drug Administration, may provide
            an exception for the production and consumption of class II,
            group II substances solely for use in medical devices.
                ``(2) Aviation and space vehicle safety.--The
            Administrator, after notice and opportunity for public comment,
            may authorize the production and consumption of limited
            quantities of class II, group II substances solely for the
            purposes of aviation or space vehicle safety if either the
            Administrator of the Federal Aviation Administration or the
            Administrator of the National Aeronautics and Space
            Administration, in consultation with the Administrator,
            determines that no safe and effective substitute has been
            developed and that such authorization is necessary for aviation
            or space flight safety purposes.
        ``(e) Developing Countries.--Notwithstanding any phase down of
    production required by this section, the Administrator, after notice
    and opportunity for public comment, may authorize the production of
    limited quantities of class II, group II substances in excess of the
    amounts otherwise allowable under this section solely for export to,
    and use in, developing countries. Any production authorized under this
    subsection shall be solely for purposes of satisfying the basic
    domestic needs of such countries as provided in applicable
    international agreements, if any, to which the United States is a party
    or otherwise adheres.
        ``(f) National Security; Fire Suppression, etc.--The provisions of
    subsection (f) and paragraphs (1) and (2) of subsection (g) of section
    604 shall apply to any consumption and production phase down of class
    II, group II substances in the same manner and to the same extent,
    consistent with any applicable international agreement to which the
    United States is a party or otherwise adheres, as such provisions apply
    to the substances specified in such subsection.
        ``(g) Accelerated Schedule.--In lieu of section 606, the provisions
    of paragraphs (1), (2), and (3) of this subsection shall apply in the
    case of class II, group II substances.
                ``(1) In general.--The Administrator shall promulgate
            initial regulations not later than 18 months after the date of
            enactment of this section, and revised regulations any time
            thereafter, which establish a schedule for phasing down the
            consumption (and, if the condition in subsection (b)(1)(B) is
            met, the production) of class II, group II substances that is
            more stringent than the schedule set forth in this section if,
            based on the availability of substitutes, the Administrator
            determines that such more stringent schedule is practicable,
            taking into account technological achievability, safety, and
            other factors the Administrator deems relevant, or if the
            Montreal Protocol, or any applicable international agreement to
            which the United States is a party or otherwise adheres, is
            modified or established to include a schedule or other
            requirements to control or reduce production, consumption, or
            use of any class II, group II substance more rapidly than the
            applicable schedule under this section.
                ``(2) Petition.--Any person may submit a petition to
            promulgate regulations under this subsection in the same manner
            and subject to the same procedures as are provided in section
            606(b).
                ``(3) Inconsistency.--If the Administrator determines that
            the provisions of this section regarding banking, allowance
            rollover, or destruction offset credits create a significant
            potential for inconsistency with the requirements of any
            applicable international agreement to which the United States
            is a party or otherwise adheres, the Administrator may
            promulgate regulations restricting the availability of banking,
            allowance rollover, or destruction offset credits to the extent
            necessary to avoid such inconsistency.
        ``(h) Exchange.--Section 607 shall not apply in the case of class
    II, group II substances. Production and consumption allowances for
    class II, group II substances may be freely exchanged or sold but may
    not be converted into allowances for class II, group I substances.
        ``(i) Labeling.--(1) In applying section 611 to products containing
    or manufactured with class II, group II substances, in lieu of the
    words `destroying ozone in the upper atmosphere' on labels required
    under section 611 there shall be substituted the words `contributing to
    global warming'.
        ``(2) The Administrator may, through rulemaking, exempt from the
    requirements of section 611 products containing or manufactured with
    class II, group II substances determined to have little or no carbon
    dioxide equivalent value compared to other substances used in similar
    products.
        ``(j) Nonessential Products.--For the purposes of section 610,
    class II, group II substances shall be regulated under section 610(b),
    except that in applying section 610(b) the word `hydrofluorocarbon'
    shall be substituted for the word `chlorofluorocarbon' and the term
    `class II, group II' shall be substituted for the term `class I'. Class
    II, group II substances shall not be subject to the provisions of
    section 610(d).
        ``(k) International Transfers.--In the case of class II, group II
    substances, in lieu of section 616, this subsection shall apply. To the
    extent consistent with any applicable international agreement to which
    the United States is a party or otherwise adheres, including any
    amendment to the Montreal Protocol, the United States may engage in
    transfers with other parties to such agreement or amendment under the
    following conditions:
                ``(1) The United States may transfer production allowances
            to another party to such agreement or amendment if, at the time
            of the transfer, the Administrator establishes revised
            production limits for the United States accounting for the
            transfer in accordance with regulations promulgated pursuant to
            this subsection.
                ``(2) The United States may acquire production allowances
            from another party to such agreement or amendment if, at the
            time of the transfer, the Administrator finds that the other
            party has revised its domestic production limits in the same
            manner as provided with respect to transfers by the United
            States in the regulations promulgated pursuant to this
            subsection.
        ``(l) Relationship to Other Laws.--
                ``(1) State laws.--For purposes of section 116, the
            requirements of this section for class II, group II substances
            shall be treated as requirements for the control and abatement
            of air pollution.
                ``(2) Multilateral agreements.--Section 614 shall apply to
            the provisions of this section concerning class II, group II
            substances, except that for the words `Montreal Protocol' there
            shall be substituted the words `Montreal Protocol, or any
            applicable multilateral agreement to which the United States is
            a party or otherwise adheres that restricts the production or
            consumption of class II, group II substances,' and for the
            words `Article 4 of the Montreal Protocol' there shall be
            substituted `any provision of such multilateral agreement
            regarding trade with non-parties'.
                ``(3) Federal facilities.--For purposes of section 118, the
            requirements of this section for class II, group II substances
            and corresponding State, interstate, and local requirements,
            administrative authority, and process and sanctions shall be
            treated as requirements for the control and abatement of air
            pollution within the meaning of section 118.
        ``(m) Carbon Dioxide Equivalent Value.--(1) In lieu of section
    602(e), the provisions of this subsection shall apply in the case of
    class II, group II substances. Simultaneously with establishing the
    list of class II, group II substances, and simultaneously with any
    addition to that list, the Administrator shall publish the carbon
    dioxide equivalent value of each listed class II, group II substance,
    based on a determination of the number of metric tons of carbon dioxide
    that makes the same contribution to global warming over 100 years as 1
    metric ton of each class II, group II substance.
        ``(2) Not later than February 1, 2017, and not less than every 5
    years thereafter, the Administrator shall--
                ``(A) review, and if appropriate, revise the carbon dioxide
            equivalent values established for class II, group II substances
            based on a determination of the number of metric tons of carbon
            dioxide that makes the same contributions to global warming
            over 100 years as 1 metric ton of each class II, group II
            substance; and
                ``(B) publish in the Federal Register the results of that
            review and any revisions.
        ``(3) A revised determination published in the Federal Register
    under paragraph (2)(B) shall take effect for production of class II,
    group II substances, consumption of class II, group II substances, and
    importation of products containing class II, group II substances
    starting on January 1 of the first calendar year starting at least 9
    months after the date on which the revised determination was published.
        ``(4) The Administrator may decrease the frequency of review and
    revision under paragraph (2) if the Administrator determines that such
    decrease is appropriate in order to synchronize such review and
    revisions with any similar review process carried out pursuant to the
    United Nations Framework Convention on Climate Change, an agreement
    negotiated under that convention, The Vienna Convention for the
    Protection of the Ozone Layer, or an agreement negotiated under that
    convention, except that in no event shall the Administrator carry out
    such review and revision any less frequently than every 10 years.
        ``(n) Reporting Requirements.--In lieu of subsections (b) and (c)
    of section 603, paragraphs (1) and (2) of this subsection shall apply
    in the case of class II, group II substances:
                ``(1) In general.--On a quarterly basis, or such other
            basis (not less than annually) as determined by the
            Administrator, each person who produced, imported, or exported
            a class II, group II substance, or who imported a product
            containing a class II, group II substance, shall file a report
            with the Administrator setting forth the carbon dioxide
            equivalent amount of the substance that such person produced,
            imported, or exported, as well as the amount that was contained
            in products imported by that person, during the preceding
            reporting period. Each such report shall be signed and attested
            by a responsible officer. If all other reporting is complete,
            no such report shall be required from a person after April 1 of
            the calendar year after such person permanently ceases
            production, importation, and exportation of the substance, as
            well as importation of products containing the substance, and
            so notifies the Administrator in writing. If the United States
            becomes a party or otherwise adheres to a multilateral
            agreement, including any amendment to the Montreal Protocol on
            Substances That Deplete the Ozone Layer, that restricts the
            production or consumption of class II, group II substances,
            then, if all other reporting is complete, no such report shall
            be required from a person with respect to importation from
            parties to such agreement or amendment of products containing
            any class II, group II substance restricted by such agreement
            or amendment, after April 1 of the calendar year following the
            year during which such agreement or amendment enters into
            force.
                ``(2) Baseline reports for class ii, group ii substances.--
                        ``(A) In general.--Unless such information has been
                    previously reported to the Administrator, on the date
                    on which the first report under paragraph (1) of this
                    subsection is required to be filed, each person who
                    produced, imported, or exported a class II, group II
                    substance, or who imported a product containing a class
                    II substance, (other than a substance added to the list
                    of class II, group II substances after the publication
                    of the initial list of such substances under this
                    section), shall file a report with the Administrator
                    setting forth the amount of such substance that such
                    person produced, imported, exported, or that was
                    contained in products imported by that person, during
                    each of calendar years 2004, 2005, and 2006.
                        ``(B) Producers.--In reporting under subparagraph
                    (A), each person who produced in the United States a
                    class II substance during calendar year 2004, 2005, or
                    2006 shall--
                                ``(i) report all acquisitions or purchases
                            of class II substances during each of calendar
                            years 2004, 2005, and 2006 from all other
                            persons who produced in the United States a
                            class II substance during calendar year 2004,
                            2005, or 2006, and supply evidence of such
                            acquisitions and purchases as deemed necessary
                            by the Administrator; and
                                ``(ii) report all transfers or sales of
                            class II substances during each of calendar
                            years 2004, 2005, and 2006 to all other persons
                            who produced in the United States a class II
                            substance during calendar year 2004, 2005, or
                            2006, and supply evidence of such transfers and
                            sales as deemed necessary by the Administrator.
                        ``(C) Added substances.--In the case of a substance
                    added to the list of class II, group II substances
                    after publication of the initial list of such
                    substances under this section, each person who
                    produced, imported, exported, or imported products
                    containing such substance in calendar year 2004, 2005,
                    or 2006 shall file a report with the Administrator
                    within 180 days after the date on which such substance
                    is added to the list, setting forth the amount of the
                    substance that such person produced, imported, and
                    exported, as well as the amount that was contained in
                    products imported by that person, in calendar years
                    2004, 2005, and 2006.
        ``(o) Stratospheric Ozone and Climate Protection Fund.--
                ``(1) In general.--There is established in the Treasury of
            the United States a Stratospheric Ozone and Climate Protection
            Fund.
                ``(2) Deposits.--The Administrator shall deposit all
            proceeds from the auction and non-auction sale of allowances
            under this section into the Stratospheric Ozone and Climate
            Protection Fund.
                ``(3) Use.--Amounts deposited into the Stratospheric Ozone
            and Climate Protection Fund shall be available, subject to
            appropriations, exclusively for the following purposes:
                        ``(A) Recovery, recycling, and reclamation.--The
                    Administrator may utilize funds to establish a program
                    to incentivize the recovery, recycling, and reclamation
                    of any Class II substances in order to reduce emissions
                    of such substances.
                        ``(B) Multilateral fund.--If the United States
                    becomes a party or otherwise adheres to a multilateral
                    agreement, including any amendment to the Montreal
                    Protocol on Substances That Deplete the Ozone Layer,
                    which restricts the production or consumption of class
                    II, group II substances, the Administrator may utilize
                    funds to meet any related contribution obligation of
                    the United States to the Multilateral Fund for the
                    Implementation of the Montreal Protocol or similar
                    multilateral fund established under such multilateral
                    agreement.
                        ``(C) Best-in-class appliances deployment
                    program.--The Secretary of Energy is authorized to
                    utilize funds to carry out the purposes of section 214
                    of the American Clean Energy and Security Act of 2009.
                        ``(D) Low global warming product transition
                    assistance program.--
                                ``(i) In general.--The Administrator, in
                            consultation with the Secretary of Energy, may
                            utilize funds in fiscal years 2012 through 2022
                            to establish a program to provide financial
                            assistance to manufacturers of products
                            containing class II, group II substances to
                            facilitate the transition to products that
                            contain or utilize alternative substances with
                            no or low carbon dioxide equivalent value and
                            no ozone depletion potential.
                                ``(ii) Definition.--In this subparagraph,
                            the term `products' means refrigerators,
                            freezers, dehumidifiers, air conditioners, foam
                            insulation, technical aerosols, fire protection
                            systems, and semiconductors.
                                ``(iii) Financial assistance.--The
                            Administrator may provide financial assistance
                            to manufacturers pursuant to clause (i) for--
                                        ``(I) the design and configuration
                                    of new products that use alternative
                                    substances with no or low carbon
                                    dioxide equivalent value and no ozone
                                    depletion potential; and
                                        ``(II) the redesign and retooling
                                    of facilities for the manufacture of
                                    products in the United States that use
                                    alternative substances with no or low
                                    carbon dioxide equivalent value and no
                                    ozone depletion potential.
                                ``(iv) Reports.--For any fiscal year during
                            which the Administrator provides financial
                            assistance pursuant to this subparagraph, the
                            Administrator shall submit a report to the
                            Congress within 3 months of the end of such
                            fiscal year detailing the amounts, recipients,
                            specific purposes, and results of the financial
                            assistance provided.''.
        (b) Table of Contents.--The table of contents of title VI of the
    Clean Air Act (42 U.S.C. 7671 et seq.) is amended by adding the
    following new item at the end thereof:

    ``Sec. 619. Hydrofluorocarbons (HFCs).''.
        (c) Fire Suppression Agents.--Section 605(a) of the Clean Air Act
    (42 U.S.C. 7671(a)) is amended--
                (1) by striking ``or'' at the end of paragraph (2);
                (2) by striking the period at the end of paragraph (3) and
            inserting ``; or''; and
                (3) by adding the following new paragraph after paragraph
            (3):
                ``(4) is listed as acceptable for use as a fire suppression
            agent for nonresidential applications in accordance with
            section 612(c).''.
        (d) Motor Vehicle Air Conditioners.--
                (1) Section 609(e) of the Clean Air Act (42 U.S.C.
            7671h(e)) is amended by inserting ``, group I'' after each
            reference to ``class II'' in the text and heading.
                (2) Section 609 of the Clean Air Act (42 U.S.C. 7671h) is
            amended by adding the following new subsection after subsection
            (e):
        ``(f) Class II, Group II Substances.--
                ``(1) Repair.--The Administrator may promulgate regulations
            establishing requirements for repair of motor vehicle air
            conditioners prior to adding a class II, group II substance.
                ``(2) Small containers.--(A) The Administrator may
            promulgate regulations establishing servicing practices and
            procedures for recovery of class II, group II substances from
            containers which contain less than 20 pounds of such class II,
            group II substances.
                ``(B) Not later than 18 months after enactment of this
            subsection, the Administrator shall either promulgate
            regulations requiring that containers which contain less than
            20 pounds of a class II, group II substance be equipped with a
            device or technology that limits refrigerant emissions and
            leaks from the container and limits refrigerant emissions and
            leaks during the transfer of refrigerant from the container to
            the motor vehicle air conditioner or issue a determination that
            such requirements are not necessary or appropriate.
                ``(C) Not later than 18 months after enactment of this
            subsection, the Administrator shall promulgate regulations
            establishing requirements for consumer education materials on
            best practices associated with the use of containers which
            contain less than 20 pounds of a class II, group II substance
            and prohibiting the sale or distribution, or offer for sale or
            distribution, of any class II, group II substance in any
            container which contains less than 20 pounds of such class II,
            group II substance, unless consumer education materials
            consistent with such requirements are displayed and available
            at point-of-sale locations, provided to the consumer, or
            included in or on the packaging of the container which contain
            less than 20 pounds of a class II, group II substance.
                ``(D) The Administrator may, through rulemaking, extend the
            requirements established under this paragraph to containers
            which contain 30 pounds or less of a class II, group II
            substance if the Administrator determines that such action
            would produce significant environmental benefits.
                ``(3) Restriction of sales.--Effective January 1, 2014, no
            person may sell or distribute or offer to sell or distribute or
            otherwise introduce into interstate commerce any motor vehicle
            air conditioner refrigerant in any size container unless the
            substance has been found acceptable for use in a motor vehicle
            air conditioner under section 612.''.
        (e) Safe Alternatives Policy.--Section 612(e) of the Clean Air Act
    (42 U.S.C. 7671k(e)) is amended by inserting ``or class II'' after each
    reference to ``class I''.

    SEC. 333. BLACK CARBON.

        (a) Definition.--As used in this section, the term ``black carbon''
    means primary light absorbing aerosols, as defined by the
    Administrator, based on the best available science.
        (b) Black Carbon Abatement Report.--Not later than 1 year after the
    date of enactment of this section, the Administrator shall, in
    consultation with other appropriate Federal agencies, submit to
    Congress a report regarding black carbon emissions. The report shall
    include the following:
                (1) A summary of the current information and research that
            identifies--
                        (A) an inventory of the major sources of black
                    carbon emissions in the United States and throughout
                    the world, including--
                                (i) an estimate of the quantity of current
                            and projected future emissions; and
                                (ii) the net climate forcing of the
                            emissions from such sources, including
                            consideration of co-emissions of other
                            pollutants;
                        (B) effective and cost-effective control
                    technologies, operations, and strategies for additional
                    domestic and international black carbon emissions
                    reductions, such as diesel retrofit technologies on
                    existing on-road, non-road, and stationary engines and
                    programs to address residential cookstoves, and forest
                    and agriculture-based burning;
                        (C) potential metrics and approaches for
                    quantifying the climatic effects of black carbon
                    emissions, including its radiative forcing and warming
                    effects, that may be used to compare the climate
                    benefits of different mitigation strategies, including
                    an assessment of the uncertainty in such metrics and
                    approaches; and
                        (D) the public health and environmental benefits
                    associated with additional controls for black carbon
                    emissions.
                (2) Recommendations regarding--
                        (A) development of additional emissions monitoring
                    techniques and capabilities, modeling, and other black
                    carbon-related areas of study;
                        (B) areas of focus for additional study of
                    technologies, operations, and strategies with the
                    greatest potential to reduce emissions of black carbon
                    and associated public health, economic, and
                    environmental impacts associated with these emissions;
                    and
                        (C) actions, in addition to those identified by the
                    Administrator under section 851 of the Clean Air Act
                    (as added by subsection (c)), the Federal Government
                    may take to encourage or require reductions in black
                    carbon emissions.
        (c) Black Carbon Mitigation.--Title VIII of the Clean Air Act, as
    added by section 331 of this Act, and amended by section 222 of this
    Act, is further amended by adding after part D the following new part:

                             ``PART E--BLACK CARBON

    ``SEC. 851. BLACK CARBON.

        ``(a) Domestic Black Carbon Mitigation.--Not later than 18 months
    after the date of enactment of this section, the Administrator, taking
    into consideration the public health and environmental impacts of black
    carbon emissions, including the effects on global and regional warming,
    the Arctic, and other snow and ice-covered surfaces, shall propose
    regulations under the existing authorities of this Act to reduce
    emissions of black carbon or propose a finding that existing
    regulations promulgated pursuant to this Act adequately regulate black
    carbon emissions. Not later than 2 years after the date of enactment of
    this section, the Administrator shall promulgate final regulations
    under the existing authorities of this Act or finalize the proposed
    finding. Such regulations shall not apply to specific types, classes,
    categories, or other suitable groupings of emissions sources that the
    Administrator finds are subject to adequate regulation.
        ``(b) International Black Carbon Mitigation.--
                ``(1) Report.--Not later than 1 year after the date of
            enactment of this section, the Administrator, in coordination
            with the Secretary of State and other appropriate Federal
            agencies, shall transmit a report to Congress on the amount,
            type, and direction of all present United States financial,
            technical, and related assistance to foreign countries to
            reduce, mitigate, and otherwise abate black carbon emissions.
                ``(2) Other opportunities.--The report required under
            paragraph (1) shall also identify opportunities and
            recommendations, including action under existing authorities,
            to achieve significant black carbon emission reductions in
            foreign countries through technical assistance or other
            approaches to--
                        ``(A) promote sustainable solutions to bring clean,
                    efficient, safe, and affordable stoves, fuels, or both
                    stoves and fuels to residents of developing countries
                    that are reliant on solid fuels such as wood, dung,
                    charcoal, coal, or crop residues for home cooking and
                    heating, so as to help reduce the public health,
                    environmental, and economic impacts of black carbon
                    emissions from these sources by--
                                ``(i) identifying key regions for large-
                            scale demonstration efforts, and key partners
                            in each such region; and
                                ``(ii) developing for each such region a
                            large-scale implementation strategy with a goal
                            of collectively reaching 20,000,000 homes over
                            5 years with interventions that will--
                                        ``(I) increase stove efficiency by
                                    over 50 percent (or such other goal as
                                    determined by the Administrator);
                                        ``(II) reduce emissions of black
                                    carbon by over 60 percent (or such
                                    other goal as determined by the
                                    Administrator); and
                                        ``(III) reduce the incidence of
                                    severe pneumonia in children under 5
                                    years old by over 30 percent (or such
                                    other goal as determined by the
                                    Administrator);
                        ``(B) make technological improvements to diesel
                    engines and provide greater access to fuels that emit
                    less or no black carbon;
                        ``(C) reduce unnecessary agricultural or other
                    biomass burning where feasible alternatives exist;
                        ``(D) reduce unnecessary fossil fuel burning that
                    produces black carbon where feasible alternatives
                    exist;
                        ``(E) reduce other sources of black carbon
                    emissions; and
                        ``(F) improve capacity to achieve greater
                    compliance with existing laws to address black carbon
                    emissions.''.
        (d) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    SEC. 334. STATES.

        Section 116 of the Clean Air Act (42 U.S.C. 7416) is amended by
    adding the following at the end thereof: ``For the purposes of this
    section, the phrases `standard or limitation respecting emissions of
    air pollutants' and `requirements respecting control or abatement of
    air pollution' shall include any provision to: cap greenhouse gas
    emissions, require surrender to the State or a political subdivision
    thereof of emission allowances or offset credits established or issued
    under this Act, and require the use of such allowances or credits as a
    means of demonstrating compliance with requirements established by a
    State or political subdivision thereof.''.

    SEC. 335. STATE PROGRAMS.

        Title VIII of the Clean Air Act, as added by section 331 of this
    Act and amended by several sections of this Act, is further amended by
    adding after part E (as added by section 333(c) of this Act) the
    following new part:

                            ``PART F--MISCELLANEOUS

    ``SEC. 861. STATE PROGRAMS.

        ``Notwithstanding section 116, no State or political subdivision
    thereof shall implement or enforce a cap and trade program that covers
    any capped emissions emitted during the years 2012 through 2017. For
    purposes of this section, the term `cap and trade program' means a
    system of greenhouse gas regulation under which a State or political
    subdivision issues a limited number of tradable instruments in the
    nature of emission allowances and requires that sources within its
    jurisdiction surrender such tradeable instruments for each unit of
    greenhouse gases emitted during a compliance period. For purposes of
    this section, a `cap-and-trade program' does not include a target or
    limit on greenhouse gas emissions adopted by a State or political
    subdivision that is implemented other than through the issuance and
    surrender of a limited number of tradable instruments in the nature of
    emission allowances, nor does it include any other standard, limit,
    regulation, or program to reduce greenhouse gas emissions that is not
    implemented through the issuance and surrender of a limited number of
    tradeable instruments in the nature of emission allowances. For
    purposes of this section, the term `cap and trade program' does not
    include, among other things, fleet-wide motor vehicle emission
    requirements that allow greater emissions with increased vehicle
    production, or requirements that fuels, or other products, meet an
    average pollution emission rate or lifecycle greenhouse gas standard.

    ``SEC. 862. GRANTS FOR SUPPORT OF AIR POLLUTION CONTROL PROGRAMS.

        ``The Administrator is authorized to make grants to air pollution
    control agencies pursuant to section 105 for purposes of assisting in
    the implementation of programs to address global warming established
    under the Safe Climate Act.''.

    SEC. 336. ENFORCEMENT.

        (a) Remand.--Section 307(b) of the Clean Air Act (42 U.S.C.
    7607(b)) is amended by adding the following new paragraphs at the end
    thereof:
                ``(3) If the court determines that any action of the
            Administrator is arbitrary, capricious, or otherwise unlawful,
            the court may remand such action, without vacatur, if vacatur
            would impair or delay protection of the environment or public
            health or otherwise undermine the timely achievement of the
            purposes of this Act.
                ``(4) If the court determines that any action of the
            Administrator is arbitrary, capricious, or otherwise unlawful,
            and remands the matter to the Administrator, the Administrator
            shall complete final action on remand within an expeditious
            time period no longer than the time originally allowed for the
            action or 1 year, whichever is less, unless the court on motion
            determines that a shorter or longer period is necessary,
            appropriate, and consistent with the purposes of this Act. The
            court of appeals shall have jurisdiction to enforce a deadline
            for action on remand under this subparagraph.''.
        (b) Petition for Reconsideration.--Section 307(d)(7)(B) of the
    Clean Air Act (42 U.S.C. 7607(d)(7)(B)) is amended as follows:
                (1) By inserting after the second sentence ``If a petition
            for reconsideration is filed, the Administrator shall take
            final action on such petition, including promulgation of final
            action either revising or determining not to revise the action
            for which reconsideration is sought, within 150 days after the
            petition is received by the Administrator or the petition shall
            be deemed denied for the purpose of judicial review.''.
                (2) By amending the third sentence to read as follows:
            ``Such person may seek judicial review of such denial, or of
            any other final action, by the Administrator, in response to a
            petition for reconsideration, in the United States court of
            appeals for the appropriate circuit (as provided in subsection
            (b)).''.

    SEC. 337. CONFORMING AMENDMENTS.

        (a) Federal Enforcement.--Section 113 of the Clean Air Act (42
    U.S.C. 7413) is amended as follows:
                (1) In subsection (a)(3), by striking ``or title VI,'' and
            inserting ``title VI, title VII, or title VIII''.
                (2) In subsection (b), by striking ``or a major stationary
            source'' and inserting ``a major stationary source, or a
            covered EGU under title VIII'' in the material preceding
            paragraph (1).
                (3) In paragraph (2) of subsection (b), by striking ``or
            title VI'' and inserting ``title VI, title VII, or title
            VIII''.
                (4) In subsection (c)--
                        (A) in the first sentence of paragraph (1), by
                    striking ``or title VI (relating to stratospheric ozone
                    control),'' and inserting ``title VI, title VII, or
                    title VIII,''; and
                        (B) in the first sentence of paragraph (3), by
                    striking ``or VI'' and inserting ``VI, VII, or VIII''.
                (5) In subsection (d)(1)(B), by striking ``or VI'' and
            inserting ``VI, VII, or VIII''.
                (6) In subsection (f), in the first sentence, by striking
            ``or VI'' and inserting ``VI, VII, or VIII''.
        (b) Retention of State Authority.--Section 116 of the Clean Air Act
    (42 U.S.C. 7416) is amended as follows:
                (1) By striking ``and 233'' and inserting ``233''.
                (2) By striking ``of moving sources)'' and inserting ``of
            moving sources), and 861 (preempting certain State greenhouse
            gas programs for a limited time)''.
        (c) Inspections, Monitoring, and Entry.--Section 114(a) of the
    Clean Air Act (42 U.S.C. 7414(a)) is amended by striking ``section
    112,'' and all that follows through ``(ii)'' and inserting the
    following: ``section 112, or any regulation of greenhouse gas emissions
    under title VII or VIII, (ii)''.
        (d) Enforcement.--Subsection (f) of section 304 of the Clean Air
    Act (42 U.S.C. 7604(f)) is amended as follows:
                (1) By striking ``; or'' at the end of paragraph (3)
            thereof and inserting a comma.
                (2) By striking the period at the end of paragraph (4)
            thereof and inserting ``, or''.
                (3) By adding the following after paragraph (4) thereof:
                ``(5) any requirement of title VII or VIII.''.
        (e) Administrative Proceedings and Judicial Review.--Section 307 of
    the Clean Air Act (42 U.S.C. 7607) is amended as follows:
                (1) In subsection (a), by striking ``, or section 306'' and
            inserting ``section 306, or title VII or VIII''.
                (2) In subsection (b)(1)--
                        (A) by striking ``,,'' and inserting ``,'' in each
                    place such punctuation appears; and
                        (B) by striking ``section 120,'' in the first
                    sentence and inserting ``section 120, any final action
                    under title VII or VIII,''.
                (3) In subsection (d)(1) by amending subparagraph (S) to
            read as follows:
                        ``(S) the promulgation or revision of any
                    regulation under title VII or VIII,''.

    SEC. 338. DAVIS-BACON COMPLIANCE.

        (a) In General.--Notwithstanding any other provision of law and in
    a manner consistent with other provisions in this Act, to receive
    emission allowances or funding under this Act, or the amendments made
    by this Act, the recipient shall provide reasonable assurances that all
    laborers and mechanics employed by contractors and subcontractors on
    projects funded directly by or assisted in whole or in part by and
    through the Federal Government pursuant to this Act, or the amendments
    made by this Act, or by any entity established in accordance with this
    Act, or the amendments made by this Act, including the Carbon Storage
    Research Corporation, will be paid wages at rates not less than those
    prevailing on projects of a character similar in the locality as
    determined by the Secretary of Labor in accordance with subchapter IV
    of chapter 31 of title 40, United States Code (commonly known as the
    ``Davis-Bacon Act''). With respect to the labor standards specified in
    this section, the Secretary of Labor shall have the authority and
    functions set forth in Reorganization Plan Numbered 14 of 1950 (64
    Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States
    Code.
        (b) Exemption.--Neither subsection (a) nor the requirements of
    subchapter IV of chapter 31 of title 40, United States Code, shall
    apply to retrofitting of the following:
                (1) Single family homes (both attached and detached) under
            section 202.
                (2) Owner-occupied residential units in larger buildings
            that have their own dedicated space-conditioning systems under
            section 202.
                (3) Residential buildings (as defined in section 202(a)(5))
            if designed for residential use by less than 4 families.
                (4) Nonresidential buildings (as defined in section
            202(a)(1)) if the net interior space of such nonresidential
            building is less than 6,500 square feet.

    SEC. 339. NATIONAL STRATEGY FOR DOMESTIC BIOLOGICAL CARBON
                  SEQUESTRATION.

        Not later than 1 year after the date of enactment of this Act, the
    Administrator of the Environmental Protection Agency, in consultation
    with the Secretary of Energy, the Secretary of Agriculture, the
    Secretary of the Interior, and the heads of such other relevant Federal
    agencies as the President may designate, shall submit to Congress a
    report setting forth a unified and comprehensive strategy to address
    the key legal, regulatory, technological, and other barriers to
    maximizing the potential for sustainable biological sequestration of
    carbon within the United States.

    SEC. 340. REDUCING ACID RAIN AND MERCURY POLLUTION.

        Not later than 18 months after the date of enactment of this Act,
    the Administrator shall submit to Congress a report that analyzes the
    effects of different carbon dioxide reduction strategies and
    technologies on the emissions of mercury, sulfur dioxide, and nitrogen
    oxide, which cause acid rain, particulate matter, ground level ozone,
    mercury contamination, and other environmental problems. The report
    shall assess a variety of carbon reduction technologies, including the
    application of various carbon capture and sequestration technologies
    for both new and existing power plants. The report shall assess the
    current scientific and technical understanding of the interplay between
    the various technologies and emissions of air pollutants, identify
    hurdles to strategies that could cost-effectively reduce emissions of
    multiple pollutants, and make appropriate recommendations.

                      Subtitle D--Carbon Market Assurance

    SEC. 341. CARBON MARKET ASSURANCE.

        (a) Amendment.--The Federal Power Act (16 U.S.C. 791a and
    following) is amended by adding at the end the following:

                       ``PART IV--CARBON MARKET ASSURANCE

    ``SEC. 401. OVERSIGHT AND ASSURANCE OF CARBON MARKETS.

        ``(a) Definitions.--In this section:
                ``(1) Covered entity.--The term `covered entity' shall have
            the meaning given in section 700 of the Clean Air Act.
                ``(2) Regulated allowance.--The term `regulated allowance'
            means any emission allowance, compensatory allowance, offset
            credit, or Federal renewable electricity credit established or
            issued under the American Clean Energy and Security Act of
            2009.
                ``(3) Regulated instrument.--The term `regulated
            instrument' means a regulated allowance or a regulated
            allowance derivative.
        ``(b) Regulated Allowance Market.--
                ``(1) Authority.--The Commission shall promulgate
            regulations for the establishment, operation, and oversight of
            markets for regulated allowances not later than 18 months after
            the date of the enactment of this section, and from time to
            time thereafter as may be appropriate.
                ``(2) Regulations.--The regulations promulgated pursuant to
            paragraph (1) shall--
                        ``(A) provide for effective and comprehensive
                    market oversight;
                        ``(B) prohibit fraud, market manipulation, and
                    excess speculation, and provide measures to limit
                    unreasonable fluctuation in the prices of regulated
                    allowances;
                        ``(C) facilitate compliance with title VII of the
                    Clean Air Act by covered entities;
                        ``(D) ensure market transparency and recordkeeping
                    deemed necessary and appropriate by the Commission to
                    provide for efficient price discovery; prevention of
                    fraud, market manipulation, and excess speculation; and
                    compliance with title VII of the Clean Air Act and
                    section 610 of the Public Utility Regulatory Policies
                    Act of 1978;
                        ``(E) as necessary, ensure that position
                    limitations for individual market participants are
                    established with respect to each class of regulated
                    allowances;
                        ``(F) as necessary, ensure that margin requirements
                    are established for each class of regulated allowances;
                        ``(G) provide for the formation and operation of a
                    fair, orderly and liquid national market system that
                    allows for the best execution in the trading of
                    regulated allowances;
                        ``(H) limit or eliminate counterparty risks, market
                    power concentration risks, and other risks associated
                    with trading regulated allowances outside of trading
                    facilities; and
                        ``(I) establish standards for qualification as, and
                    operation of, trading facilities for regulated
                    allowances;
                        ``(J) establish standards for qualification as, and
                    operation of, clearing organizations for trading
                    facilities for regulated allowances; and
                        ``(K) include such other requirements as necessary
                    to preserve market integrity and facilitate compliance
                    with title VII of the Clean Air Act and section 610 of
                    the Public Utility Regulatory Policies Act of 1978 and
                    the regulations promulgated under such title and such
                    section.
                ``(3) Enforcement.--
                        ``(A) In general.--If the Commission determines,
                    after notice and an opportunity for a hearing on the
                    record, that any entity has violated any rule or order
                    issued by the Commission under this subsection, the
                    Commission may issue an order--
                                ``(i) prohibiting the entity from trading
                            on a trading facility for regulated allowances
                            registered with the Commission, and requiring
                            all such facilities to refuse the entity all
                            privileges for such period as may be specified
                            in the order;
                                ``(ii) if the entity is registered with the
                            Commission in any capacity, suspending for a
                            period of not more than 6 months, or revoking,
                            the registration of the entity;
                                ``(iii) assessing the entity a civil
                            penalty of not more than $1,000,000 per day per
                            violation for as long as the violation
                            continues (and in determining the amount of a
                            civil penalty, the Commission shall take into
                            account the nature and seriousness of the
                            violation and the efforts to remedy the
                            violation); and
                                ``(iv) requiring disgorgement of unjust
                            profits, restitution to entities harmed by the
                            violation as determined by the Commission, or
                            both.
                        ``(B) Authority to suspend or revoke
                    registration.--The Commission may suspend for a period
                    of not more than 6 months, or revoke, the registration
                    of a trading facility for regulated allowances or of a
                    clearing organization registered by the Commission if,
                    after notice and opportunity for a hearing on the
                    record, the Commission finds that--
                                ``(i) the entity violated any rule or order
                            issued by the Commission under this subsection;
                            or
                                ``(ii) a director, officer, employee, or
                            agent of the entity has violated any rule or
                            order issued by the Commission under this
                            subsection.
                        ``(C) Cease and desist proceedings.--
                                ``(i) In general.--If the Commission
                            determines that any entity may be violating,
                            may have violated, or may be about to violate
                            any provision of this part, or any regulation
                            promulgated by, or any restriction, condition,
                            or order made or imposed by, the Commission
                            under this Act, and if the Commission finds
                            that the alleged violation or threatened
                            violation, or the continuation of the
                            violation, is likely to result in significant
                            harm to covered entities or market
                            participants, or significant harm to the public
                            interest, the Commission may issue a temporary
                            order requiring the entity--
                                        ``(I) to cease and desist from the
                                    violation or threatened violation;
                                        ``(II) to take such action as is
                                    necessary to prevent the violation or
                                    threatened violation; and
                                        ``(III) to prevent, as the
                                    Commission determines to be
                                    appropriate--
                                                ``(aa) significant harm to
                                            covered entities or market
                                            participants;
                                                ``(bb) significant harm to
                                            the public interest; and
                                                ``(cc) frustration of the
                                            ability of the Commission to
                                            conduct the proceedings or to
                                            redress the violation at the
                                            conclusion of the proceedings.
                                ``(ii) Timing of entry.--An order issued
                            under clause (i) shall be entered only after
                            notice and opportunity for a hearing, unless
                            the Commission determines that notice and
                            hearing before entry would be impracticable or
                            contrary to the public interest.
                                ``(iii) Effective date.--A temporary order
                            issued under clause (i) shall--
                                        ``(I) become effective upon service
                                    upon the entity; and
                                        ``(II) unless set aside, limited,
                                    or suspended by the Commission or a
                                    court of competent jurisdiction, remain
                                    effective and enforceable pending the
                                    completion of the proceedings.
                        ``(D) Proceedings regarding dissipation or
                    conversion of assets.--
                                ``(i) In general.--In a proceeding
                            involving an alleged violation of a regulation
                            or order promulgated or issued by the
                            Commission, if the Commission determines that
                            the alleged violation or related circumstances
                            are likely to result in significant dissipation
                            or conversion of assets, the Commission may
                            issue a temporary order requiring the
                            respondent to take such action as is necessary
                            to prevent the dissipation or conversion of
                            assets.
                                ``(ii) Timing of entry.--An order issued
                            under clause (i) shall be entered only after
                            notice and opportunity for a hearing, unless
                            the Commission determines that notice and
                            hearing before entry would be impracticable or
                            contrary to the public interest.
                                ``(iii) Effective date.--A temporary order
                            issued under clause (i) shall--
                                        ``(I) become effective upon service
                                    upon the respondent; and
                                        ``(II) unless set aside, limited,
                                    or suspended by the Commission or a
                                    court of competent jurisdiction, remain
                                    effective and enforceable pending the
                                    completion of the proceedings.
                        ``(E) Review of temporary orders.--
                                ``(i) Application for review.--At any time
                            after a respondent has been served with a
                            temporary cease-and-desist order pursuant to
                            subparagraph (C) or order regarding the
                            dissipation or conversion of assets pursuant to
                            subparagraph (D), the respondent may apply to
                            the Commission to have the order set aside,
                            limited, or suspended.
                                ``(ii) No prior hearing.--If a respondent
                            has been served with a temporary order entered
                            without a prior hearing of the Commission--
                                        ``(I) the respondent may, not later
                                    than 10 days after the date on which
                                    the order was served, request a hearing
                                    on the application; and
                                        ``(II) the Commission shall hold a
                                    hearing and render a decision on the
                                    application at the earliest practicable
                                    time.
                                ``(iii) Judicial review.--
                                        ``(I) In general.--An entity shall
                                    not be required to submit a request for
                                    rehearing of a temporary order before
                                    seeking judicial review in accordance
                                    with this subparagraph.
                                        ``(II) Timing of review.--Not later
                                    than 10 days after the date on which a
                                    respondent is served with a temporary
                                    cease-and-desist order entered with a
                                    prior hearing of the Commission, or 10
                                    days after the date on which the
                                    Commission renders a decision on an
                                    application and hearing under clause
                                    (i) with respect to any temporary order
                                    entered without such a prior hearing--
                                                ``(aa) the respondent may
                                            obtain a review of the order in
                                            a United States circuit court
                                            having jurisdiction over the
                                            circuit in which the respondent
                                            resides or has a principal
                                            place of business, or in the
                                            United States Court of Appeals
                                            for the District of Columbia
                                            Circuit, for an order setting
                                            aside, limiting, or suspending
                                            the effectiveness or
                                            enforcement of the order; and
                                                ``(bb) the court shall have
                                            jurisdiction to enter such an
                                            order.
                                        ``(III) No prior hearing.--A
                                    respondent served with a temporary
                                    order entered without a prior hearing
                                    of the Commission may not apply to the
                                    applicable court described in subclause
                                    (II) except after a hearing and
                                    decision by the Commission on the
                                    application of the respondent under
                                    clauses (i) and (ii).
                                ``(iv) Procedures.--Section 222 and Part
                            III shall apply to--
                                        ``(I) an application for review of
                                    an order under clause (i); and
                                        ``(II) an order subject to review
                                    under clause (iii).
                                ``(v) No automatic stay of temporary
                            order.--The commencement of proceedings under
                            clause (iii) shall not, unless specifically
                            ordered by the court, operate as a stay of the
                            order of the Commission.
                        ``(F) Actions to collect civil penalties.--If any
                    person fails to pay a civil penalty assessed under this
                    subsection after an order assessing the penalty has
                    become final and unappealable, the Commission shall
                    bring an action to recover the amount of the penalty in
                    any appropriate United States district court.
                ``(4) Transaction fees.--
                        ``(A) In general.--The Commission shall, in
                    accordance with this paragraph, establish and collect
                    transaction fees designed to recover the costs to the
                    Federal Government of the supervision and regulation of
                    regulated allowance markets and market participants,
                    including related costs for enforcement activities,
                    policy and rulemaking activities, administration, legal
                    services, and international regulatory activities.
                        ``(B) Initial fee rate.--Each trading facility on
                    or through which regulated allowances are transacted
                    shall pay to the Commission a fee at a rate of not more
                    than $15 per $1,000,000 of the aggregate dollar amount
                    of sales of regulated allowances transacted through the
                    facility.
                        ``(C) Annual adjustment of fee rate.--The
                    Commission shall, on an annual basis--
                                ``(i) assess the rate at which fees are to
                            be collected as necessary to meet the cost
                            recovery requirement in subparagraph (A); and
                                ``(ii) consistent with subparagraph (B),
                            adjust the rate as necessary in order to meet
                            the requirement.
                        ``(D) Report on adequacy of fees in recovering
                    costs.--The Commission, shall, on an annual basis,
                    report to the Committee on Energy and Commerce of the
                    House of Representatives and the Committee on Energy
                    and Natural Resources of the Senate on the adequacy of
                    the transaction fees in providing funding for the
                    Commission to regulate the regulated allowance markets.
                ``(5) Judicial review.--Judicial review of actions taken by
            the Commission under this subsection shall be pursuant to part
            III.
                ``(6) Additional employees report and appointment.--Within
            18 months after the date of the enactment of this section, the
            Commission shall submit to the President, the Committee on
            Energy and Commerce of the House of Representatives, and the
            Committee on Energy and Natural Resources of the Senate, a
            report that contains recommendations as to how many additional
            employees would be necessary to provide robust oversight and
            enforcement of the regulations promulgated under this
            subsection. As soon as practicable after the completion of the
            report, subject to appropriations, the Commission shall appoint
            the recommended number of additional employees for such
            purposes.
        ``(c) Working Group.--
                ``(1) Establishment.--Not later than 30 days after the date
            of the enactment of this section, the President shall establish
            an interagency working group on carbon market oversight, which
            shall include the Administrator of the Environmental Protection
            Agency and representatives of other relevant agencies, to make
            recommendations to the Commodity Futures Trading Commission
            regarding proposed regulations for the establishment,
            operation, and oversight of markets for regulated allowance
            derivatives.
                ``(2) Report.--Not later than 180 days after the date of
            the enactment of this section, and biennially thereafter, the
            interagency working group shall submit a written report to the
            President and Congress that includes its recommendations to the
            Commodity Futures Trading Commission regarding proposed
            regulations for the establishment, operation, and oversight of
            markets for regulated allowance derivatives and any
            recommendations to Congress for statutory changes needed to
            ensure the establishment, operation, and oversight of
            transparent, fair, stable, and efficient markets for regulated
            allowance derivatives.
        ``(d) Penalty for Fraud and False or Misleading Statements.--A
    person convicted under section 1041 of title 18, United States Code,
    may be prohibited from holding or trading regulated allowances for a
    period of not more than 5 years pursuant to the regulations promulgated
    under this section, except that, if the person is a covered entity, the
    person shall be allowed to hold sufficient regulated allowances to meet
    its compliance obligations.
        ``(e) Relation to State Law.--Nothing in this section shall
    preclude, diminish or qualify any authority of a State or political
    subdivision thereof to adopt or enforce any unfair competition,
    antitrust, consumer protection, securities, commodities or any other
    law or regulation, except that no such State law or regulation may
    relieve any person of any requirement otherwise applicable under this
    section.
        ``(f) Market Reports.--
                ``(1) Collection and analysis of information.--The
            Commission, in conjunction with the Commodity Futures Trading
            Commission, shall, on a continuous basis, analyze the following
            information on the functioning of the markets for regulated
            instruments established under this part:
                        ``(A) The status of, and trends in, the markets,
                    including prices, trading volumes, transaction types,
                    and trading channels and mechanisms.
                        ``(B) Spikes, collapses, and volatility in prices
                    of regulated instruments, and the causes therefor.
                        ``(C) The relationship between the market for
                    regulated allowances and allowance derivatives, and the
                    spot and futures markets for energy commodities,
                    including electricity.
                        ``(D) The economic effects of the markets,
                    including to macro- and micro-economic effects of
                    unexpected significant increases and decreases in the
                    price of regulated instruments.
                        ``(E) Any changes in the roles, activities, or
                    strategies of various market participants.
                        ``(F) Regional, industrial, and consumer responses
                    to the markets, and energy investment responses to the
                    markets.
                        ``(G) Any other issue related to the markets that
                    the Commission, and the Commodity Futures Trading
                    Commission deem appropriate.
                ``(2) Annual reports to the congress.-- Not later than 1
            month after the end of each calendar year, the Commission, in
            conjunction with the Commodity Futures Trading Commission,
            shall submit to the President, the Committee on Agriculture and
            Committee on Energy and Commerce of the House of
            Representatives, and the Committee on Agriculture, Nutrition,
            and Forestry and Committee on Energy and Natural Resources of
            the Senate, and make available to the public, a report on the
            matters described in paragraph (1) with respect to the year,
            including recommendations for any administrative or statutory
            measures the Commission and the Commodity Futures Trading
            Commission consider necessary to address any threats to the
            transparency, fairness, or integrity of the markets in
            regulated instruments.

    ``SEC. 402. APPLICABILITY OF PART III PROVISIONS.

        ``(a) Sections 301, 304, and 306.--Sections 301, 304, and 306 shall
    not apply to this part.
        ``(b) Section 315.--In applying section 315(a) to this part, the
    words `person or entity' shall be substituted for the words `licensee
    or public utility'. In applying section 315(b) to this part, the words
    `an entity' shall be substituted for the words `a licensee or public
    utility' and the words `such entity' shall be substituted for the words
    `such licensee or public utility'.
        ``(c) Section 316.--Section 316(a) shall not apply to section
    401(d).''.
        (b) Criminal Prohibition Against Fraud and False or Misleading
    Statements.--
                (1) Chapter 47 of title 18, United States Code, is amended
            by adding at the end the following:
    ``Sec. 1041. Fraud and false statements in connection with regulated
                  allowances
        ``Whoever in connection with a transaction involving a regulated
    allowance (as defined in section 401(a) of the Federal Power Act, as
    added by section 341 of the American Clean Energy and Security Act of
    2009), knowingly--
                ``(1) makes or uses a materially false or misleading
            statement, writing, representation, scheme, or device; or
                ``(2) falsifies, conceals, or covers up by any trick,
            scheme, or device any material fact,
    shall be fined not more than $5,000,000 (or $25,000,000 in the case of
    an organization) or imprisoned not more than 20 years, or both.''.
                (2) The table of sections at the beginning of chapter 47 of
            title 18, United States Code, is amended by adding at the end
            the following new item:

    ``1041. Fraud and false statements in connection with regulated
                                allowances.''.

    SEC. 342. CARBON DERIVATIVE MARKETS.

        (a) Section 1a(14) of the Commodity Exchange Act (7 U.S.C. 1a(14))
    is amended by striking ``or an agricultural commodity'' and inserting
    ``, an agricultural commodity, or any emission allowance, compensatory
    allowance, offset credit, or Federal renewable electricity credit
    established or issued under the American Clean Energy and Security Act
    of 2009''.
        (b) Section 4(c) of such Act (7 U.S.C. 6(c)) is amended by adding
    at the end the following:
                ``(6) This subsection does not apply to any agreement,
            contract, or transaction for any emission allowance,
            compensatory allowance, offset credit, or Federal renewable
            electricity credit established or issued under the American
            Clean Energy and Security Act of 2009.''.

                    Subtitle E--Additional Market Assurance

    SEC. 351. REGULATION OF CERTAIN TRANSACTIONS IN DERIVATIVES INVOLVING
                  ENERGY COMMODITIES.

        (a) Energy Commodity Defined.--Section 1a of the Commodity Exchange
    Act (7 U.S.C. 1a) is amended--
                (1) in paragraph (14), by inserting ``, an energy
            commodity,'' after ``excluded commodity'';
                (2) by redesignating paragraphs (13) through (21) and
            paragraphs (22) through (34) as paragraphs (14) through (22)
            and paragraphs (24) through (36), respectively;
                (3) by inserting after paragraph (12) the following:
                ``(13) Energy commodity.--The term `energy commodity'
            means--
                        ``(A) coal;
                        ``(B) crude oil, gasoline, diesel fuel, jet fuel,
                    heating oil, and propane;
                        ``(C) electricity (excluding financial transmission
                    rights which are subject to regulation and oversight by
                    the Federal Energy Regulatory Commission);
                        ``(D) natural gas; and
                        ``(E) any other substance (other than an excluded
                    commodity, a metal, or an agricultural commodity) that
                    is used as a source of energy, as the Commission, in
                    its discretion, deems appropriate.''; and
                (4) by inserting after paragraph (22) (as so redesignated
            by paragraph (2) of this subsection) the following:
                ``(23) Included energy transaction.--The term `included
            energy transaction' means a contract, agreement, or transaction
            in an energy commodity for future delivery that provides for a
            delivery point of the energy commodity in the United States or
            a territory or possession of the United States, or that is
            offered or transacted on or through a computer terminal located
            in the United States.''.
        (b) Extension of Regulatory Authority to Swaps Involving Energy
    Transactions.--Section 2(g) of such Act (7 U.S.C. 2(g)) is amended by
    inserting ``or an energy commodity'' after ``agricultural commodity''.
        (c) Elimination of Exemption for Over-the-counter Swaps Involving
    Energy Commodities.--Section 2(h)(1) of such Act (7 U.S.C. 2(h)(1)) is
    amended by inserting ``(other than an energy commodity)'' after
    ``exempt commodity''.
        (d) Extension of Regulatory Authority to Included Energy
    Transactions on Foreign Boards of Trade.--Section 4 of such Act (7
    U.S.C. 6) is amended--
                (1) in subsection (a), by inserting ``, and which is not an
            included energy transaction'' after ``territories or
            possessions'' the 2nd place it appears; and
                (2) in subsection (b), by adding at the end the following:
            ``The preceding sentence shall not apply with respect to
            included energy transactions.''.
        (e) Limitation of General Exemptive Authority of the CFTC With
    Respect to Included Energy Transactions.--
                (1) In general.--Section 4(c) of such Act (7 U.S.C. 6(c))
            is amended by adding at the end the following:
        ``(6) The Commission may not exempt any included energy transaction
    from the requirements of subsection (a), unless the Commission provides
    60 days advance notice to the Congress and the Position Limit Energy
    Advisory Group and solicits public comment about the exemption request
    and any proposed Commission action.''.
                (2) Nullification of no-action letter exemptions to certain
            requirements applicable to included energy transactions.--
            Beginning 180 days after the date of the enactment of this Act,
            any exemption provided by the Commodity Futures Trading
            Commission that has allowed included energy transactions (as
            defined in section 1a(13) of the Commodity Exchange Act) to be
            conducted without regard to the requirements of section 4(a) of
            such Act shall be null and void.
        (f) Requirement to Establish Uniform Speculative Position Limits
    for Energy Transactions.--
                (1) In general.--Section 4a(a) of such Act (7 U.S.C. 6a(a))
            is amended--
                        (A) by inserting ``(1)'' after ``(a)'';
                        (B) by inserting after the 2nd sentence the
                    following: ``With respect to energy transactions, the
                    Commission shall fix limits on the aggregate number of
                    positions which may be held by any person for each
                    month across all markets subject to the jurisdiction of
                    the Commission.'';
                        (C) in the 4th sentence by inserting ``, consistent
                    with the 3rd sentence,'' after ``Commission''; and
                        (D) by adding after and below the end the
                    following:
        ``(2)(A) Not later than 60 days after the date of the enactment of
    this paragraph, the Commission shall convene a Position Limit Energy
    Advisory Group consisting of representatives from--
                ``(i) 7 predominantly commercial short hedgers of the
            actual energy commodity for future delivery;
                ``(ii) 7 predominantly commercial long hedgers of the
            actual energy commodity for future delivery;
                ``(iii) 4 non-commercial participants in markets for energy
            commodities for future delivery; and
                ``(iv) each designated contract market or derivatives
            transaction execution facility upon which a contract in the
            energy commodity for future delivery is traded, and each
            electronic trading facility that has a significant price
            discovery contract in the energy commodity.
        ``(B) Not later than 60 days after the date on which the advisory
    group is convened under subparagraph (A), and annually thereafter, the
    advisory group shall submit to the Commission advisory recommendations
    regarding the position limits to be established in paragraph (1).
        ``(C) The Commission shall have exclusive authority to grant
    exemptions for bona fide hedging transactions and positions from
    position limits imposed under this Act on energy transactions.''.
                (2) Conforming amendments.--
                        (A) Significant price discovery contracts.--Section
                    2(h)(7) of such Act (7 U.S.C. 2(h)(7)) is amended--
                                (i) in subparagraph (A)--
                                        (I) by inserting ``of this
                                    paragraph and section 4a(a)'' after
                                    ``(B) through (D)''; and
                                        (II) by inserting ``of this
                                    paragraph'' before the period; and
                                (ii) in subparagraph (C)(ii)(IV)--
                                        (I) in the heading, by striking
                                    ``limitations or''; and
                                        (II) by striking ``position
                                    limitations or''.
                        (B) Contracts traded on or through designated
                    contract markets.--Section 5(d)(5) of such Act (7
                    U.S.C. 7(d)(5)) is amended--
                                (i) in the heading by striking
                            ``limitations or''; and
                                (ii) by striking ``position limitations
                            or''.
                        (C) Contracts traded on or through derivatives
                    transaction execution facilities.--Section 5a(d)(4) of
                    such Act (7 U.S.C. 7a(d)(4)) is amended--
                                (i) in the heading by striking
                            ``limitations or''; and
                                (ii) by striking ``position limits or''.
        (g) Elimination of the Swaps Loophole.--Section 4a(c) of such Act
    (7 U.S.C. 6a(c)) is amended--
                (1) by inserting ``(1)'' after ``(c)''; and
                (2) by adding after and below the end the following:
        ``(2) For the purposes of contracts of sale for future delivery and
    options on such contracts or commodities, the Commission shall define
    what constitutes a bona fide hedging transaction or position as a
    transaction or position that--
                ``(A)(i) represents a substitute for transactions made or
            to be made or positions taken or to be taken at a later time in
            a physical marketing channel;
                ``(ii) is economically appropriate to the reduction of
            risks in the conduct and management of a commercial enterprise;
            and
                ``(iii) arises from the potential change in the value of--
                        ``(I) assets that a person owns, produces,
                    manufactures, processes, or merchandises or anticipates
                    owning, producing, manufacturing, processing, or
                    merchandising;
                        ``(II) liabilities that a person owns or
                    anticipates incurring; or
                        ``(III) services that a person provides, purchases,
                    or anticipates providing or purchasing; or
                ``(B) reduces risks attendant to a position resulting from
            a transaction that--
                        ``(i) was executed pursuant to subsection (d), (g),
                    (h)(1), or (h)(2) of section 2, or an exemption issued
                    by the Commission by rule, regulation or order; and
                        ``(ii) was executed opposite a counterparty for
                    which the transaction would qualify as a bona fide
                    hedging transaction pursuant to paragraph (2)(A) of
                    this subsection.''.
        (h) Detailed Reporting and Disaggregation of Market Data.--Section
    4 of such Act (7 U.S.C. 6) is amended by adding at the end the
    following:
        ``(e) Detailed Reporting and Disaggregation of Market Data.--
                ``(1) Index traders and swap dealers reporting.--The
            Commission shall issue a proposed rule defining and classifying
            index traders and swap dealers (as those terms are defined by
            the Commission) for purposes of data reporting requirements and
            setting routine detailed reporting requirements for any
            positions of such entities in contracts traded on designated
            contract markets, over-the-counter markets, derivatives
            transaction execution facilities, foreign boards of trade
            subject to section 4(f), and electronic trading facilities with
            respect to significant price discovery contracts not later than
            120 days after the date of the enactment of this subsection,
            and issue a final rule within 180 days after such date of
            enactment.
                ``(2) Disaggregation of index funds and other data in
            markets.--Subject to section 8 and beginning within 60 days of
            the issuance of the final rule required by paragraph (1), the
            Commission shall disaggregate and make public weekly--
                        ``(A) the number of positions and total notional
                    value of index funds and other passive, long-only and
                    short-only positions (as defined by the Commission) in
                    all markets to the extent such information is
                    available; and
                        ``(B) data on speculative positions relative to
                    bona fide physical hedgers in those markets to the
                    extent such information is available.
                ``(3) Disclosure of identity of holders of positions in
            indexes in excess of position limits.--The Commission shall
            include in its weekly Commitment of Trader reports the identity
            of each person who holds a position in an index in excess of a
            limit imposed under section 4i.''.
        (i) Authority to Set Limits to Prevent Excessive Speculation in
    Indexes.--
                (1) In general.--Section 4a of such Act (7 U.S.C. 6a) is
            amended by adding at the end the following:
        ``(f) The provisions of this section shall apply to the amounts of
    trading which may be done or positions which may be held by any person
    under contracts of sale of an index for future delivery on or subject
    to the rules of any contract market, derivatives transaction execution
    facility, or over-the-counter market, or on an electronic trading
    facility with respect to a significant price discovery contract, in the
    same manner in which this section applies to contracts of sale of a
    commodity for future delivery.''.
                (2) Regulations.--The Commodity Futures Trading Commission
            shall issue regulations under section 4a(f) of the Commodity
            Exchange Act within 180 days after the date of the enactment of
            this Act.

    SEC. 352. NO EFFECT ON AUTHORITY OF THE FEDERAL ENERGY REGULATORY
                  COMMISSION.

        Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by
    adding at the end the following:
        ``(j) This Act shall not be interpreted to affect the jurisdiction
    of the Federal Energy Regulatory Commission with respect to the
    authority of the Federal Energy Regulatory Commission under the Federal
    Power Act (16 U.S.C. 791a et seq.), the Natural Gas Act (15 U.S.C. 717
    et seq.), or other law to obtain information, carry out enforcement
    actions, or otherwise carry out the responsibilities of the Federal
    Energy Regulatory Commission.''.

    SEC. 353. INSPECTOR GENERAL OF THE COMMODITY FUTURES TRADING
                  COMMISSION.

        (a) Elevation of Office.--
                (1) Inclusion of cftc in definition of establishment.--
                        (A) Section 12(1) of the Inspector General Act of
                    1978 (5 U.S.C. App.) is amended by striking ``or the
                    Federal Cochairpersons of the Commissions established
                    under section 15301 of title 40, United States Code;''
                    and inserting ``the Federal Cochairpersons of the
                    Commissions established under section 15301 of title
                    40, United States Code; or the Chairman of the
                    Commodity Futures Trading Commission;''.
                        (B) Section 12(2) of the Inspector General Act of
                    1978 (5 U.S.C. App.) is amended by striking ``or the
                    Commissions established under section 15301 of title
                    40, United States Code,'' and inserting ``the
                    Commissions established under section 15301 of title
                    40, United States Code, or the Commodity Futures
                    Trading Commission,''.
                (2) Exclusion of cftc from definition of designated federal
            entity.--Section 8G(a)(2) of the Inspector General Act of 1978
            (5 U.S.C. App.) is amended by striking ``the Commodity Futures
            Trading Commission,''.
        (b) Provisions Relating to Pay and Personnel Authority.--
                (1) Provision relating to the position of inspector general
            of the cftc.--In the case of the Inspector General of the
            Commodities Futures Trading Commission, subsections (b) and (c)
            of section 4 of the Inspector General Reform Act of 2008
            (Public Law 110-409) shall apply in the same manner as if the
            Commission was a designated Federal entity under section 8G.
            The Inspector General of the Commodities Futures Trading
            Commission shall not be subject to section 3(e) of such Act.
                (2) Provision relating to other personnel.--Notwithstanding
            paragraphs (7) and (8) of section 6(a) of the Inspector General
            Act of 1978 (5 U.S.C. App.), the Inspector General of the
            Commodities Futures Trading Commission may select, appoint, and
            employ such officers and employees as may be necessary for
            carrying out the functions, powers, and duties of the Office of
            Inspector General and to obtain the temporary or intermittent
            services of experts or consultants or an organization of
            experts or consultants, subject to the applicable laws and
            regulations that govern such selections, appointments, and
            employment, and the obtaining of such services, within the
            Commodities Futures Trading Commission.
        (c) Effective Date; Transition Rule.--
                (1) Effective date.--The amendments made by this section
            shall take effect 30 days after the date of the enactment of
            this Act.
                (2) Transition rule.--An individual serving as Inspector
            General of the Commodity Futures Trading Commission on the
            effective date of this section pursuant to an appointment made
            under section 8G of the Inspector General Act of 1978 (5 U.S.C.
            App.)--
                        (A) may continue so serving until the President
                    makes an appointment under section 3(a) of such Act
                    consistent with the amendments made by this section;
                    and
                        (B) shall, while serving under subparagraph (A),
                    remain subject to the provisions of section 8G of such
                    Act which apply with respect to the Commodity Futures
                    Trading Commission.

    SEC. 354. SETTLEMENT AND CLEARING THROUGH REGISTERED DERIVATIVES
                  CLEARING ORGANIZATIONS.

        (a) In General.--
                (1) Application to excluded derivative transactions.--
                        (A) Section 2(d)(1) of the Commodity Exchange Act
                    (7 U.S.C. 2(d)(1)) is amended--
                                (i) by striking ``and'' at the end of
                            subparagraph (A);
                                (ii) by striking the period at the end of
                            subparagraph (B) and inserting ``; and''; and
                                (iii) by adding at the end the following:
                        ``(C) except as provided in section 4(f), the
                    agreement, contract, or transaction is settled and
                    cleared through a derivatives clearing organization
                    registered with the Commission.''.
                        (B) Section 2(d)(2) of such Act (7 U.S.C. 2(d)(2))
                    is amended--
                                (i) by striking ``and'' at the end of
                            subparagraph (B);
                                (ii) by striking the period at the end of
                            subparagraph (C) and inserting ``; and''; and
                                (iii) by adding at the end the following:
                        ``(D) except as provided in section 4(f), the
                    agreement, contract, or transaction is settled and
                    cleared through a derivatives clearing organization
                    registered with the Commission.''.
                (2) Application to certain swap transactions.--Section 2(g)
            of such Act (7 U.S.C. 2(g)) is amended--
                        (A) by striking ``and'' at the end of paragraph
                    (2);
                        (B) by striking the period at the end of paragraph
                    (3) and inserting ``; and''; and
                        (C) by adding at the end the following:
                ``(4) except as provided in section 4(f), settled and
            cleared through a derivatives clearing organization registered
            with the Commission.''.
                (3) Application to certain transactions in exempt
            commodities.--
                        (A) Section 2(h)(1) of such Act ( 7 U.S.C. 2(h)(1))
                    is amended--
                                (i) by striking ``and'' at the end of
                            subparagraph (A);
                                (ii) by striking the period at the end of
                            subparagraph (B) and inserting ``; and''; and
                                (iii) by adding at the end the following:
                        ``(C) except as provided in section 4(f), is
                    settled and cleared through a derivatives clearing
                    organization registered with the Commission.''.
                        (B) Section 2(h)(3) of such Act (7 U.S.C. 2(h)(3))
                    is amended--
                                (i) by striking ``and'' at the end of
                            subparagraph (A);
                                (ii) by striking the period at the end of
                            subparagraph (B) and inserting ``; and''; and
                                (iii) by adding at the end the following:
                        ``(C) except as provided in section 4(f), settled
                    and cleared through a derivatives clearing organization
                    registered with the Commission.''.
                (4) General exemptive authority.--Section 4(c)(1) of such
            Act (7 U.S.C. 6(c)(1)) is amended by inserting ``the agreement,
            contract, or transaction, except as provided in section 4(h),
            will be settled and cleared through a derivatives clearing
            organization registered with the Commission and'' before ``the
            Commission determines''.
                (5) Conforming amendment relating to significant price
            discovery contracts.--Section 2(h)(7)(D) of such Act (7 U.S.C.
            2(h)(7)(D)) is amended by striking the designation and heading
            for the subparagraph and all that follows through ``As part
            of'' and inserting the following:
                        ``(D) Review of implementation.--As part of''.
        (b) Alternatives to Clearing Through Designated Clearing
    Organizations.--Section 4 of such Act (7 U.S.C. 6), as amended by
    section 351(h) of this Act, is amended by adding at the end the
    following:
        ``(f) Alternatives to Clearing Through Designated Clearing
    Organizations.--
                ``(1) Settlement and clearing through certain other
            regulated entities.--An agreement, contract, or transaction, or
            class thereof, relating to an excluded commodity, that would
            otherwise be required to be settled and cleared by section
            2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or 2(h)(3)(C) of
            this Act, or subsection (c)(1) of this section may be settled
            and cleared through an entity listed in subsections (a) or (b)
            of section 409 of the Federal Deposit Insurance Corporation
            Improvement Act of 1991.
                ``(2) Waiver of clearing requirement.--
                        ``(A) The Commission, in its discretion, may exempt
                    an agreement, contract, or transaction, or class
                    thereof, that would otherwise be required by section
                    2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C), or
                    2(h)(3)(C) of this Act, or subsection (c)(1) of this
                    section to be settled and cleared through a derivatives
                    clearing organization registered with the Commission
                    from such requirement.
                        ``(B) In granting exemptions pursuant to
                    subparagraph (A), the Commission shall consult with the
                    Securities and Exchange Commission and the Board of
                    Governors of the Federal Reserve System regarding
                    exemptions that relate to excluded commodities or
                    entities for which the Securities Exchange Commission
                    or the Board of Governors of the Federal Reserve System
                    serve as the primary regulator.
                        ``(C) Before granting an exemption pursuant to
                    subparagraph (A), the Commission shall find that the
                    agreement, contract, or transaction, or class thereof--
                                ``(i) is highly customized as to its
                            material terms and conditions;
                                ``(ii) is transacted infrequently;
                                ``(iii) does not serve a significant price-
                            discovery function in the marketplace; and
                                ``(iv) is being entered into by parties who
                            can demonstrate the financial integrity of the
                            agreement, contract, or transaction and their
                            own financial integrity, as such terms and
                            standards are determined by the Commission. The
                            standards may include, with respect to any
                            federally regulated financial entity for which
                            net capital requirements are imposed, a net
                            capital requirement associated with any
                            agreement, contract, or transaction subject to
                            an exemption from the clearing requirement that
                            is higher than the net capital requirement that
                            would be associated with such a transaction
                            were it cleared.
                        ``(D) Any agreement, contract, or transaction, or
                    class thereof, which is exempted pursuant to
                    subparagraph (A) shall be reported to the Commission in
                    a manner designated by the Commission, or to such other
                    entity the Commission deems appropriate.
                        ``(E) The Commission, the Securities and Exchange
                    Commission and the Board of Governors of the Federal
                    Reserve System shall enter into a memorandum of
                    understanding by which the information reported to the
                    Commission pursuant to subparagraph (D) with regard to
                    excluded commodities or entities for which the
                    Securities Exchange Commission or the Board of
                    Governors of the Federal Reserve System serve as the
                    primary regulator may be provided to the other
                    agencies.
        ``(g) Spot and Forward Exclusion.--The settlement and clearing
    requirements of section 2(d)(1)(C), 2(d)(2)(D), 2(g)(4), 2(h)(1)(C),
    2(h)(3)(C), or 4(c)(1) shall not apply to an agreement, contract, or
    transaction of any cash commodity for immediate or deferred shipment or
    delivery, as defined by the Commission.''.
        (c) Additional Requirements Applicable to Applicants for
    Registration as a Derivative Clearing Organization.--Section 5b(c)(2)
    of such Act (7 U.S.C. 7a-1(c)(2)) is amended by adding at the end the
    following:
                        ``(O) Disclosure of general information.--The
                    applicant shall disclose publicly and to the Commission
                    information concerning--
                                ``(i) the terms and conditions of
                            contracts, agreements, and transactions cleared
                            and settled by the applicant;
                                ``(ii) the conventions, mechanisms, and
                            practices applicable to the contracts,
                            agreements, and transactions;
                                ``(iii) the margin-setting methodology and
                            the size and composition of the financial
                            resource package of the applicant; and
                                ``(iv) other information relevant to
                            participation in the settlement and clearing
                            activities of the applicant.
                        ``(P) Daily publication of trading information.--
                    The applicant shall make public daily information on
                    settlement prices, volume, and open interest for
                    contracts settled or cleared pursuant to the
                    requirements of section 2(d)(1)(C), 2(d)(2)(D),
                    2(g)(4), 2(h)(1)(C), 2(h)(3)(C) or 4(c)(1) of this Act
                    by the applicant if the Commission determines that the
                    contracts perform a significant price discovery
                    function for transactions in the cash market for the
                    commodity underlying the contracts.
                        ``(Q) Fitness standards.--The applicant shall
                    establish and enforce appropriate fitness standards for
                    directors, members of any disciplinary committee, and
                    members of the applicant, and any other persons with
                    direct access to the settlement or clearing activities
                    of the applicant, including any parties affiliated with
                    any of the persons described in this subparagraph.''.
        (d) Amendments.--
                (1) Section 409 of the Federal Deposit Insurance
            Corporation Improvement Act of 1991 (12 U.S.C. 4422) is amended
            by adding at the end the following:
        ``(c) Clearing Requirement.--A multilateral clearing organization
    described in subsections (a) or (b) of this section shall comply with
    requirements similar to the requirements of sections 5b and 5c of the
    Commodity Exchange Act.''.
                (2) Section 407 of the Legal Certainty for Bank Products
            Act of 2000 (7 U.S.C. 27e) is amended by inserting ``and the
            settlement and clearing requirements of sections 2(d)(1)(C),
            2(d)(2)(D), 2(g)(4), 2(h)(1)(C), 2(h)(3)(C), and 4(c)(1) of
            such Act'' after ``the clearing of covered swap agreements''.
        (e) Effective Date.--The amendments made by this section shall take
    effect 150 days after the date of the enactment of this Act.
        (f) Transition Rule.--Any agreement, contract, or transaction
    entered into before the date of the enactment of this Act or within 150
    days after such date of enactment, in reliance on subsection (d), (g),
    (h)(1), or (h)(3) of section 2 of the Commodity Exchange Act or any
    other exemption issued by the Commission Futures Trading Commission by
    rule, regulation, or order shall, within 90 days after such date of
    enactment, unless settled and cleared through an entity registered with
    the Commission as a derivatives clearing organization or another
    clearing entity pursuant to section 4(f) of such Act, be reported to
    the Commission in a manner designated by the Commission, or to such
    other entity as the Commission deems appropriate.

    SEC. 355. LIMITATION ON ELIGIBILITY TO PURCHASE A CREDIT DEFAULT SWAP.

        (a) In General.--Section 4c of the Commodity Exchange Act (7 U.S.C.
    6c) is amended by adding at the end the following:
        ``(h) Limitation on Eligibility to Purchase a Credit Default
    Swap.--It shall be unlawful for any person to enter into a credit
    default swap unless the person--
                ``(1) owns a credit instrument which is insured by the
            credit default swap;
                ``(2) would experience financial loss if an event that is
            the subject of the credit default swap occurs with respect to
            the credit instrument; and
                ``(3) meets such minimum capital adequacy standards as may
            be established by the Commission, in consultation with the
            Board of Governors of the Federal Reserve System, or such more
            stringent minimum capital adequacy standards as may be
            established by or under the law of any State in which the swap
            is originated or entered into, or in which possession of the
            contract involved takes place.''.
        (b) Elimination of Preemption of State Bucketing Laws Regarding
    Naked Credit Default Swaps.--Section 12(e)(2)(B) of such Act (7 U.S.C.
    16(e)(2)(B)) is amended by inserting ``(other than a credit default
    swap in which the purchaser of the swap would not experience financial
    loss if an event that is the subject of the swap occurred)'' before
    ``that is excluded''.
        (c) Definition of Credit Default Swap.--Section 1a of such Act (7
    U.S.C. 1a), as amended by section 351(a) of this Act, is amended by
    adding at the end the following:
                ``(37) Credit default swap.--The term `credit default swap'
            means a contract which insures a party to the contract against
            the risk that an entity may experience a loss of value as a
            result of an event specified in the contract, such as a default
            or credit downgrade. A credit default swap that is traded on or
            cleared by a registered entity shall be excluded from the
            definition of a security as defined in this Act and in section
            2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of
            the Securities Exchange Act of 1934, except it shall be deemed
            a security solely for purpose of enforcing prohibitions against
            insider trading in sections 10 and 16 of the Securities
            Exchange Act of 1934.''.
        (d) Effective Date.--The amendments made by this section shall be
    effective for credit default swaps (as defined in section 1a(37) of the
    Commodity Exchange Act) entered into after 60 days after the date of
    the enactment of this section.

    SEC. 356. TRANSACTION FEES.

        (a) In General.--Section 12 of the Commodity Exchange Act (7 U.S.C.
    16) is amended by redesignating subsections (e), (f), and (g) as
    subsections (f), (g), and (h), respectively, and inserting after
    subsection (d) the following:
        ``(e) Clearing Fees.--
                ``(1) In general.--The Commission shall, in accordance with
            this subsection, charge and collect from each registered
            clearing organization, and each such organization shall pay to
            the Commission, transaction fees at a rate calculated to
            recover the costs to the Federal Government of the supervision
            and regulation of futures markets, except those directly
            related to enforcement.
                ``(2) Fees assessed per side of cleared contracts.--
                        ``(A) In general.--The Commission shall determine
                    the fee rate referred to in paragraph (1), and shall
                    apply the fee rate per side of any transaction cleared.
                        ``(B) Authority to delegate.-- The Commission may
                    determine the procedures by which the fee rate is to be
                    applied on the transactions subject to the fee, or
                    delegate the authority to make the determination to any
                    appropriate derivatives clearing organization.
                ``(3) Exemptions.--The Commission may not impose a fee
            under paragraph (1) on--
                        ``(A) a class of contracts or transactions if the
                    Commission finds that it is in the public interest to
                    exempt the class from the fee; or
                        ``(B) a contract or transaction cleared by a
                    registered derivatives clearing organization that is--
                                ``(i) subject to fees under section 31 of
                            the Securities Exchange Act of 1934; or
                                ``(ii) a security as defined in the
                            Securities Act of 1933 or the Securities
                            Exchange Act of 1934.
                ``(4) Dates for payment of fees.--The fees imposed under
            paragraph (1) shall be paid on or before--
                        ``(A) March 15 of each year, with respect to
                    transactions occurring on or after the preceding
                    September 1 and on or before the preceding December 31;
                    and
                        ``(B) September 15 of each year, with respect to
                    transactions occurring on or after the preceding
                    January 1 and on or before the preceding August 31.
                ``(5) Annual adjustment of fee rates.--
                        ``(A) In general.--Not later than April 30 of each
                    fiscal year , the Commission shall, by order, adjust
                    each fee rate determined under paragraph (2) for the
                    fiscal year to a uniform adjusted rate that, when
                    applied to the estimated aggregate number of cleared
                    sides of transactions for the fiscal year, is
                    reasonably likely to produce aggregate fee receipts
                    under this subsection for the fiscal year equal to the
                    target offsetting receipt amount for the fiscal year.
                        ``(B) Definitions.--In subparagraph (A):
                                ``(i) Estimated aggregate number of cleared
                            sides of transactions.--The term `estimated
                            aggregate number of cleared sides of
                            transactions' means, with respect to a fiscal
                            year, the aggregate number of cleared sides of
                            transactions to be cleared by registered
                            derivatives clearing organizations during the
                            fiscal year, as estimated by the Commission,
                            after consultation with the Office of
                            Management and Budget, using the methodology
                            required for making projections pursuant to
                            section 257 of the Balanced Budget and
                            Emergency Deficit Control Act of 1985.
                                ``(ii) Target offsetting receipt amount.--
                            The term `target offsetting receipt amount'
                            means, with respect to a fiscal year, the total
                            level of Commission budget authority for all
                            non-enforcement activities of the Commission,
                            as contained in the regular appropriations Acts
                            for the fiscal year.
                        ``(C) No judicial review.--An adjusted fee rate
                    prescribed under subparagraph (A) shall not be subject
                    to judicial review.
                ``(6) Publication.--Not later than April 30 of each fiscal
            year, the Commission shall cause to be published in the Federal
            Register notices of the fee rates applicable under this
            subsection for the succeeding fiscal year, and any estimate or
            projection on which the fee rates are based.
                ``(7) Establishment of futures and options transaction fee
            account; deposit of fees.--There is established in the Treasury
            of the United States an account which shall be known as the
            `Futures and Options Transaction Fee Account'. All fees
            collected under this subsection for a fiscal year shall be
            deposited in the account. Amounts in the account are authorized
            to be appropriated to fund the expenditures of the
            Commission.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to fiscal years beginning 30 or more days after the date of the
    enactment of this Act.
        (c) Transition Rule.--If this section becomes law after March 31
    and before September 1 of a fiscal year, then paragraphs (5)(A) and (6)
    of section 12(e) of the Commodity Exchange Act shall be applied, in the
    case of the 1st fiscal year beginning after the date of the enactment
    of this Act, by substituting ``August 31'' for ``April 30''.

    SEC. 357. NO EFFECT ON ANTITRUST LAW OR AUTHORITY OF THE FEDERAL TRADE
                  COMMISSION.

        (a) Nothing in this subtitle shall be construed to modify, impair,
    or supersede the operation of any of the antitrust laws. For purposes
    of this subsection, the term ``antitrust laws'' has the meaning given
    it in subsection (a) of the 1st section of the Clayton Act (15 U.S.C.
    12(a)), except that such term includes section 5 of the Federal Trade
    Commission Act (15 U.S.C. 45) to the extent that such term applies to
    unfair methods of competition.
        (b) Nothing in this subtitle shall be construed to affect or
    diminish the jurisdiction or authority of the Federal Trade Commission
    with respect to its authorities under the Federal Trade Commission Act
    (15 U.S.C. 41 et seq.) or the Energy Independence and Security Act of
    2007 (Public Law 110-140) to obtain information, to carry out
    enforcement activities, or otherwise to carry out the responsibilities
    of the Federal Trade Commission.

    SEC. 358. EFFECT OF DERIVATIVES REGULATORY REFORM LEGISLATION.

        (a) Statutes.--Upon the passage of legislation that includes
    derivatives regulatory reform, sections 351, 352, 354, 355, 356, and
    357 shall be repealed.
        (b) Regulations.--Upon the passage of legislation that includes
    derivatives regulatory reform, any regulations promulgated under
    section 351, 352, 354, 355, 356, or 357 shall be considered null and
    void.

    SEC. 359. CEASE-AND-DESIST AUTHORITY.

        (a) Natural Gas Act.--Section 20 of the Natural Gas Act (15 U.S.C.
    717s) is amended by adding the following at the end:
        ``(e) Cease-and-desist Proceedings; Temporary Orders; Authority of
    the Commission.--
                ``(1) In general.--If the Commission finds, after notice
            and opportunity for hearing, that any entity may be violating,
            may have violated, or may be about to violate any provision of
            this Act, or any rule, regulation, restriction, condition, or
            order made or imposed by the Commission under the authority of
            this Act, the Commission may publish its findings and issue an
            order requiring such entity, and any other entity that is, was,
            or would be a cause of the violation, due to an act or omission
            the entity knew or should have known would contribute to such
            violation, to cease and desist from committing or causing such
            violation and any future violation of the same provision, rule,
            or regulation. Such order may, in addition to requiring an
            entity to cease and desist from committing or causing a
            violation, require such entity to comply, to provide an
            accounting and disgorgement, or to take steps to effect
            compliance, with such provision, rule, or regulation, upon such
            terms and conditions and within such time as the Commission may
            specify in such order. Any such order may, as the Commission
            deems appropriate, require future compliance or steps to effect
            future compliance, either permanently or for such period of
            time as the Commission may specify.
                ``(2) Timing of entry.--An order issued under this
            subsection shall be entered only after notice and opportunity
            for a hearing, unless the Commission determines that notice and
            hearing prior to entry would be impracticable or contrary to
            the public interest.
        ``(f) Hearing.--The notice instituting proceedings pursuant to
    subsection (e) shall fix a hearing date not earlier than 30 days nor
    later than 60 days after service of the notice unless an earlier or a
    later date is set by the Commission with the consent of any respondent
    so served.
        ``(g) Temporary Order.--Whenever the Commission determines that--
                ``(1) a respondent may take actions to dissipate or convert
            assets prior to the completion of the proceedings referred to
            in subsection (e), and such assets would be necessary to comply
            with or otherwise satisfy a final enforcement order of the
            Commission pursuant to alleged violations or threatened
            violations specified in the notice instituting proceedings; or
                ``(2) a respondent is engaged in actual or threatened
            violations of this Act or a Commission rule, regulation,
            restriction or order referred to in subsection (e),
    the Commission may issue a temporary order requiring the respondent to
    take such action to prevent dissipation or conversion of assets,
    significant harm to energy consumers, or substantial harm to the public
    interest, frustration of the Commission's ability to conduct the
    proceedings, or frustration of the Commission's ability to redress said
    violation at the conclusion of the proceedings, as the Commission deems
    appropriate pending completion of such proceedings.
        ``(h) Review of Temporary Orders.--
                ``(1) Commission review.--At any time after the respondent
            has been served with a temporary cease-and-desist order
            pursuant to subsection (g), the respondent may apply to the
            Commission to have the order set aside, limited, or suspended.
            If the respondent has been served with a temporary cease-and-
            desist order entered without a prior Commission hearing, the
            respondent may, within 10 days after the date on which the
            order was served, request a hearing on such application and the
            Commission shall hold a hearing and render a decision on such
            application at the earliest possible time.
                ``(2) Judicial review.--Within--
                        ``(A) 10 days after the date the respondent was
                    served with a temporary cease-and-desist order entered
                    with a prior Commission hearing; or
                        ``(B) 10 days after the Commission renders a
                    decision on an application and hearing under paragraph
                    (1),
            with respect to any temporary cease-and-desist order entered
            without a prior Commission hearing, the respondent may apply to
            the United States circuit court having jurisdiction over the
            circuit in which the respondent resides or has its principal
            place of business, or to the United States Court of Appeals for
            the District of Columbia Circuit, for an order setting aside,
            limiting, or suspending the effectiveness or enforcement of the
            order, and the court shall have jurisdiction to enter such an
            order. A respondent served with a temporary cease-and-desist
            order entered without a prior Commission hearing may not apply
            to the court except after hearing and decision by the
            Commission on the respondent's application under paragraph (1)
            of this subsection.
                ``(3) No automatic stay of temporary order.--The
            commencement of proceedings under paragraph (2) of this
            subsection shall not, unless specifically ordered by the court,
            operate as a stay of the Commission's order.
                ``(4) Exclusive review.--Sections 19(d) and 24 shall not
            apply to a temporary order entered pursuant to this section.
        ``(i) Implementation.--The Commission is authorized to adopt rules,
    regulations, and orders as it deems appropriate to implement this
    section.''.
        (c) Natural Gas Policy Act of 1978.--Section 504 of the Natural Gas
    Policy Act of 1978 (15 U.S.C. 3414) is amended by adding the following
    at the end:
        ``(d) Cease-and-desist Proceedings; Temporary Orders; Authority of
    the Commission.--
                ``(1) In general.--If the Commission finds, after notice
            and opportunity for hearing, that any entity may be violating,
            may have violated, or may be about to violate any provision of
            this Act, or any rule, regulation, restriction, condition, or
            order made or imposed by the Commission under the authority of
            this Act, the Commission may publish its findings and issue an
            order requiring such entity, and any other entity that is, was,
            or would be a cause of the violation, due to an act or omission
            the entity knew or should have known would contribute to such
            violation, to cease and desist from committing or causing such
            violation and any future violation of the same provision, rule,
            or regulation. Such order may, in addition to requiring an
            entity to cease and desist from committing or causing a
            violation, require such entity to comply, to provide an
            accounting and disgorgement, or to take steps to effect
            compliance, with such provision, rule, or regulation, upon such
            terms and conditions and within such time as the Commission may
            specify in such order. Any such order may, as the Commission
            deems appropriate, require future compliance or steps to effect
            future compliance, either permanently or for such period of
            time as the Commission may specify.
                ``(2) Timing of entry.--An order issued under this
            subsection shall be entered only after notice and opportunity
            for a hearing, unless the Commission determines that notice and
            hearing prior to entry would be impracticable or contrary to
            the public interest.
                ``(3) Hearing.--The notice instituting proceedings pursuant
            to paragraph (1) shall fix a hearing date not earlier than 30
            days nor later than 60 days after service of the notice unless
            an earlier or a later date is set by the Commission with the
            consent of any respondent so served.
                ``(4) Temporary order.--Whenever the Commission determines
            that--
                        ``(A) a respondent may take actions to dissipate or
                    convert assets prior to the completion of the
                    proceedings referred to in paragraph (1) and such
                    assets would be necessary to comply with or otherwise
                    satisfy a final enforcement order of the Commission
                    pursuant to alleged violations or threatened violations
                    specified in the notice instituting proceedings; or
                        ``(B) a respondent is engaged in actual or
                    threatened violations of this Act or a Commission rule,
                    regulation, restriction or order referred to in
                    paragraph (1),
            the Commission may issue a temporary order requiring the
            respondent to take such action to prevent dissipation or
            conversion of assets, significant harm to energy consumers, or
            substantial harm to the public interest, frustration of the
            Commission's ability to conduct the proceedings, or frustration
            of the Commission's ability to redress said violation at the
            conclusion of the proceedings, as the Commission deems
            appropriate pending completion of such proceedings.
                ``(5) Review of temporary orders.--
                        ``(A) Commission review.--At any time after the
                    respondent has been served with a temporary cease-and-
                    desist order pursuant to paragraph (4), the respondent
                    may apply to the Commission to have the order set
                    aside, limited, or suspended. If the respondent has
                    been served with a temporary cease-and-desist order
                    entered without a prior Commission hearing, the
                    respondent may, within 10 days after the date on which
                    the order was served, request a hearing on such
                    application and the Commission shall hold a hearing and
                    render a decision on such application at the earliest
                    possible time.
                        ``(B) Judicial review.--Within--
                                ``(i) 10 days after the date the respondent
                            was served with a temporary cease-and-desist
                            order entered with a prior Commission hearing;
                            or
                                ``(ii) 10 days after the Commission renders
                            a decision on an application and hearing under
                            subparagraph (A), with respect to any temporary
                            cease-and-desist order entered without a prior
                            Commission hearing, the respondent may apply to
                            the United States circuit court having
                            jurisdiction over the circuit in which the
                            respondent resides or has its principal place
                            of business, or to the United States Court of
                            Appeals for the District of Columbia Circuit,
                            for an order setting aside, limiting, or
                            suspending the effectiveness or enforcement of
                            the order, and the court shall have
                            jurisdiction to enter such an order. A
                            respondent served with a temporary cease-and-
                            desist order entered without a prior Commission
                            hearing may not apply to the court except after
                            hearing and decision by the Commission on the
                            respondent's application under paragraph (1) of
                            this subsection.
                        ``(C) No automatic stay of temporary order.--The
                    commencement of proceedings under subparagraph (B) of
                    this paragraph shall not, unless specifically ordered
                    by the court, operate as a stay of the Commission's
                    order.
                ``(6) Implementation.--The Commission is authorized to
            adopt rules, regulations, and orders as it deems appropriate to
            implement this subsection.''.

    SEC. 360. PRESIDENTIAL REVIEW OF REGULATIONS.

        Not later than 24 months after the date of enactment of this Act,
    the President shall review the offset regulations and derivatives
    regulations promulgated pursuant to the American Clean Energy and
    Security Act of 2009. The President shall determine whether such
    regulations adequately protect the United States financial system from
    systemic risk.

               TITLE IV--TRANSITIONING TO A CLEAN ENERGY ECONOMY

          Subtitle A--Ensuring Real Reductions in Industrial Emissions

    SEC. 401. ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS.

        Title VII of the Clean Air Act is amended by inserting after part E
    the following new part:

           ``PART F--ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS

    ``SEC. 761. PURPOSES.

        ``(a) Purposes of Part.--The purposes of this part are--
                ``(1) to promote a strong global effort to significantly
            reduce greenhouse gas emissions, and, through this global
            effort, stabilize greenhouse gas concentrations in the
            atmosphere at a level that will prevent dangerous anthropogenic
            interference with the climate system; and
                ``(2) to prevent an increase in greenhouse gas emissions in
            countries other than the United States as a result of direct
            and indirect compliance costs incurred under this title.
        ``(b) Purposes of Subpart 1.--The purposes of subpart 1 are
    additionally--
                ``(1) to provide a rebate to the owners and operators of
            entities in domestic eligible industrial sectors for their
            greenhouse gas emission costs incurred under this title, but
            not for costs associated with other related or unrelated market
            dynamics;
                ``(2) to design such rebates in a way that will prevent
            carbon leakage while also rewarding innovation and facility-
            level investments in energy efficiency performance
            improvements; and
                ``(3) to eliminate or reduce distribution of emission
            allowances under subpart 1 when such distribution is no longer
            necessary to prevent carbon leakage from eligible industrial
            sectors.
        ``(c) Purposes of Subpart 2.--The purposes of subpart 2 are
    additionally--
                ``(1) to induce foreign countries, and, in particular,
            fast-growing developing countries, to take substantial action
            with respect to their greenhouse gas emissions consistent with
            the Bali Action Plan developed under the United Nations
            Framework Convention on Climate Change; and
                ``(2) to ensure that the measures described in subpart 2
            are designed and implemented in a manner consistent with
            applicable international agreements to which the United States
            is a party.

    ``SEC. 762. DEFINITIONS.

        ``In this part:
                ``(1) Carbon leakage.--The term `carbon leakage' means any
            substantial increase (as determined by the Administrator) in
            greenhouse gas emissions by industrial entities located in
            other countries if such increase is caused by an incremental
            cost of production increase in the United States resulting from
            the implementation of this title.
                ``(2) Covered good.--The term `covered good' means a good
            that, as identified by the Administrator by regulation, is
            either--
                        ``(A) entered under a heading or subheading of the
                    Harmonized Tariff Schedule of the United States that
                    corresponds to the NAICS code for an eligible
                    industrial sector, as established in the concordance
                    between NAICS codes and the Harmonized Tariff Schedule
                    of the United States prepared by the United States
                    Census Bureau; or
                        ``(B) a manufactured item for consumption.
                ``(3) Eligible industrial sector.--The term `eligible
            industrial sector' means an industrial sector determined by the
            Administrator under section 763(b) to be eligible to receive
            emission allowance rebates under subpart 1.
                ``(4) Industrial sector.--The term `industrial sector'
            means any sector that is in the manufacturing sector (as
            defined in NAICS codes 31, 32, and 33) or that beneficiates or
            otherwise processes (including agglomeration) metal ores,
            including iron and copper ores, soda ash, or phosphate. The
            extraction of metal ores, soda ash, or phosphate shall not be
            considered to be an industrial sector.
                ``(5) Manufactured item for consumption.--
                        ``(A) In general.--The term `manufactured item for
                    consumption' means any good--
                                ``(i) that includes in substantial amounts
                            one or more goods like the goods produced by an
                            eligible industrial sector;
                                ``(ii) with respect to which an
                            international reserve allowance program
                            pursuant to subpart 2 is in effect with regard
                            to the eligible industrial sector and the
                            quantity of international reserve allowances is
                            not zero pursuant to section 768(b);
                                ``(iii) with respect to which the trade
                            intensity of the industrial sector that
                            produces the good, as measured consistent with
                            section 763(b)(2)(A)(iii), is at least 15
                            percent; and
                                ``(iv) for which the domestic producers of
                            the good have demonstrated, and the
                            Administrator has determined, that the
                            application of the international reserve
                            allowance program pursuant to subpart 2 is
                            technically and administratively feasible and
                            appropriate to achieve the purposes of this
                            part, taking into account the energy and
                            greenhouse gas intensity of the industrial
                            sector that produces the good, as measured
                            consistent with section 763(b)(2)(A)(ii), and
                            the ability of such producers to pass on cost
                            increases and other appropriate factors.
                        ``(B) Rule of construction.--A determination of the
                    Administrator under subparagraph (A)(iv) shall not be
                    considered to be a determination of the President under
                    section 767(b).
                ``(6) NAICS.--The term `NAICS' means the North American
            Industrial Classification System of 2002.
                ``(7) Output.--The term `output' means the total tonnage or
            other standard unit of production (as determined by the
            Administrator) produced by an entity in an industrial sector.
            The output of the cement sector is hydraulic cement, and not
            clinker.

                 ``Subpart 1--Emission Allowance Rebate Program

    ``SEC. 763. ELIGIBLE INDUSTRIAL SECTORS.

        ``(a) List.--
                ``(1) Initial list.--Not later than June 30, 2011, the
            Administrator shall publish in the Federal Register a list of
            eligible industrial sectors pursuant to subsection (b). Such
            list shall include the amount of the emission allowance rebate
            per unit of production that shall be provided to entities in
            each eligible industrial sector in the following two calendar
            years pursuant to section 764.
                ``(2) Subsequent lists.--Not later than February 1, 2013,
            and every 4 years thereafter, the Administrator shall publish
            in the Federal Register an updated version of the list
            published under paragraph (1).
        ``(b) Eligible Industrial Sectors.--
                ``(1) In general.--Not later than June 30, 2011, the
            Administrator shall promulgate a rule designating, based on the
            criteria under paragraph (2), the industrial sectors eligible
            for emission allowance rebates under this subpart.
                ``(2) Presumptively eligible industrial sectors.--
                        ``(A) Eligibility criteria.--
                                ``(i) In general.--An owner or operator of
                            an entity shall be eligible to receive emission
                            allowance rebates under this subpart if such
                            entity is in an industrial sector that is
                            included in a six-digit classification of the
                            NAICS that meets the criteria in both clauses
                            (ii) and (iii), or the criteria in clause (iv).
                                ``(ii) Energy or greenhouse gas
                            intensity.--As determined by the Administrator,
                            the industrial sector had--
                                        ``(I) an energy intensity of at
                                    least 5 percent, calculated by dividing
                                    the cost of purchased electricity and
                                    fuel costs of the sector by the value
                                    of the shipments of the sector, based
                                    on data described in subparagraph (D);
                                    or
                                        ``(II) a greenhouse gas intensity
                                    of at least 5 percent, calculated by
                                    dividing--
                                                ``(aa) the number 20
                                            multiplied by the number of
                                            tons of carbon dioxide
                                            equivalent greenhouse gas
                                            emissions (including direct
                                            emissions from fuel combustion,
                                            process emissions, and indirect
                                            emissions from the generation
                                            of electricity used to produce
                                            the output of the sector) of
                                            the sector based on data
                                            described in subparagraph (D);
                                            by
                                                ``(bb) the value of the
                                            shipments of the sector, based
                                            on data described in
                                            subparagraph (D).
                                ``(iii) Trade intensity.--As determined by
                            the Administrator, the industrial sector had a
                            trade intensity of at least 15 percent,
                            calculated by dividing the value of the total
                            imports and exports of such sector by the value
                            of the shipments plus the value of imports of
                            such sector, based on data described in
                            subparagraph (D).
                                ``(iv) Very high energy or greenhouse gas
                            intensity.--As determined by the Administrator,
                            the industrial sector had an energy or
                            greenhouse gas intensity, as calculated under
                            clause (ii)(I) or (II), of at least 20 percent.
                        ``(B) Metal and phosphate production classified
                    under more than one naics code.--For purposes of this
                    section, the Administrator shall--
                                ``(i) aggregate data for the beneficiation
                            or other processing (including agglomeration)
                            of metal ores, including iron and copper ores,
                            soda ash, or phosphate with subsequent steps in
                            the process of metal and phosphate
                            manufacturing, regardless of the NAICS code
                            under which such activity is classified; and
                                ``(ii) aggregate data for the manufacturing
                            of steel with the manufacturing of steel pipe
                            and tube made from purchased steel in a
                            nonintegrated process.
                        ``(C) Exclusion.--The petroleum refining sector
                    shall not be an eligible industrial sector.
                        ``(D) Data sources.--
                                ``(i) Electricity and fuel costs, value of
                            shipments.--The Administrator shall determine
                            electricity and fuel costs and the value of
                            shipments under this subsection from data from
                            the United States Census Annual Survey of
                            Manufacturers. The Administrator shall take the
                            average of data from as many of the years of
                            2004, 2005, and 2006 for which such data are
                            available. If such data are unavailable, the
                            Administrator shall make a determination based
                            upon 2002 or 2006 data from the most detailed
                            industrial classification level of Energy
                            Information Agency's Manufacturing Energy
                            Consumption Survey (using 2006 data if it is
                            available) and the 2002 or 2007 Economic Census
                            of the United States (using 2007 data if it is
                            available). If data from the Manufacturing
                            Energy Consumption Survey or Economic Census
                            are unavailable for any sector at the six-digit
                            classification level in the NAICS, then the
                            Administrator may extrapolate the information
                            necessary to determine the eligibility of a
                            sector under this paragraph from available
                            Manufacturing Energy Consumption Survey or
                            Economic Census data pertaining to a broader
                            industrial category classified in the NAICS. If
                            data relating to the beneficiation or other
                            processing (including agglomeration) of metal
                            ores, including iron and copper ores, soda ash,
                            or phosphate are not available from the
                            specified data sources, the Administrator shall
                            use the best available Federal or State
                            government data and may use, to the extent
                            necessary, representative data submitted by
                            entities that perform such beneficiation or
                            other processing (including agglomeration), in
                            making a determination. Fuel cost data shall
                            not include the cost of fuel used as feedstock
                            by an industrial sector.
                                ``(ii) Imports and exports.--The
                            Administrator shall base the value of imports
                            and exports under this subsection on United
                            States International Trade Commission data. The
                            Administrator shall take the average of data
                            from as many of the years of 2004, 2005, and
                            2006 for which such data are available. If data
                            from the United States International Trade
                            Commission are unavailable for any sector at
                            the six-digit classification level in the
                            NAICS, then the Administrator may extrapolate
                            the information necessary to determine the
                            eligibility of a sector under this paragraph
                            from available United States International
                            Trade Commission data pertaining to a broader
                            industrial category classified in the NAICS.
                                ``(iii) Percentages.--The Administrator
                            shall round the energy intensity, greenhouse
                            gas intensity, and trade intensity percentages
                            under subparagraph (A) to the nearest whole
                            number.
                                ``(iv) Greenhouse gas emission
                            calculations.--When calculating the tons of
                            carbon dioxide equivalent greenhouse gas
                            emissions for each sector under subparagraph
                            (A)(ii)(II)(aa), the Administrator--
                                        ``(I) shall use the best available
                                    data from as many of the years 2004,
                                    2005, and 2006 for which such data is
                                    available; and
                                        ``(II) may, to the extent necessary
                                    with respect to a sector, use economic
                                    and engineering models and the best
                                    available information on technology
                                    performance levels for such sector.
                ``(3) Administrative determination of additional eligible
            industrial sectors.--
                        ``(A) Updated trade intensity data.--The
                    Administrator shall designate as eligible to receive
                    emission allowance rebates under this subpart an
                    industrial sector that--
                                ``(i) met the energy or greenhouse gas
                            intensity criteria in paragraph (2)(A)(ii) as
                            of the date of promulgation of the rule under
                            paragraph (1); and
                                ``(ii) meets the trade intensity criteria
                            in paragraph (2)(A)(iii), using data from any
                            year after 2006.
                        ``(B) Individual showing petition.--
                                ``(i) Petition.--In addition to designation
                            under paragraph (2) or subparagraph (A) of this
                            paragraph, the owner or operator of an entity
                            in an industrial sector may petition the
                            Administrator to designate as eligible
                            industrial sectors under this subpart an entity
                            or a group of entities that--
                                        ``(I) represent a subsector of a
                                    six-digit section of the NAICS code;
                                    and
                                        ``(II) meet the eligibility
                                    criteria in both clauses (ii) and (iii)
                                    of paragraph (2)(A), or the eligibility
                                    criteria in clause (iv) of paragraph
                                    (2)(A).
                                ``(ii) Data.--In making a determination
                            under this subparagraph, the Administrator
                            shall consider data submitted by the petitioner
                            that is specific to the entity, data solicited
                            by the Administrator from other entities in the
                            subsector, if such other entities exist, and
                            data specified in paragraph (2)(D).
                                ``(iii) Basis of subsector determination.--
                            The Administrator shall determine an entity or
                            group of entities to be a subsector of a six-
                            digit section of the NAICS code based only upon
                            the products manufactured and not the
                            industrial process by which the products are
                            manufactured, except that the Administrator may
                            determine an entity or group of entities that
                            manufacture a product from primarily virgin
                            material to be a separate subsector from
                            another entity or group of entities that
                            manufacture the same product primarily from
                            recycled material.
                                ``(iv) Use of most recent data.--In
                            determining whether to designate a sector or
                            subsector as an eligible industrial sector
                            under this subparagraph, the Administrator
                            shall use the most recent data available from
                            the sources described in paragraph (2)(D),
                            rather than the data from the years specified
                            in paragraph (2)(D), to determine the trade
                            intensity of such sector or subsector, but only
                            for determining such trade intensity.
                                ``(v) Final action.--The Administrator
                            shall take final action on such petition no
                            later than 6 months after the petition is
                            received by the Administrator.

    ``SEC. 764. DISTRIBUTION OF EMISSION ALLOWANCE REBATES.

        ``(a) Distribution Schedule.--
                ``(1) In general.--For each vintage year, the Administrator
            shall distribute pursuant to this section emission allowances
            made available under section 782(e), no later than October 31
            of the preceding calendar year. The Administrator shall make
            such annual distributions to the owners and operators of each
            entity in an eligible industrial sector in the amount of
            emission allowances calculated under subsection (b), except
            that--
                        ``(A) for vintage years 2012 and 2013, the
                    distribution for a covered entity shall be pursuant to
                    the entity's indirect carbon factor as calculated under
                    subsection (b)(3);
                        ``(B) for vintage year 2026 and thereafter, the
                    distribution shall be pursuant to the amount calculated
                    under subsection (b) multiplied by, except as modified
                    by the President pursuant to section 767(d)(1)(C) for a
                    sector--
                                ``(i) 90 percent for vintage year 2026;
                                ``(ii) 80 percent for vintage year 2027;
                                ``(iii) 70 percent for vintage year 2028;
                                ``(iv) 60 percent for vintage year 2029;
                                ``(v) 50 percent for vintage year 2030;
                                ``(vi) 40 percent for vintage year 2031;
                                ``(vii) 30 percent for vintage year 2032;
                                ``(viii) 20 percent for vintage year 2033;
                                ``(ix) 10 percent for vintage year 2034;
                            and
                                ``(x) 0 percent for vintage year 2035 and
                            thereafter.
                ``(2) Resumption of reduction.--If the President has
            modified the percentage stated in paragraph (1)(B) under
            section 767(d)(1)(C), and the President subsequently makes a
            determination under section 767(c) for an eligible industrial
            sector that more than 85 percent of United States imports for
            that sector are produced or manufactured in countries that have
            met at least one of the criteria in that section, then the 10-
            year reduction schedule set forth in paragraph (1)(B) of this
            subsection shall begin in the next vintage year, with the
            percentage reduction based on the amount of the distribution of
            emission allowances under this section in the previous year.
                ``(3) Newly eligible sectors.--In addition to receiving a
            distribution of emission allowances under this section in the
            first distribution occurring after an industrial sector is
            designated as eligible under section 763(b)(3), the owner or
            operator of an entity in that eligible industrial sector may
            receive a prorated share of any emission allowances made
            available for distribution under this section that were not
            distributed for the year in which the petition for eligibility
            was granted under section 763(b)(3)(A).
                ``(4) Cessation of qualifying activities.--If, as
            determined by the Administrator, a facility is no longer in an
            eligible industrial sector designated under section 763--
                        ``(A) the Administrator shall not distribute
                    emission allowances to the owner or operator of such
                    facility under this section; and
                        ``(B) the owner or operator of such facility shall
                    return to the Administrator all allowances that have
                    been distributed to it for future vintage years and a
                    pro-rated amount of allowances distributed to the
                    facility under this section for the vintage year in
                    which the facility ceases to be in an eligible
                    industrial sector designated under section 763.
        ``(b) Calculation of Direct and Indirect Carbon Factors.--
                ``(1) In general.--
                        ``(A) Covered entities.--Except as provided in
                    subsection (a), for covered entities that are in
                    eligible industrial sectors, the amount of emission
                    allowance rebates shall be based on the sum of the
                    covered entity's direct and indirect carbon factors.
                        ``(B) Other eligible entities.--For entities that
                    are in eligible industrial sectors but are not covered
                    entities, the amount of emission allowance rebates
                    shall be based on the entity's indirect carbon factor.
                        ``(C) New entities.--Not later than 2 years after
                    the date of enactment of this title, the Administrator
                    shall issue regulations governing the distribution of
                    emission allowance rebates for the first and second
                    years of operation of a new entity in an eligible
                    industrial sector. These regulations shall provide
                    for--
                                ``(i) the distribution of emission
                            allowance rebates to such entities based on
                            comparable entities in the same sector; and
                                ``(ii) an adjustment in the third and
                            fourth years of operation to reconcile the
                            total amount of emission allowance rebates
                            received during the first and second years of
                            operation to the amount the entity would have
                            received during the first and second years of
                            operation had the appropriate data been
                            available.
                ``(2) Direct carbon factor.--The direct carbon factor for a
            covered entity for a vintage year is the product of--
                        ``(A) the average annual output of the covered
                    entity for the 2 years preceding the year of the
                    distribution; and
                        ``(B) the most recent calculation of the average
                    direct greenhouse gas emissions (expressed in tons of
                    carbon dioxide equivalent) per unit of output for all
                    covered entities in the sector, as determined by the
                    Administrator under paragraph (4).
                ``(3) Indirect carbon factor.--
                        ``(A) In general.--The indirect carbon factor for
                    an entity for a vintage year is the product obtained by
                    multiplying the average annual output of the entity for
                    the 2 years preceding the year of the distribution by
                    both the electricity emissions intensity factor
                    determined pursuant to subparagraph (B) and the
                    electricity efficiency factor determined pursuant to
                    subparagraph (C) for the year concerned.
                        ``(B) Electricity emissions intensity factor.--
                                ``(i) In general.--Each person selling
                            electricity to the owner or operator of an
                            entity in any sector designated as an eligible
                            industrial sector under section 763(b) shall
                            provide the owner or operator of the entity and
                            the Administrator, on an annual basis, the
                            electricity emissions intensity factor for the
                            entity. The electricity emissions intensity
                            factor for the entity, expressed in tons of
                            carbon dioxide equivalents per kilowatt hour,
                            is determined by dividing--
                                        ``(I) the annual sum of the hourly
                                    product of--
                                                ``(aa) the electricity
                                            purchased by the entity from
                                            that person in each hour
                                            (expressed in kilowatt hours);
                                            multiplied by
                                                ``(bb) the marginal or
                                            weighted average tons of carbon
                                            dioxide equivalent per kilowatt
                                            hour that are reflected in the
                                            electricity charges to the
                                            entity, as determined by the
                                            entity's retail rate
                                            arrangements; by
                                        ``(II) the total kilowatt hours of
                                    electricity purchased by the entity
                                    from that person during that year.
                                ``(ii) Use of other data to determine
                            factor.--Where it is not possible to determine
                            the precise electricity emissions intensity
                            factor for an entity using the methodology in
                            clause (i), the person selling electricity
                            shall use the monthly average data reported by
                            the Energy Information Administration or
                            collected and reported by the Administrator for
                            the utility serving the entity to determine the
                            electricity emissions intensity factor.
                        ``(C) Electricity efficiency factor.--The
                    electricity efficiency factor is the average amount of
                    electricity (in kilowatt hours) used per unit of output
                    for all entities in the relevant sector, as determined
                    by the Administrator based on the best available data,
                    including data provided under paragraph (6).
                        ``(D) Indirect carbon factor reduction.--If an
                    electricity provider received a free allocation of
                    emission allowances pursuant to section 782(a), the
                    Administrator shall adjust the indirect carbon factor
                    to avoid rebates to the eligible entity for costs that
                    the Administrator determines were not incurred by the
                    eligible entity because the allowances were freely
                    allocated to the eligible entity's electricity provider
                    and used for the benefit of industrial consumers.
                ``(4) Greenhouse gas intensity calculations.--The
            Administrator shall calculate the average direct greenhouse gas
            emissions (expressed in tons of carbon dioxide equivalent) per
            unit of output and the electricity efficiency factor for all
            covered entities in each eligible industrial sector every 4
            years, using an average of the four most recent years of the
            best available data. For purposes of the lists required to be
            published no later than February 1, 2013, the Administrator
            shall use the best available data for the maximum number of
            years, up to 4 years, for which data are available.
                ``(5) Ensuring efficiency improvements.--When making
            greenhouse gas calculations, the Administrator shall--
                        ``(A) limit the average direct greenhouse gas
                    emissions per unit of output, calculated under
                    paragraph (4), for any eligible industrial sector to an
                    amount that is not greater than it was in any previous
                    calculation under this subsection;
                        ``(B) limit the electricity emissions intensity
                    factor, calculated under paragraph (3)(B) and resulting
                    from a change in electricity supply, for any entity to
                    an amount that is not greater than it was during any
                    previous year; and
                        ``(C) limit the electricity efficiency factor,
                    calculated under paragraph (3)(C), for any eligible
                    industrial sector to an amount that is not greater than
                    it was in any previous calculation under this
                    subsection.
                ``(6) Data sources.--For the purposes of this subsection--
                        ``(A) the Administrator shall use data from the
                    greenhouse gas registry established under section 713,
                    where it is available; and
                        ``(B) each owner or operator of an entity in an
                    eligible industrial sector and each department, agency,
                    and instrumentality of the United States shall provide
                    the Administrator with such information as the
                    Administrator finds necessary to determine the direct
                    carbon factor and the indirect carbon factor for each
                    entity subject to this section.
        ``(c) Total Maximum Distribution.--Notwithstanding subsections (a)
    and (b), the Administrator shall not distribute more allowances for any
    vintage year pursuant to this section than are allocated for use under
    this subpart pursuant to section 782(e) for that vintage year. For any
    vintage year for which the total emission allowance rebates calculated
    pursuant to this section exceed the number of allowances allocated
    pursuant to section 782(e), the Administrator shall reduce each
    entity's distribution on a pro rata basis so that the total
    distribution under this section equals the number of allowances
    allocated under section 782(e).
        ``(d) Iron and Steel Sector.--For purposes of this section, the
    Administrator shall consider as in different industrial sectors--
                ``(1) entities using integrated iron and steelmaking
            technologies (including coke ovens, blast furnaces, and other
            iron-making technologies); and
                ``(2) entities using electric arc furnace technologies.
        ``(e) Metal, Soda Ash, or Phosphate Production Classified Under
    More Than One Naics Code.--For purposes of this section, the
    Administrator shall not aggregate data for the beneficiation or other
    processing (including agglomeration) of metal ores, soda ash, or
    phosphate with subsequent steps in the process of metal, soda ash, or
    phosphate manufacturing. The Administrator shall consider the
    beneficiation or other processing (including agglomeration) of metal
    ores, soda ash, or phosphate to be in separate industrial sectors from
    the metal, soda ash, or phosphate manufacturing sectors. Industrial
    sectors that beneficiate or otherwise process (including agglomeration)
    metal ores, soda ash, or phosphate shall not receive emission allowance
    rebates under this section related to the activity of extracting metal
    ores, soda ash, or phosphate.
        ``(f) Combined Heat and Power.--For purposes of this section, and
    to achieve the purpose set forth in section 761(b)(2), the
    Administrator may consider entities to be in different industrial
    sectors or otherwise take into account the differences among entities
    in the same industrial sector, based upon the extent to which such
    entities use combined heat and power technologies.

    ``Subpart 2--Promoting International Reductions in Industrial Emissions

    ``SEC. 765. INTERNATIONAL NEGOTIATIONS.

        ``(a) Finding.--Congress finds that the purposes of this subpart,
    as set forth in section 761(c), can be most effectively addressed and
    achieved through agreements negotiated between the United States and
    foreign countries.
        ``(b) 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 fora, to establish binding
    agreements, including sectoral agreements, committing all major
    greenhouse gas-emitting nations to contribute equitably to the
    reduction of global greenhouse gas emissions.
        ``(c) Notification of Foreign Countries.--
                ``(1) In general.--As soon as practicable after the date of
            the enactment of this title, the President shall provide a
            notification on climate change described in paragraph (2) to
            each foreign country the products of which are not exempted
            under section 768(a)(1)(E).
                ``(2) Notification described.--A notification described in
            this paragraph is a notification that consists of--
                        ``(A) a statement of the policy of the United
                    States described in subsection (b); and
                        ``(B) a declaration--
                                ``(i) requesting the foreign country to
                            take appropriate measures to limit the
                            greenhouse gas emissions of the foreign
                            country; and
                                ``(ii) indicating that, beginning on
                            January 1, 2020, the international reserve
                            requirements of this subpart may apply to a
                            covered good.

    ``SEC. 766. UNITED STATES NEGOTIATING OBJECTIVES WITH RESPECT TO
                  MULTILATERAL ENVIRONMENTAL NEGOTIATIONS.

        ``(a) In General.--The negotiating objectives of the United States
    with respect to multilateral environmental negotiations described in
    this subpart are--
                ``(1) to reach an internationally binding agreement in
            which all major greenhouse gas-emitting countries contribute
            equitably to the reduction of global greenhouse gas emissions;
                ``(2)(A) to include in such international agreement
            provisions that recognize and address the competitive
            imbalances that lead to carbon leakage and may be created
            between parties and non-parties to the agreement in domestic
            and export markets; and
                ``(B) not to prevent parties to such agreement from
            addressing the competitive imbalances that lead to carbon
            leakage and may be created by the agreement among parties to
            the agreement in domestic and export markets ; and
                ``(3) to include in such international agreement agreed
            remedies for any party to the agreement that fails to meet its
            greenhouse gas reduction obligations in the agreement.
        ``(b) Rule of Construction.--Nothing in subsection (a)(2) shall be
    construed to require the United States to alter the provisions of
    section 764 .

    ``SEC. 767. PRESIDENTIAL REPORTS AND DETERMINATIONS.

        ``(a) Report.--Not later than January 1, 2017, and every 2 years
    thereafter, the President shall submit a report to Congress on the
    effectiveness of the distribution of emission allowance rebates under
    subpart 1 in mitigating carbon leakage in eligible industrial sectors.
    Such report shall also include--
                ``(1) an assessment, for each eligible industrial sector
            receiving emission allowance rebates, as to whether, and by how
            much, the per unit cost of production has increased for that
            sector as a result of compliance with section 722 (as
            determined in a manner consistent with section 764(b)), taking
            into account the provision of the emission allowance rebates to
            that industrial sector and the benefit received by that
            industrial sector from the provision of free allowances to
            electricity providers pursuant to section 782(a);
                ``(2) recommendations on how to better achieve the purposes
            of this subpart, including an assessment of the feasibility and
            usefulness of an international reserve allowance program for
            the eligible industrial sector under section 768;
                ``(3) to the extent the President determines that an
            international reserve allowance program would not be useful for
            the eligible industrial sector because its exposure to carbon
            leakage is the result of competition in export markets with
            goods produced in countries not implementing similar greenhouse
            gas emission reduction policies, an identification of, and to
            the extent appropriate a description of how the President will
            implement, alternative actions or programs consistent with the
            purposes of this subpart (and, in such case, the President may
            determine not to apply an international reserve allowance
            program to the eligible industrial sector under subsection
            (b)); and
                ``(4) an assessment of the amount and duration of
            assistance, including distribution of free allowances, being
            provided to industrial sectors in other developed countries to
            mitigate costs of compliance with domestic greenhouse gas
            reduction programs in such countries.
        ``(b) Presidential Determination.--
                ``(1) In general.--If, by January 1, 2018, a multilateral
            agreement consistent with the negotiating objectives set forth
            in section 766 has not entered into force with respect to the
            United States, the President shall establish an international
            reserve allowance program for each eligible industrial sector
            to the extent provided under section 768 unless--
                        ``(A) the President determines and certifies to the
                    Congress with respect to such eligible industrial
                    sector that such program would not be in the national
                    economic interest or environmental interest of the
                    United States; and
                        ``(B) not later than 90 days after the President
                    transmits the certification described in subparagraph
                    (A), a joint resolution is enacted into law that
                    approves the determination of the President described
                    in subparagraph (A).
                ``(2) Contents of joint resolution.--For purposes of this
            subsection, the term `joint resolution' means only a joint
            resolution of the two Houses of Congress, the matter after the
            resolving clause of which is as follows: `That the Congress
            approves the determination of the President under section
            768(b)(1)(A) of the Clean Air Act transmitted to the Congress
            on ______.', the blank space being filled with the appropriate
            date.
                ``(3) Congressional procedures.--Subsections (c), (d), (e),
            and (f) of section 152 of the Trade Act of 1974 (19 U.S.C. 2192
            (c), (d), (e), and (f)) shall apply to a joint resolution under
            this subsection to the same extent as such subsections apply to
            a joint resolution under section 152 of such Act.
                ``(4) Rule of construction.--For purposes of this section
            and section 768, if the President transmits a multilateral
            agreement to Congress (regardless of whether it is transmitted
            as a treaty for ratification by the Senate or another
            international agreement for implementation by law enacted by
            the Congress) indicating that the agreement is consistent with
            the negotiating objectives set forth in section 766, such
            agreement will be considered to be consistent with such
            negotiating objectives as of the date on which the Senate
            ratifies the treaty, or legislation is enacted implementing
            such other agreement, unless the Senate (in the case of
            ratification) or the implementing legislation expressly
            provides that the multilateral agreement shall not be treated
            as consistent with such negotiating objectives for purposes of
            this section and section 768.
        ``(c) Determinations With Respect to Eligible Industrial Sectors.--
    If the President establishes an international reserve allowance program
    pursuant to subsection (b), then not later than June 30, 2018, and
    every 4 years thereafter, the President, in consultation with the
    Administrator and other appropriate agencies, shall determine, for each
    eligible industrial sector, whether or not more than 85 percent of
    United States imports of covered goods with respect to that sector are
    produced or manufactured in countries that have met at least one of the
    following criteria:
                ``(1) The country is a party to an international agreement
            to which the United States is a party that includes a
            nationally enforceable and economy-wide greenhouse gas
            emissions reduction commitment for that country that is at
            least as stringent as that of the United States.
                ``(2) The country is a party to a multilateral or bilateral
            emission reduction agreement for that sector to the which the
            United States is a party.
                ``(3) The country has an annual energy or greenhouse gas
            intensity, as described in section 763(b)(2)(A)(ii), for the
            sector that is equal to or less than the energy or greenhouse
            gas intensity for such industrial sector in the United States
            in the most recent calendar year for which data are available.
        ``(d) Effect of Presidential Determination.--
                ``(1) Required actions.--If the President makes a
            determination under subsection (c) with respect to an eligible
            industrial sector that 85 percent or less of United States
            imports of covered goods with respect to the sector are
            produced or manufactured in countries that have met one or more
            of the criteria in subsection (c), then the President shall,
            not later than June 30, 2018, and every 4 years thereafter--
                        ``(A) assess the extent to which the emission
                    allowance rebates provided pursuant to subpart 1 and
                    the benefit received by that industrial sector from the
                    provision of free allowances to electricity providers
                    pursuant to section 782(a) have mitigated or addressed,
                    or could mitigate or address, carbon leakage in that
                    sector;
                        ``(B) assess the extent to which an international
                    reserve allowance program has mitigated or addressed,
                    or could mitigate or address, carbon leakage in that
                    sector; and
                        ``(C) with respect to that sector--
                                ``(i) modify the percentage by which direct
                            and indirect carbon factors will be multiplied
                            under section 764(a)(1)(B); and
                                ``(ii) apply or continue to apply an
                            international reserve allowance program under
                            section 768 with respect to imports of covered
                            goods with respect to that sector.
                ``(2) Prohibited actions.--If the President makes a
            determination under subsection (c) with respect to an eligible
            industrial sector that more than 85 percent of United States
            imports of covered goods with respect to the sector are
            produced or manufactured in countries that have met one or more
            of the criteria in subsection (c), then the President may not
            apply or continue to apply an international reserve allowance
            program under section 768 with respect to imports of covered
            goods with respect to that sector.
        ``(e) Report to Congress.--Not later than June 30, 2018, and every
    4 years thereafter, the President shall transmit to the Congress a
    report providing notice of any determination made under subsection (c),
    explaining the reasons for such determination, and identifying the
    actions taken by the President under subsection (d).

    ``SEC. 768. INTERNATIONAL RESERVE ALLOWANCE PROGRAM.

        ``(a) Establishment.--
                ``(1) In general.--The Administrator, with the concurrence
            of Commissioner responsible for U.S. Customs and Border
            Protection, shall issue regulations--
                        ``(A) establishing an international reserve
                    allowance program for the sale, exchange, purchase,
                    transfer, and banking of international reserve
                    allowances for covered goods with respect to the
                    eligible industrial sector;
                        ``(B) ensuring that the price for purchasing the
                    international reserve allowances from the United States
                    on a particular day is equivalent to the auction
                    clearing price for emission allowances under section
                    722 for the most recent emission allowance auction;
                        ``(C) establishing a general methodology for
                    calculating the quantity of international reserve
                    allowances that a United States importer of any covered
                    good must submit;
                        ``(D) requiring the submission of appropriate
                    amounts of such allowances for covered goods with
                    respect to the eligible industrial sector that enter
                    the customs territory of the United States;
                        ``(E) exempting from the requirements of
                    subparagraph (D) such products that are the origin of--
                                ``(i) any country determined to meet any of
                            the standards provided in section 767(c);
                                ``(ii) any foreign country that the United
                            Nations has identified as among the least
                            developed of developing countries; or
                                ``(iii) any foreign country that the
                            President has determined to be responsible for
                            less than 0.5 percent of total global
                            greenhouse gas emissions and less than 5
                            percent of United States imports of covered
                            goods with respect to the eligible industrial
                            sector;
                        ``(F) specifying the procedures that U.S. Customs
                    and Border Protection will apply for the declaration
                    and entry of covered goods with respect to the eligible
                    industrial sector into the customs territory of the
                    United States; and
                        ``(G) establishing procedures that prevent
                    circumvention of the international reserve allowance
                    requirement for covered goods with respect to the
                    eligible industrial sector that are manufactured or
                    processed in more than one foreign country.
                ``(2) Purpose of program.--The Administrator shall
            establish the program under paragraph (1) consistent with
            international agreements to which the United States is a party,
            in a manner that minimizes the likelihood of carbon leakage as
            a result of differences between--
                        ``(A) the direct and indirect costs of complying
                    with section 722; and
                        ``(B) the direct and indirect costs, if any, of
                    complying in other countries with greenhouse gas
                    regulatory programs, requirements, export tariffs, or
                    other measures adopted or imposed to reduce greenhouse
                    gas emissions.
        ``(b) Emission Allowance Rebates.--In establishing a general
    methodology for purposes of subsection (a)(1)(C), the Administrator
    shall include an adjustment to the quantity of international reserve
    allowances based on the value of emission allowance rebates distributed
    under subpart 1 and the benefit received by the eligible industrial
    sector concerned from the provision of free allowances to electricity
    providers pursuant to section 782(a) and may, if appropriate, determine
    that the quantity of international reserve allowances should be reduced
    as low as to zero.
        ``(c) Effective Date.--The international reserve allowance program
    may not apply to imports of covered goods entering the customs
    territory of the United States before January 1, 2020.
        ``(d) Covered Entities.--International reserve allowances may not
    be used by covered entities to comply with section 722.

    ``SEC. 769. IRON AND STEEL SECTOR.

        ``For purposes of this subpart, the Administrator shall consider to
    be in the same eligible industrial sector--
                ``(1) entities using integrated iron and steelmaking
            technologies (including coke ovens, blast furnaces, and other
            iron-making technologies); and
                ``(2) entities using electric arc furnace technologies.''.

                  Subtitle B--Green Jobs and Worker Transition

                               PART 1--GREEN JOBS

    SEC. 421. CLEAN ENERGY CURRICULUM DEVELOPMENT GRANTS.

        (a) Authorization.--The Secretary of Education is authorized to
    award grants, on a competitive basis, to eligible partnerships to
    develop programs of study (containing the information described in
    section 122(c)(1)(A) of the Carl D. Perkins Career and Technical
    Education Act of 2006 (20 U.S.C. 2342)), that are focused on emerging
    careers and jobs in the fields of clean energy, renewable energy,
    energy efficiency, climate change mitigation, and climate change
    adaptation. The Secretary of Education shall consult with the Secretary
    of Labor and the Secretary of Energy prior to the issuance of a
    solicitation for grant applications.
        (b) Eligible Partnerships.--For purposes of this section, an
    eligible partnership shall include--
                (1) at least 1 local educational agency eligible for
            funding under section 131 of the Carl D. Perkins Career and
            Technical Education Act of 2006 (20 U.S.C. 2351) or an area
            career and technical education school or education service
            agency described in such section;
                (2) at least 1 postsecondary institution eligible for
            funding under section 132 of such Act (20 U.S.C. 2352); and
                (3) representatives of the community including business,
            labor organizations, and industry that have experience in
            fields as described in subsection (a).
        (c) Application.--An eligible partnership seeking a grant under
    this section shall submit an application to the Secretary at such time
    and in such manner as the Secretary may require. Applications shall
    include--
                (1) a description of the eligible partners and partnership,
            the roles and responsibilities of each partner, and a
            demonstration of each partner's capacity to support the
            program;
                (2) a description of the career area or areas within the
            fields as described in subsection (a) to be developed, the
            reason for the choice, and evidence of the labor market need to
            prepare students in that area;
                (3) a description of the new or existing program of study
            and both secondary and postsecondary components;
                (4) a description of the students to be served by the new
            program of study;
                (5) a description of how the program of study funded by the
            grant will be replicable and disseminated to schools outside of
            the partnership, including urban and rural areas;
                (6) a description of applied learning that will be
            incorporated into the program of study and how it will
            incorporate or reinforce academic learning;
                (7) a description of how the program of study will be
            delivered;
                (8) a description of how the program will provide
            accessibility to students, especially economically
            disadvantaged, low performing, and urban and rural students;
                (9) a description of how the program will address placement
            of students in nontraditional fields as described in section
            3(20) of the Carl D. Perkins Career and Technical Education Act
            of 2006 (20 U.S.C. 2302(20)); and
                (10) a description of how the applicant proposes to consult
            or has consulted with a labor organization, labor management
            partnership, apprenticeship program, or joint apprenticeship
            and training program that provides education and training in
            the field of study for which the applicant proposes to develop
            a curriculum.
        (d) Priority.--The Secretary shall give priority to applications
    that--
                (1) use online learning or other innovative means to
            deliver the program of study to students, educators, and
            instructors outside of the partnership; and
                (2) focus on low performing students and special
            populations as defined in section 3(29) of the Carl D. Perkins
            Career and Technical Education Act of 2006 (20 U.S.C.
            2302(29)).
        (e) Peer Review.--The Secretary shall convene a peer review process
    to review applications for grants under this section and to make
    recommendations regarding the selection of grantees. Members of the
    peer review committee shall include--
                (1) educators who have experience implementing curricula
            with comparable purposes; and
                (2) business and industry experts in fields as described in
            subsection (a).
        (f) Uses of Funds.--Grants awarded under this section shall be used
    for the development, implementation, and dissemination of programs of
    study (as described in section 122(c)(1)(A) of the Carl D. Perkins
    Career and Technical Education Act (20 U.S.C. 2342(c)(1)(A))) in career
    areas related to clean energy, renewable energy, energy efficiency,
    climate change mitigation, and climate change adaptation.

    SEC. 422. INCREASED FUNDING FOR ENERGY WORKER TRAINING PROGRAM.

        (a) Authorization.--Section 171(e)(8) of the Workforce Investment
    Act of 1998 (29 U.S.C. 2916(e)(8)) is amended by striking
    ``$125,000,000'' and inserting ``$150,000,000''.
        (b) Establishment of Fund.--There is hereby established in the
    Treasury a separate account that shall be known as the Energy
    Efficiency and Renewable Energy Worker Training Fund.
        (c) Availability of Amounts.--Subject to subtitle F of title IV,
    all amounts deposited into the Energy Efficiency and Renewable Energy
    Worker Training Fund shall be available to the Secretary to carry out
    section 171(e)(8) of the Workforce Investment Act of 1998 (29 U.S.C.
    2916(e)(8)) subject to further appropriation.

    SEC. 423. DEVELOPMENT OF INFORMATION AND RESOURCES CLEARINGHOUSE FOR
                  VOCATIONAL EDUCATION AND JOB TRAINING IN RENEWABLE ENERGY
                  SECTORS.

        (a) Development of Clearinghouse.--Not later than 18 months after
    the date of enactment of this Act, the Secretary of Labor, in
    collaboration with the Secretary of Energy and the Secretary of
    Education, shall develop an internet based information and resources
    clearinghouse to aid career and technical education and job training
    programs for the renewable energy sectors. In establishing the
    clearinghouse, the Secretary shall--
                (1) collect and provide information that addresses the
            consequences of rapid changes in technology and regional
            disparities for renewable energy training programs and provides
            best practices for training and education in light of such
            changes and disparities;
                (2) place an emphasis on facilitating collaboration between
            the renewable energy industry and job training programs and on
            identifying industry and technological trends and best
            practices, to better help job training programs maintain
            quality and relevance; and
                (3) place an emphasis on assisting programs that cater to
            high-demand middle-skill, trades, manufacturing, contracting,
            and consulting careers.
        (b) Solicitation and Consultation.--In developing the clearinghouse
    pursuant to subsection (a), the Secretary shall solicit information and
    expertise from businesses and organizations in the renewable energy
    sector and from institutions of higher education, career and technical
    schools, and community colleges that provide training in the renewable
    energy sectors. The Secretary shall solicit a comprehensive peer review
    of the clearinghouse by such entities not less than once every 2 years.
    Nothing in this subsection should be interpreted to require the
    divulgence of proprietary or competitive information.
        (c) Contents of Clearinghouse.--
                (1) Separate section for each renewable energy sector.--The
            clearinghouse shall contain separate sections developed for
            each of the following renewable energy sectors:
                        (A) Solar energy systems.
                        (B) Wind energy systems.
                        (C) Energy transmission systems.
                        (D) Geothermal systems of energy and heating.
                        (E) Energy efficiency technical training.
                (2) Additional requirements.--In addition to the
            information required in subsection (a), each section of the
            clearinghouse shall include information on basic environmental
            science and processes needed to understand renewable energy
            systems, Federal government and industry resources, and points
            of contact to aid institutions in the development of placement
            programs for apprenticeships and post graduation opportunities,
            and information and tips about a green workplace, energy
            efficiency, and relevant environmental topics and information
            on available industry recognized certifications in each area.
        (d) Dissemination.--The clearinghouse shall be made available via
    the Internet to the general public. Notice of the completed
    clearinghouse and any major revisions thereto shall also be provided--
                (1) to each Member of Congress; and
                (2) on the websites of the Departments of Education,
            Energy, and Labor.
        (e) Revision.--The Secretary of Labor shall revise and update the
    clearinghouse on a regular basis to ensure its relevance.

    SEC. 424. MONITORING PROGRAM EFFECTIVENESS.

        The Secretary of Labor shall monitor the potential growth of
    affected and displaced workers to ensure that the necessary funding
    continues to support the number of workers affected.

    SEC. 424A. GREEN CONSTRUCTION CAREERS DEMONSTRATION PROJECT.

        (a) Establishment and Authority.--The Secretary of Labor, in
    consultation with the Secretary of Energy, shall, not later than 180
    days after the enactment of this Act, establish a Green Construction
    Careers demonstration project by rules, regulations, and guidance in
    accordance with the provisions of this section. The purpose of the
    demonstration project shall be to promote middle class careers and
    quality employment practices in the green construction sector among
    targeted workers and to advance efficiency and performance on
    construction projects related to this Act. In order to advance these
    purposes, the Secretary shall identify projects, including residential
    retrofitting projects, funded directly by or assisted in whole or in
    part by or through the Federal Government pursuant to this Act or by
    any other entity established in accordance with this Act, to which all
    of the following shall apply.
        (b) Requirements.--The Secretaries may establish such terms and
    conditions for the demonstration projects as the Secretaries determine
    are necessary to meet the purposes of subsection (a), including
    establishing minimum proportions of hours to be worked by targeted
    workers on such projects. The Secretaries may require the contractors
    and subcontractors performing construction services on the project to
    comply with the terms and conditions as a condition of receiving
    funding or assistance from the Federal Government under this Act.
        (c) Evaluation.--The Secretaries shall evaluate the demonstration
    projects against the purposes of this section at the end of 3 years
    from initiation of the demonstration project. If the Secretaries
    determine that the demonstration projects have been successful, the
    Secretaries may identify further projects to which of the provisions of
    this section shall apply.
        (d) GAO Report.--The Comptroller General shall prepare and submit a
    report to the Committee on Health, Education, Labor and Pensions and
    the Committee on Energy and Natural Resources of the Senate and the
    Committee on Education and Labor and the Committee on Energy and
    Commerce of the House of Representatives not later than 5 years after
    the date of enactment of this Act, which shall advise the committees of
    the results of the demonstration projects and make appropriate
    recommendations.
        (e) Definition and Designation of Targeted Workers.--As used in
    this section, the term ``targeted worker'' means an individual who
    resides in the same labor market area (as defined in section 101(18) of
    the Workforce Investment Act of 1998 (29 U.S.C. 2801(18))) as the
    project and who--
                (1) is a member of a targeted group, within the meaning of
            section 51 of the Internal Revenue Code of 1986, other than an
            individual described in subsection (d)(1)(C) of such section;
                (2)(A) resides in a census tract in which not less than 20
            percent of the households have incomes below the Federal
            poverty guidelines; or
                        (B) is a member of a family that received a total
                    family income that, during the 2-year period prior to
                    employment on the project or admission to the pre-
                    apprenticeship program, did not exceed 200 percent of
                    the Federal poverty guidelines (exclusive of
                    unemployment compensation, child support payments,
                    payments described in section 101(25)(A) of the
                    Workforce Investment Act (29 U.S.C. 2801(25)(A)), and
                    old-age and survivors insurance benefits received under
                    section 202 of the Social Security Act (42 U.S.C. 402);
                    or
                (3) is a displaced homemaker, as such term is defined in
            section 3(10) of the Carl D. Perkins Career and Technical
            Education Act of 2006 (20 U.S.C. 2302(10)).
        (f) Qualified Pre-apprenticeship Program.--A qualified pre-
    apprenticeship program is a pre-apprenticeship program that has
    demonstrated an ability to recruit, train, and prepare for admission to
    apprenticeship programs individuals who are targeted workers.
        (g) Qualified Apprenticeship and Other Training Programs.--
                (1) Participation by each contractor required.--Each
            contractor and subcontractor that seeks to provide construction
            services on projects identified by the Secretaries pursuant to
            subsection (a) shall submit adequate assurances with its bid or
            proposal that it participates in a qualified apprenticeship or
            other training program, with a written arrangement with a
            qualified pre-apprenticeship program, for each craft or trade
            classification of worker that it intends to employ to perform
            work on the project.
                (2) Definition of qualified apprentice ship or other
            training program.--
                        (A) In general.--For purposes of this section, the
                    term ``qualified apprenticeship or other training
                    program'' means an apprenticeship or other training
                    program that qualifies as an employee welfare benefit
                    plan, as defined in section 3(1) of the Employee
                    Retirement Income Security Act of 1974 (29 U.S.C.
                    1002(1)).
                        (B) Certification of other programs in certain
                    localities.--In the event that the Secretary of Labor
                    certifies that a qualified apprenticeship or other
                    training program (as defined in subparagraph (A)) for a
                    craft or trade classification of workers that a
                    prospective contractor or subcontractor intends to
                    employ, is not operated in the locality where the
                    project will be performed, an apprenticeship or other
                    training program that is not an employee welfare
                    benefit plan (as defined in such section) may be
                    certified by the Secretary as a qualified
                    apprenticeship or other training program provided it is
                    registered with the Office of Apprenticeship of the
                    Department of Labor, or a State apprenticeship agency
                    recognized by the Office of Apprenticeship for Federal
                    purposes.
        (h) Facilitating Compliance.--The Secretary may require Federal
    contracting agencies, recipients of Federal assistance, and any other
    entity established in accordance with this Act to require contractors
    to enter into an agreement in a manner comparable with the standards
    set forth in sections 3 and 4 of Executive Order 13502 in order to
    achieve the purposes of this section, including any requirements
    established by subsection (b).
        (i) Limitation.--The requirements of this section shall not apply
    to any project funded under this Act in American Samoa, Guam, the
    Commonwealth of the Northern Mariana Islands, the Commonwealth of
    Puerto Rico, or the United States Virgin Islands, unless participation
    is requested by the governor of such territories within 1 year of the
    promulgation of rules under this Act.

              PART 2--CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE

    SEC. 425. PETITIONS, ELIGIBILITY REQUIREMENTS, AND DETERMINATIONS.

        (a) Petitions.--
                (1) Filing.--A petition for certification of eligibility to
            apply for adjustment assistance for a group of workers under
            this part may be filed by any of the following:
                        (A) The group of workers.
                        (B) The certified or recognized union or other duly
                    authorized representative of such workers.
                        (C) Employers of such workers, one-stop operators
                    or one-stop partners (as defined in section 101 of the
                    Workforce Investment Act of 1998 (29 U.S.C. 2801)),
                    including State employment security agencies, or the
                    State dislocated worker unit established under title I
                    of such Act, on behalf of such workers.
            The petition shall be filed simultaneously with the Secretary
            of Labor and with the Governor of the State in which such
            workers' employment site is located.
                (2) Action by governors.--Upon receipt of a petition filed
            under paragraph (1), the Governor shall--
                        (A) ensure that rapid response activities and
                    appropriate core and intensive services (as described
                    in section 134 of the Workforce Investment Act of 1998
                    (29 U.S.C. 2864)) authorized under other Federal laws
                    are made available to the workers covered by the
                    petition to the extent authorized under such laws; and
                        (B) assist the Secretary in the review of the
                    petition by verifying such information and providing
                    such other assistance as the Secretary may request.
                (3) Action by the secretary.--Upon receipt of the petition,
            the Secretary shall promptly publish notice in the Federal
            Register and on the website of the Department of Labor that the
            Secretary has received the petition and initiated an
            investigation.
                (4) Hearings.--If the petitioner, or any other person found
            by the Secretary to have a substantial interest in the
            proceedings, submits not later than 10 days after the date of
            the Secretary's publication under paragraph (3) a request for a
            hearing, the Secretary shall provide for a public hearing and
            afford such interested persons an opportunity to be present, to
            produce evidence, and to be heard.
        (b) Eligibility.--
                (1) In general.--A group of workers shall be certified by
            the Secretary as eligible to apply for adjustment assistance
            under this part pursuant to a petition filed under subsection
            (a) if--
                        (A) the group of workers is employed in--
                                (i) energy producing and transforming
                            industries;
                                (ii) industries dependent upon energy
                            industries;
                                (iii) energy-intensive manufacturing
                            industries;
                                (iv) consumer goods manufacturing; or
                                (v) other industries whose employment the
                            Secretary determines has been adversely
                            affected by any requirement of title VII of the
                            Clean Air Act;
                        (B) the Secretary determines that a significant
                    number or proportion of the workers in such workers'
                    employment site have become totally or partially
                    separated, or are threatened to become totally or
                    partially separated from employment; and
                        (C) the sales, production, or delivery of goods or
                    services have decreased as a result of any requirement
                    of title VII of the Clean Air Act, including--
                                (i) the shift from reliance upon fossil
                            fuels to other sources of energy, including
                            renewable energy, that results in the closing
                            of a facility or layoff of employees at a
                            facility that mines, produces, processes, or
                            utilizes fossil fuels to generate electricity;
                                (ii) a substantial increase in the cost of
                            energy required for a manufacturing facility to
                            produce items whose prices are competitive in
                            the marketplace, to the extent the cost is not
                            offset by allowance allocation to the facility
                            pursuant to title VII of the Clean Air Act; or
                                (iii) other documented occurrences that the
                            Secretary determines are indicators of an
                            adverse impact on an industry described in
                            subparagraph (A) as a result of any requirement
                            of title VII of the Clean Air Act.
                (2) Workers in public agencies.--A group of workers in a
            public agency shall be certified by the Secretary as eligible
            to apply for climate change adjustment assistance pursuant to a
            petition filed if the Secretary determines that a significant
            number or proportion of the workers in the public agency have
            become totally or partially separated from employment, or are
            threatened to become totally or partially separated as a result
            of any requirement of title VII of the Clean Air Act.
                (3) Adversely affected service workers.--A group of workers
            shall be certified as eligible to apply for climate change
            adjustment assistance pursuant to a petition filed if the
            Secretary determines that--
                        (A) a significant number or proportion of the
                    service workers at an employment site where a group of
                    workers has been certified by the Secretary as eligible
                    to apply for adjustment assistance under this part
                    pursuant to paragraph (1) have become totally or
                    partially separated from employment, or are threatened
                    to become totally or partially separated; and
                        (B) a loss of business in the firm providing
                    service workers to an employment site is directly
                    attributable to one or more of the documented
                    occurrences listed in paragraph (1)(C).
        (c) Authority to Investigate and Collect Information.--
                (1) In general.--The Secretary shall, in determining
            whether to certify a group of workers under subsection (d),
            obtain information the Secretary determines to be necessary to
            make the certification, through questionnaires and in such
            other manner as the Secretary determines appropriate from--
                        (A) the workers' employer;
                        (B) officials of certified or recognized unions or
                    other duly authorized representatives of the group of
                    workers; or
                        (C) one-stop operators or one-stop partners (as
                    defined in section 101 of the Workforce Investment Act
                    of 1998 (29 U.S.C. 2801)); or
                (2) Verification of information.--The Secretary shall
            require an employer, union, or one-stop operator or partner to
            certify all information obtained under paragraph (1) from the
            employer, union, or one-stop operator or partner (as the case
            may be) on which the Secretary relies in making a determination
            under subsection (d), unless the Secretary has a reasonable
            basis for determining that such information is accurate and
            complete without being certified.
                (3) Protection of confidential information.--The Secretary
            may not release information obtained under paragraph (1) that
            the Secretary considers to be confidential business information
            unless the employer submitting the confidential business
            information had notice, at the time of submission, that the
            information would be released by the Secretary, or the employer
            subsequently consents to the release of the information.
            Nothing in this paragraph shall be construed to prohibit the
            Secretary from providing such confidential business information
            to a court in camera or to another party under a protective
            order issued by a court.
        (d) Determination by the Secretary of Labor.--
                (1) In general.--As soon as possible after the date on
            which a petition is filed under subsection (a), but in any
            event not later than 40 days after that date, the Secretary, in
            consultation with the Secretary of Energy and the
            Administrator, as necessary, shall determine whether the
            petitioning group meets the requirements of subsection (b) and
            shall issue a certification of eligibility to apply for
            assistance under this part covering workers in any group which
            meets such requirements. Each certification shall specify the
            date on which the total or partial separation began or
            threatened to begin. Upon reaching a determination on a
            petition, the Secretary shall promptly publish a summary of the
            determination in the Federal Register and on the website of the
            Department of Labor, together with the Secretary's reasons for
            making such determination.
                (2) One year limitation.--A certification under this
            section shall not apply to any worker whose last total or
            partial separation from the employment site before the worker's
            application under section 426(a) occurred more than 1 year
            before the date of the petition on which such certification was
            granted.
                (3) Revocation of certification.--Whenever the Secretary
            determines, with respect to any certification of eligibility of
            the workers of an employment site, that total or partial
            separations from such site are no longer a result of the
            factors specified in subsection (b)(1), the Secretary shall
            terminate such certification and promptly have notice of such
            termination published in the Federal Register and on the
            website of the Department of Labor, together with the
            Secretary's reasons for making such determination. Such
            termination shall apply only with respect to total or partial
            separations occurring after the termination date specified by
            the Secretary.
        (e) Industry Notification of Assistance.--Upon receiving a
    notification of a determination under subsection (d) with respect to a
    domestic industry the Secretary of Labor shall notify the
    representatives of the domestic industry affected by the determination,
    employers publicly identified by name during the course of the
    proceeding relating to the determination, and any certified or
    recognized union or, to the extent practicable, other duly authorized
    representative of workers employed by such representatives of the
    domestic industry, of--
                (1) the adjustment allowances, training, and other benefits
            available under this part;
                (2) the manner in which to file a petition and apply for
            such benefits; and
                (3) the availability of assistance in filing such
            petitions;
                (4) notify the Governor of each State in which one or more
            employers in such industry are located of the Secretary's
            determination and the identity of the employers; and
                (5) upon request, provide any assistance that is necessary
            to file a petition under subsection (a).
        (f) Benefit Information to Workers, Providers of Training.--
                (1) In general.--The Secretary shall provide full
            information to workers about the adjustment allowances,
            training, and other benefits available under this part and
            about the petition and application procedures, and the
            appropriate filing dates, for such allowances, training and
            services. The Secretary shall provide whatever assistance is
            necessary to enable groups of workers to prepare petitions or
            applications for program benefits. The Secretary shall make
            every effort to insure that cooperating State agencies fully
            comply with the agreements entered into under section 426(a)
            and shall periodically review such compliance. The Secretary
            shall inform the State Board for Vocational Education or
            equivalent agency, the one-stop operators or one-stop partners
            (as defined in section 101 of the Workforce Investment Act of
            1998 (29 U.S.C. 2801), and other public or private agencies,
            institutions, and employers, as appropriate, of each
            certification issued under subsection (d) and of projections,
            if available, of the needs for training under as a result of
            such certification.
                (2) Notice by mail.--The Secretary shall provide written
            notice through the mail of the benefits available under this
            part to each worker whom the Secretary has reason to believe is
            covered by a certification made under subsection (d)--
                        (A) at the time such certification is made, if the
                    worker was partially or totally separated from the
                    adversely affected employment before such
                    certification, or--
                        (B) at the time of the total or partial separation
                    of the worker from the adversely affected employment,
                    if subparagraph (A) does not apply.
                (3) Newspapers; website.--The Secretary shall publish
            notice of the benefits available under this part to workers
            covered by each certification made under subsection (d) in
            newspapers of general circulation in the areas in which such
            workers reside and shall make such information available on the
            website of the Department of Labor.

    SEC. 426. PROGRAM BENEFITS.

        (a) Climate Change Adjustment Allowance.--
                (1) Eligibility.--Payment of a climate change adjustment
            allowance shall be made to an adversely affected worker covered
            by a certification under section 425(b) who files an
            application for such allowance for any week of unemployment
            which begins on or after the date of such certification, if the
            following conditions are met:
                        (A) Such worker's total or partial separation
                    before the worker's application under this part
                    occurred--
                                (i) on or after the date, as specified in
                            the certification under which the worker is
                            covered, on which total or partial separation
                            began or threatened to begin in the adversely
                            affected employment;
                                (ii) before the expiration of the 2-year
                            period beginning on the date on which the
                            determination under section 425(d) was made;
                            and
                                (iii) before the termination date, if any,
                            determined pursuant to section 425(d)(3).
                        (B) Such worker had, in the 52-week period ending
                    with the week in which such total or partial separation
                    occurred, at least 26 weeks of full-time employment or
                    1,040 hours of part time employment in adversely
                    affected employment, or, if data with respect to weeks
                    of employment are not available, equivalent amounts of
                    employment computed under regulations prescribed by the
                    Secretary. For the purposes of this paragraph, any week
                    in which such worker--
                                (i) is on employer-authorized leave for
                            purposes of vacation, sickness, injury,
                            maternity, or inactive duty or active duty
                            military service for training;
                                (ii) does not work because of a disability
                            that is compensable under a workmen's
                            compensation law or plan of a State or the
                            United States;
                                (iii) had his employment interrupted in
                            order to serve as a full-time representative of
                            a labor organization in such firm; or
                                (iv) is on call-up for purposes of active
                            duty in a reserve status in the Armed Forces of
                            the United States, provided such active duty is
                            ``Federal service'' as defined in section
                            8521(a)(1) of title 5, United States Code,
                    shall be treated as a week of employment.
                        (C) Such worker is enrolled in a training program
                    approved by the Secretary under subsection (b)(2).
                (2) Ineligibility for certain other benefits.--An adversely
            affected worker receiving a payment under this section shall be
            ineligible to receive any other form of unemployment insurance
            for the period in which such worker is receiving a climate
            change adjustment allowance under this section.
                (3) Revocation.--If--
                        (A) the Secretary determines that--
                                (i) the adversely affected worker--
                                        (I) has failed to begin
                                    participation in the training program
                                    the enrollment in which meets the
                                    requirement of paragraph (1)(C); or
                                        (II) has ceased to participate in
                                    such training program before completing
                                    such training program; and
                                (ii) there is no justifiable cause for such
                            failure or cessation; or
                        (B) the certification made with respect to such
                    worker under section 425(d) is revoked under paragraph
                    (3) of such section,
            no adjustment allowance may be paid to the adversely affected
            worker under this part for the week in which such failure,
            cessation, or revocation occurred, or any succeeding week,
            until the adversely affected worker begins or resumes
            participation in a training program approved by the Secretary
            under section (b)(2).
                (4) Waivers of training requirements.--The Secretary may
            issue a written statement to an adversely affected worker
            waiving the requirement to be enrolled in training described in
            subsection (b)(2) if the Secretary determines that it is not
            feasible or appropriate for the worker, because of 1 or more of
            the following reasons:
                        (A) Recall.--The worker has been notified that the
                    worker will be recalled by the employer from which the
                    separation occurred.
                        (B) Marketable skills.--
                                (i) In general.--The worker possesses
                            marketable skills for suitable employment (as
                            determined pursuant to an assessment of the
                            worker, which may include the profiling system
                            under section 303(j) of the Social Security Act
                            (42 U.S.C. 503(j)), carried out in accordance
                            with guidelines issued by the Secretary) and
                            there is a reasonable expectation of employment
                            at equivalent wages in the foreseeable future.
                                (ii) Marketable skills defined.--For
                            purposes of clause (i), the term ``marketable
                            skills'' may include the possession of a
                            postgraduate degree from an institution of
                            higher education (as defined in section 102 of
                            the Higher Education Act of 1965 (20 U.S.C.
                            1002)) or an equivalent institution, or the
                            possession of an equivalent postgraduate
                            certification in a specialized field.
                        (C) Retirement.--The worker is within 2 years of
                    meeting all requirements for entitlement to either--
                                (i) old-age insurance benefits under title
                            II of the Social Security Act (42 U.S.C. 401 et
                            seq.) (except for application therefor); or
                                (ii) a private pension sponsored by an
                            employer or labor organization.
                        (D) Health.--The worker is unable to participate in
                    training due to the health of the worker, except that a
                    waiver under this subparagraph shall not be construed
                    to exempt a worker from requirements relating to the
                    availability for work, active search for work, or
                    refusal to accept work under Federal or State
                    unemployment compensation laws.
                        (E) Enrollment unavailable.--The first available
                    enrollment date for the training of the worker is
                    within 60 days after the date of the determination made
                    under this paragraph, or, if later, there are
                    extenuating circumstances for the delay in enrollment,
                    as determined pursuant to guidelines issued by the
                    Secretary.
                        (F) Training not available.--Training described in
                    subsection (b)(2) is not reasonably available to the
                    worker from either governmental agencies or private
                    sources (which may include area career and technical
                    education schools, as defined in section 3 of the Carl
                    D. Perkins Career and Technical Education Act of 2006
                    (20 U.S.C. 2302), and employers), no training that is
                    suitable for the worker is available at a reasonable
                    cost, or no training funds are available.
                (5) Weekly amounts.--The climate change adjustment
            allowance payable to an adversely affected worker for a week of
            unemployment shall be an amount equal to 70 percent of the
            average weekly wage of such worker, but in no case shall such
            amount exceed the average weekly wage for all workers in the
            State where the adversely affected worker resides.
                (6) Maximum duration of benefits.--An eligible worker may
            receive a climate change adjustment allowance under this
            subsection for a period of not longer than 156 weeks.
        (b) Employment Services and Training.--
                (1) Information and employment services.--The Secretary
            shall make available, directly or through agreements with the
            States under section 427(a) to adversely affected workers
            covered by a certification under section 425(a) the following
            information and employment services:
                        (A) Comprehensive and specialized assessment of
                    skill levels and service needs, including through--
                                (i) diagnostic testing and use of other
                            assessment tools; and
                                (ii) in-depth interviewing and evaluation
                            to identify employment barriers and appropriate
                            employment goals.
                        (B) Development of an individual employment plan to
                    identify employment goals and objectives, and
                    appropriate training to achieve those goals and
                    objectives.
                        (C) Information on training available in local and
                    regional areas, information on individual counseling to
                    determine which training is suitable training, and
                    information on how to apply for such training.
                        (D) Information on training programs and other
                    services provided by a State pursuant to title I of the
                    Workforce Investment Act of 1998 and available in local
                    and regional areas, information on individual
                    counseling to determine which training is suitable
                    training, and information on how to apply for such
                    training.
                        (E) Information on how to apply for financial aid,
                    including referring workers to educational opportunity
                    centers described in section 402F of the Higher
                    Education Act of 1965 (20 U.S.C. 1070a-16), where
                    applicable, and notifying workers that the workers may
                    request financial aid administrators at institutions of
                    higher education (as defined in section 102 of such Act
                    (20 U.S.C. 1002)) to use the administrators' discretion
                    under section 479A of such Act (20 U.S.C. 1087tt) to
                    use current year income data, rather than preceding
                    year income data, for determining the amount of need of
                    the workers for Federal financial assistance under
                    title IV of such Act (20 U.S.C. 1070 et seq.).
                        (F) Short-term prevocational services, including
                    development of learning skills, communications skills,
                    interviewing skills, punctuality, personal maintenance
                    skills, and professional conduct to prepare individuals
                    for employment or training.
                        (G) Individual career counseling, including job
                    search and placement counseling, during the period in
                    which the individual is receiving a climate change
                    adjustment allowance or training under this part, and
                    after receiving such training for purposes of job
                    placement.
                        (H) Provision of employment statistics information,
                    including the provision of accurate information
                    relating to local, regional, and national labor market
                    areas, including--
                                (i) job vacancy listings in such labor
                            market areas;
                                (ii) information on jobs skills necessary
                            to obtain jobs identified in job vacancy
                            listings described in subparagraph (A);
                                (iii) information relating to local
                            occupations that are in demand and earnings
                            potential of such occupations; and
                                (iv) skills requirements for local
                            occupations described in subparagraph (C).
                        (I) Information relating to the availability of
                    supportive services, including services relating to
                    child care, transportation, dependent care, housing
                    assistance, and need-related payments that are
                    necessary to enable an individual to participate in
                    training.
                (2) Training.--
                        (A) Approval of and payment for training.--If the
                    Secretary determines, with respect to an adversely
                    affected worker that--
                                (i) there is no suitable employment (which
                            may include technical and professional
                            employment) available for an adversely affected
                            worker;
                                (ii) the worker would benefit from
                            appropriate training;
                                (iii) there is a reasonable expectation of
                            employment following completion of such
                            training;
                                (iv) training approved by the Secretary is
                            reasonably available to the worker from either
                            governmental agencies or private sources
                            (including area career and technical education
                            schools, as defined in section 3 of the Carl D.
                            Perkins Career and Technical Education Act of
                            2006, and employers);
                                (v) the worker is qualified to undertake
                            and complete such training; and
                                (vi) such training is suitable for the
                            worker and available at a reasonable cost,
                    the Secretary shall approve such training for the
                    worker. Upon such approval, the worker shall be
                    entitled to have payment of the costs of such training
                    (subject to the limitations imposed by this section)
                    paid on the worker's behalf by the Secretary directly
                    or through a voucher system.
                        (B) Distribution.--The Secretary shall establish
                    procedures for the distribution of the funds to States
                    to carry out the training programs approved under this
                    paragraph, and shall make an initial distribution of
                    the funds made available as soon as practicable after
                    the beginning of each fiscal year.
                        (C) Additional rules regarding approval of and
                    payment for training.--
                                (i) For purposes of applying subparagraph
                            (A)(iii), a reasonable expectation of
                            employment does not require that employment
                            opportunities for a worker be available, or
                            offered, immediately upon the completion of
                            training approved under such subparagraph.
                                (ii) If the costs of training an adversely
                            affected worker are paid by the Secretary under
                            subparagraph (A), no other payment for such
                            costs may be made under any other provision of
                            Federal law. No payment may be made under
                            subparagraph (A) of the costs of training an
                            adversely affected worker or an adversely
                            affected incumbent worker if such costs--
                                        (I) have already been paid under
                                    any other provision of Federal law; or
                                        (II) are reimbursable under any
                                    other provision of Federal law and a
                                    portion of such costs have already been
                                    paid under such other provision of
                                    Federal law.
                            The provisions of this clause shall not apply
                            to, or take into account, any funds provided
                            under any other provision of Federal law which
                            are used for any purpose other than the direct
                            payment of the costs incurred in training a
                            particular adversely affected worker, even if
                            such use has the effect of indirectly paying or
                            reducing any portion of the costs involved in
                            training the adversely affected worker.
                        (D) Training programs.--The training programs that
                    may be approved under subparagraph (A) include--
                                (i) employer-based training, including--
                                        (I) on-the-job training if approved
                                    by the Secretary under subsection (c);
                                    and
                                        (II) joint labor-management
                                    apprenticeship programs;
                                (ii) any training program provided by a
                            State pursuant to title I of the Workforce
                            Investment Act of 1998;
                                (iii) any training program approved by a
                            private industry council established under
                            section 102 of such Act;
                                (iv) any programs in career and technical
                            education described in section 3(5) of the Carl
                            D. Perkins Career and Technical Education Act
                            of 2006;
                                (v) any program of remedial education;
                                (vi) any program of prerequisite education
                            or coursework required to enroll in training
                            that may be approved under this paragraph;
                                (vii) any training program for which all,
                            or any portion, of the costs of training the
                            worker are paid--
                                        (I) under any Federal or State
                                    program other than this part; or
                                        (II) from any source other than
                                    this part;
                                (viii) any training program or coursework
                            at an accredited institution of higher
                            education (described in section 102 of the
                            Higher Education Act of 1965 (20 U.S.C. 1002)),
                            including a training program or coursework for
                            the purpose of--
                                        (I) obtaining a degree or
                                    certification; or
                                        (II) completing a degree or
                                    certification that the worker had
                                    previously begun at an accredited
                                    institution of higher education; and
                                (ix) any other training program approved by
                            the Secretary.
        (3) Supplemental assistance.--The Secretary may, as appropriate,
    authorize supplemental assistance that is necessary to defray
    reasonable transportation and subsistence expenses for separate
    maintenance in a case in which training for a worker is provided in a
    facility that is not within commuting distance of the regular place of
    residence of the worker.
        (c) On-the-Job Training Requirements.--
                (1) In general.--The Secretary may approve on-the-job
            training for any adversely affected worker if--
                        (A) the Secretary determines that on-the-job
                    training--
                                (i) can reasonably be expected to lead to
                            suitable employment with the employer offering
                            the on-the-job training;
                                (ii) is compatible with the skills of the
                            worker;
                                (iii) includes a curriculum through which
                            the worker will gain the knowledge or skills to
                            become proficient in the job for which the
                            worker is being trained; and
                                (iv) can be measured by benchmarks that
                            indicate that the worker is gaining such
                            knowledge or skills; and
                        (B) the State determines that the on-the-job
                    training program meets the requirements of clauses
                    (iii) and (iv) of subparagraph (A).
                (2) Monthly payments.--The Secretary shall pay the costs of
            on-the-job training approved under paragraph (1) in monthly
            installments.
                (3) Contracts for on-the-job training.--
                        (A) In general.--The Secretary shall ensure, in
                    entering into a contract with an employer to provide
                    on-the-job training to a worker under this subsection,
                    that the skill requirements of the job for which the
                    worker is being trained, the academic and occupational
                    skill level of the worker, and the work experience of
                    the worker are taken into consideration.
                        (B) Term of contract.--Training under any such
                    contract shall be limited to the period of time
                    required for the worker receiving on-the-job training
                    to become proficient in the job for which the worker is
                    being trained, but may not exceed 156 weeks in any
                    case.
                (4) Exclusion of certain employers.--The Secretary shall
            not enter into a contract for on-the-job training with an
            employer that exhibits a pattern of failing to provide workers
            receiving on-the-job training from the employer with--
                        (A) continued, long-term employment as regular
                    employees; and
                        (B) wages, benefits, and working conditions that
                    are equivalent to the wages, benefits, and working
                    conditions provided to regular employees who have
                    worked a similar period of time and are doing the same
                    type of work as workers receiving on-the-job training
                    from the employer.
        (d) Administrative and Employment Services Funding.--
                (1) Administrative funding.--In addition to any funds made
            available to a State to carry out this section for a fiscal
            year, the State shall receive for the fiscal year a payment in
            an amount that is equal to 15 percent of the amount of such
            funds and shall--
                        (A) use not more than \2/3\ of such payment for the
                    administration of the climate change adjustment
                    assistance for workers program under this part,
                    including for--
                                (i) processing waivers of training
                            requirements under subsection (a)(4);
                                (ii) collecting, validating, and reporting
                            data required under this part; and
                                (iii) administering the Climate Change
                            Adjustment Assistance Allowance payments; and
                        (B) use not less than \1/3\ of such payment for
                    information and employment services under subsection
                    (b)(1).
                (2) Employment services funding.--
                        (A) In general.--In addition to any funds made
                    available to a State to carry out subsection (b)(2) and
                    the payment under paragraph (1) for a fiscal year, the
                    Secretary shall provide to the State for the fiscal
                    year a reasonable payment for the purpose of providing
                    employment and services under subsection (b)(1).
                        (B) Voluntary return of funds.--A State that
                    receives a payment under subparagraph (A) may decline
                    or otherwise return such payment to the Secretary.
        (e) Job Search Allowances.--The Secretary of Labor may provide
    adversely affected workers a one-time job search allowance in
    accordance with regulations prescribed by the Secretary. Any job search
    allowance provided shall be available only under the following
    circumstances and conditions:
                (1) The worker is no longer eligible for the climate change
            adjustment allowance under subsection (a) and has completed the
            training program required by subsection (a)(1)(E).
                (2) The Secretary determines that the worker cannot
            reasonably be expected to secure suitable employment in the
            commuting area in which the worker resides.
                (3) An allowance granted shall provide reimbursement to the
            worker of all necessary job search expenses as prescribed by
            the Secretary in regulations. Such reimbursement under this
            subsection may not exceed $1,500 for any worker.
        (f) Relocation Allowance Authorized.--
                (1) In general.--Any adversely affected worker covered by a
            certification issued under section 425 may file an application
            for a relocation allowance with the Secretary, and the
            Secretary may grant the relocation allowance, subject to the
            terms and conditions of this subsection.
                (2) Conditions for granting allowance.--A relocation
            allowance may be granted if all of the following terms and
            conditions are met:
                        (A) Assist an adversely affected worker.--The
                    relocation allowance will assist an adversely affected
                    worker in relocating within the United States.
                        (B) Local employment not available.--The Secretary
                    determines that the worker cannot reasonably be
                    expected to secure suitable employment in the commuting
                    area in which the worker resides.
                        (C) Total separation.--The worker is totally
                    separated from employment at the time relocation
                    commences.
                        (D) Suitable employment obtained.--The worker--
                                (i) has obtained suitable employment
                            affording a reasonable expectation of long-term
                            duration in the area in which the worker wishes
                            to relocate; or
                                (ii) has obtained a bona fide offer of such
                            employment.
                        (E) Application.--The worker filed an application
                    with the Secretary at such time and in such manner as
                    the Secretary shall specify by regulation.
                (3) Amount of allowance.--The relocation allowance granted
            to a worker under paragraph (1) includes--
                        (A) all reasonable and necessary expenses
                    (including, subsistence and transportation expenses at
                    levels not exceeding amounts prescribed by the
                    Secretary in regulations) incurred in transporting the
                    worker, the worker's family, and household effects; and
                        (B) a lump sum equivalent to 3 times the worker's
                    average weekly wage, up to a maximum payment of $1,500.
                (4) Limitations.--A relocation allowance may not be granted
            to a worker unless--
                        (A) the relocation occurs within 182 days after the
                    filing of the application for relocation assistance; or
                        (B) the relocation occurs within 182 days after the
                    conclusion of training, if the worker entered a
                    training program approved by the Secretary under
                    subsection (b)(2).
        (g) Health Insurance Continuation.--Not later than 1 year after the
    date of enactment of this part, the Secretary of Labor shall prescribe
    regulations to provide, for the period in which an adversely affected
    worker is participating in a training program described in subsection
    (b)(2), 80 percent of the monthly premium of any health insurance
    coverage that an adversely affected worker was receiving from such
    worker's employer prior to the separation from employment described in
    section 425(b), to be paid to any health care insurance plan designated
    by the adversely affected worker receiving an allowance under this
    section.

    SEC. 427. GENERAL PROVISIONS.

        (a) Agreements With States.--
                (1) In general.--The Secretary is authorized on behalf of
            the United States to enter into an agreement with any State, or
            with any State agency (referred to in this section as
            ``cooperating States'' and ``cooperating States agencies''
            respectively). Under such an agreement, the cooperating State
            agency--
                        (A) as agent of the United States, shall receive
                    applications for, and shall provide, payments on the
                    basis provided in this part;
                        (B) in accordance with paragraph (6), shall make
                    available to adversely affected workers covered by a
                    certification under section 425(d) the employment
                    services described in section 426(b)(1);
                        (C) shall make any certifications required under
                    section 425(d);
                        (D) shall otherwise cooperate with the Secretary
                    and with other State and Federal agencies in providing
                    payments and services under this part.
            Each agreement under this section shall provide the terms and
            conditions upon which the agreement may be amended, suspended,
            or terminated.
                (2) Form and manner of data.--Each agreement under this
            section shall--
                        (A) provide the Secretary with the authority to
                    collect any data the Secretary determines necessary to
                    meet the requirements of this part; and
                        (B) specify the form and manner in which any such
                    data requested by the Secretary shall be reported.
                (3) Relationship to unemployment insurance.--Each agreement
            under this section shall provide that an adversely affected
            worker receiving a climate change adjustment allowance under
            this part shall not be eligible for unemployment insurance
            otherwise payable to such worker under the laws of the State.
                (4) Review.--A determination by a cooperating State agency
            with respect to entitlement to program benefits under an
            agreement is subject to review in the same manner and to the
            same extent as determinations under the applicable State law
            and only in that manner and to that extent.
                (5) Coordination.--Any agreement entered into under this
            section shall provide for the coordination of the
            administration of the provisions for employment services,
            training, and supplemental assistance under section 426 and
            under title I of the Workforce Investment Act of 1998 upon such
            terms and conditions as are established by the Secretary in
            consultation with the States and set forth in such agreement.
            Any agency of the State jointly administering such provisions
            under such agreement shall be considered to be a cooperating
            State agency for purposes of this part.
                (6) Responsibilities of cooperating agencies.--Each
            cooperating State agency shall, in carrying out paragraph
            (1)(B)--
                        (A) advise each worker who applies for unemployment
                    insurance of the benefits under this part and the
                    procedures and deadlines for applying for such
                    benefits;
                        (B) facilitate the early filing of petitions under
                    section 425(a) for any workers that the agency
                    considers are likely to be eligible for benefits under
                    this part;
                        (C) advise each adversely affected worker to apply
                    for training under section 426(b) before, or at the
                    same time, the worker applies for climate change
                    adjustment allowances under section 426(a);
                        (D) perform outreach to, intake of, and orientation
                    for adversely affected workers and adversely affected
                    incumbent workers covered by a certification under
                    section 426(a) with respect to assistance and benefits
                    available under this part;
                        (E) make employment services described in section
                    426(b)(1) available to adversely affected workers and
                    adversely affected incumbent workers covered by a
                    certification under section 425(d) and, if funds
                    provided to carry out this part are insufficient to
                    make such services available, make arrangements to make
                    such services available through other Federal programs;
                    and
                        (F) provide the benefits and reemployment services
                    under this part in a manner that is necessary for the
                    proper and efficient administration of this part,
                    including the use of state agency personnel employed in
                    accordance with a merit system of personnel
                    administration standards, including--
                                (i) making determinations of eligibility
                            for, and payment of, climate change
                            readjustment allowances and health care benefit
                            replacement amounts;
                                (ii) developing recommendations regarding
                            payments as a bridge to retirement and lump sum
                            payments to pension plans in accordance with
                            this subsection; and
                                (iii) the provision of reemployment
                            services to eligible workers, including
                            referral to training services.
                (7) In order to promote the coordination of workforce
            investment activities in each State with activities carried out
            under this part, any agreement entered into under this section
            shall provide that the State shall submit to the Secretary, in
            such form as the Secretary may require, the description and
            information described in paragraphs (8) and (14) of section
            112(b) of the Workforce Investment Act of 1998 (29 U.S.C.
            2822(b)) and a description of the State's rapid response
            activities under section 221(a)(2)(A).
                (8) Control measures.--
                        (A) In general.--The Secretary shall require each
                    cooperating State and cooperating State agency to
                    implement effective control measures and to effectively
                    oversee the operation and administration of the climate
                    change adjustment assistance program under this part,
                    including by means of monitoring the operation of
                    control measures to improve the accuracy and timeliness
                    of the data being collected and reported.
                        (B) Definition.--For purposes of subparagraph (A),
                    the term ``control measures'' means measures that--
                                (i) are internal to a system used by a
                            State to collect data; and
                                (ii) are designed to ensure the accuracy
                            and verifiability of such data.
                (9) Data reporting.--
                        (A) In general.--Any agreement entered into under
                    this section shall require the cooperating State or
                    cooperating State agency to report to the Secretary on
                    a quarterly basis comprehensive performance
                    accountability data, to consist of--
                                (i) the core indicators of performance
                            described in subparagraph (B)(i);
                                (ii) the additional indicators of
                            performance described in subparagraph (B)(ii),
                            if any; and
                                (iii) a description of efforts made to
                            improve outcomes for workers under the climate
                            change adjustment assistance program.
                        (B) Core indicators described.--
                                (i) In general.--The core indicators of
                            performance described in this subparagraph
                            are--
                                        (I) the percentage of workers
                                    receiving benefits under this part who
                                    are employed during the second calendar
                                    quarter following the calendar quarter
                                    in which the workers cease receiving
                                    such benefits;
                                        (II) the percentage of such workers
                                    who are employed in each of the third
                                    and fourth calendar quarters following
                                    the calendar quarter in which the
                                    workers cease receiving such benefits;
                                    and
                                        (III) the earnings of such workers
                                    in each of the third and fourth
                                    calendar quarters following the
                                    calendar quarter in which the workers
                                    cease receiving such benefits.
                                (ii) Additional indicators.--The Secretary
                            and a cooperating State or cooperating State
                            agency may agree upon additional indicators of
                            performance for the climate change adjustment
                            assistance program under this part, as
                            appropriate.
                        (C) Standards with respect to reliability of
                    data.--In preparing the quarterly report required by
                    subparagraph (A), each cooperating State or cooperating
                    State agency shall establish procedures that are
                    consistent with guidelines to be issued by the
                    Secretary to ensure that the data reported are valid
                    and reliable.
                (10) Verification of eligibility for program benefits.--
                        (A) In general.--An agreement under this section
                    shall provide that the State shall periodically
                    redetermine that a worker receiving benefits under this
                    part who is not a citizen or national of the United
                    States remains in a satisfactory immigration status.
                    Once satisfactory immigration status has been initially
                    verified through the immigration status verification
                    system described in section 1137(d) of the Social
                    Security Act (42 U.S.C. 1320b-7(d)) for purposes of
                    establishing a worker's eligibility for unemployment
                    compensation, the State shall reverify the worker's
                    immigration status if the documentation provided during
                    initial verification will expire during the period in
                    which that worker is potentially eligible to receive
                    benefits under this part. The State shall conduct such
                    redetermination in a timely manner, utilizing the
                    immigration status verification system described in
                    section 1137(d) of the Social Security Act (42 U.S.C.
                    1320b-7(d)).
                        (B) Procedures.--The Secretary shall establish
                    procedures to ensure the uniform application by the
                    States of the requirements of this paragraph.
        (b) Administration Absent State Agreement.--
                (1) In any State where there is no agreement in force
            between a State or its agency under subsection (a), the
            Secretary shall promulgate regulations for the performance of
            all necessary functions under section 426, including provision
            for a fair hearing for any worker whose application for
            payments is denied.
                (2) A final determination under paragraph (1) with respect
            to entitlement to program benefits under section 426 is subject
            to review by the courts in the same manner and to the same
            extent as is provided by section 205(g) of the Social Security
            Act (42 U.S.C. 405(g)).
        (c) Prohibition on Contracting With Private Entities.--Neither the
    Secretary nor a State may contract with any private for-profit or
    nonprofit entity for the administration of the climate change
    adjustment assistance program under this part.
        (d) Payment to the States.--
                (1) In general.--The Secretary shall from time to time
            certify to the Secretary of the Treasury for payment to each
            cooperating State the sums necessary to enable such State as
            agent of the United States to make payments provided for by
            this part.
                (2) Restriction.--All money paid a State under this
            subsection shall be used solely for the purposes for which it
            is paid; and money so paid which is not used for such purposes
            shall be returned, at the time specified in the agreement under
            this section, to the Secretary of the Treasury.
                (3) Bonds.--Any agreement under this section may require
            any officer or employee of the State certifying payments or
            disbursing funds under the agreement or otherwise participating
            in the performance of the agreement, to give a surety bond to
            the United States in such amount as the Secretary may deem
            necessary, and may provide for the payment of the cost of such
            bond from funds for carrying out the purposes of this part.
        (e) Labor Standards.--
                (1) Prohibition on displacement.--An individual in an
            apprenticeship program or on-the-job training program under
            this part shall not displace (including a partial displacement,
            such as a reduction in the hours of non-overtime work, wages,
            or employment benefits) any employed employee.
                (2) Prohibition on impairment of contracts.--An
            apprenticeship program or on-the-job raining program under this
            Act shall not impair an existing contract for services or
            collective bargaining agreement, and no such activity that
            would be inconsistent with the terms of a collective bargaining
            agreement shall be undertaken without the written concurrence
            of the labor organization and employer concerned.
                (3) Additional standards.--The Secretary, or a State acting
            under an agreement described in subsection (a) may pay the
            costs of on-the-job training, notwithstanding any other
            provision of this section, only if--
                        (A) in the case of training which would be
                    inconsistent with the terms of a collective bargaining
                    agreement, the written concurrence of the labor
                    organization concerned has been obtained;
                        (B) the job for which such adversely affected
                    worker is being trained is not being created in a
                    promotional line that will infringe in any way upon the
                    promotional opportunities of currently employed
                    individuals;
                        (C) such training is not for the same occupation
                    from which the worker was separated and with respect to
                    which such worker's group was certified pursuant to
                    section 425(d);
                        (D) the employer is provided reimbursement of not
                    more than 50 percent of the wage rate of the
                    participant, for the cost of providing the training and
                    additional supervision related to the training; and
                        (E) the employer has not received payment under
                    with respect to any other on-the-job training provided
                    by such employer which failed to meet the requirements
                    of subparagraphs (A) through (D).
        (f) Definitions.--As used in this part the following definitions
    apply:
                (1) The term ``adversely affected employment'' means
            employment at an employment site, if workers at such site are
            eligible to apply for adjustment assistance under this part.
                (2) The term ``adversely affected worker'' means an
            individual who has been totally or partially separated from
            employment and is eligible to apply for adjustment assistance
            under this part.
                (3) The term ``average weekly wage'' means \1/13\ of the
            total wages paid to an individual in the quarter in which the
            individual's total wages were highest among the first 4 of the
            last 5 completed calendar quarters immediately before the
            quarter in which occurs the week with respect to which the
            computation is made. Such week shall be the week in which total
            separation occurred, or, in cases where partial separation is
            claimed, an appropriate week, as defined in regulations
            prescribed by the Secretary.
                (4) The term ``average weekly hours'' means the average
            hours worked by the individual (excluding overtime) in the
            employment from which he has been or claims to have been
            separated in the 52 weeks (excluding weeks during which the
            individual was sick or on vacation) preceding the week
            specified in the last sentence of paragraph (4).
                (5) The term ``benefit period'' means, with respect to an
            individual--
                        (A) the benefit year and any ensuing period, as
                    determined under applicable State law, during which the
                    individual is eligible for regular compensation,
                    additional compensation, or extended compensation; or
                        (B) the equivalent to such a benefit year or
                    ensuing period provided for under the applicable
                    Federal unemployment insurance law.
                (6) The term ``consumer goods manufacturing'' means the
            electrical equipment, appliance, and component manufacturing
            industry and transportation equipment manufacturing.
                (7) The term ``employment site'' means a single facility or
            site of employment.
                (8) The term ``energy-intensive manufacturing industries''
            means all industrial sectors, entities, or groups of entities
            that meet the energy or greenhouse gas intensity criteria in
            section 765(b)(2)(A)(i) of the Clean Air Act based on the most
            recent data available.
                (9) The term ``energy producing and transforming
            industries'' means the coal mining industry, oil and gas
            extraction, electricity power generation, transmission and
            distribution, and natural gas distribution.
                (10) The term ``industries dependent on energy industries''
            means rail transportation and pipeline transportation.
                (11) The term ``on-the-job training'' means training
            provided by an employer to an individual who is employed by the
            employer.
                (12) The terms ``partial separation'' and ``partially
            separated'' refer, with respect to an individual who has not
            been totally separated, that such individual has had--
                        (A) his or her hours of work reduced to 80 percent
                    or less of his average weekly hours in adversely
                    affected employment; and
                        (B) his or her wages reduced to 80 percent or less
                    of his average weekly wage in such adversely affected
                    employment.
                (13) The term ``public agency'' means a department or
            agency of a State or political subdivision of a State or of the
            Federal Government.
                (14) The term ``Secretary'' means the Secretary of Labor.
                (15) The term ``service workers'' means workers supplying
            support or auxiliary services to an employment site.
                (16) The term ``State agency'' means the agency of the
            State which administers the State law.
                (17) The term ``State law'' means the unemployment
            insurance law of the State approved by the Secretary of Labor
            under section 3304 of the Internal Revenue Code of 1954.
                (18) The terms ``total separation'' and ``totally
            separated'' refer to the layoff or severance of an individual
            from employment with an employer in which adversely affected
            employment exists.
                (19) The term ``unemployment insurance'' means the
            unemployment compensation payable to an individual under any
            State law or Federal unemployment compensation law, including
            chapter 85 of title 5, United States Code, and the Railroad
            Unemployment Insurance Act. The terms ``regular compensation'',
            ``additional compensation'', and ``extended compensation'' have
            the same respective meanings that are given them in section
            205(2), (3), and (4) of the Federal-State Extended Unemployment
            Compensation Act of 1970 (26 U.S.C. 3304 note).
                (20) The term ``week'' means a week as defined in the
            applicable State law.
                (21) The term ``week of unemployment'' means a week of
            total, part-total, or partial unemployment as determined under
            the applicable State law or Federal unemployment insurance law.
        (g) Special Rule With Respect to Military Service.--
                (1) In general.--Notwithstanding any other provision of
            this part, the Secretary may waive any requirement of this part
            that the Secretary determines is necessary to ensure that an
            adversely affected worker who is a member of a reserve
            component of the Armed Forces and serves a period of duty
            described in paragraph (2) is eligible to receive a climate
            change adjustment allowance, training, and other benefits under
            this part in the same manner and to the same extent as if the
            worker had not served the period of duty.
                (2) Period of duty described.--An adversely affected worker
            serves a period of duty described in this paragraph if, before
            completing training under this part, the worker--
                        (A) serves on active duty for a period of more than
                    30 days under a call or order to active duty of more
                    than 30 days; or
                        (B) in the case of a member of the Army National
                    Guard of the United States or Air National Guard of the
                    United States, performs full-time National Guard duty
                    under section 502(f) of title 32, United States Code,
                    for 30 consecutive days or more when authorized by the
                    President or the Secretary of Defense for the purpose
                    of responding to a national emergency declared by the
                    President and supported by Federal funds.
        (h) Fraud and Recovery of Overpayments.--
                (1) Recovery of payments to which an individual was not
            entitled.--If the Secretary or a court of competent
            jurisdiction determines that any person has received any
            payment under this part to which the individual was not
            entitled, such individual shall be liable to repay such amount
            to the Secretary, as the case may be, except that the Secretary
            shall waive such repayment if such agency or the Secretary
            determines that--
                        (A) the payment was made without fault on the part
                    of such individual; and
                        (B) requiring such repayment would cause a
                    financial hardship for the individual (or the
                    individual's household, if applicable) when taking into
                    consideration the income and resources reasonably
                    available to the individual (or household) and other
                    ordinary living expenses of the individual (or
                    household).
                (2) Means of recovery.--Unless an overpayment is otherwise
            recovered, or waived under paragraph (1), the Secretary shall
            recover the overpayment by deductions from any sums payable to
            such person under this part, under any Federal unemployment
            compensation law or other Federal law administered by the
            Secretary which provides for the payment of assistance or an
            allowance with respect to unemployment. Any amount recovered
            under this section shall be returned to the Treasury of the
            United States.
        (i) Regulations.--The Secretary shall prescribe such regulations as
    may be necessary to carry out the provisions of this part.
        (j) Study on Older Workers.--The Secretary shall conduct a study
    examine the circumstances of older adversely affected workers and the
    ability of such workers to access their retirement benefits. The
    Secretary shall transmit a report to Congress not later than 2 years
    after the date of enactment of this part on the findings of the study
    and the Secretary's recommendations on how to ensure that adversely
    affected workers within 2 years of retirement are able to access their
    retirement benefits.
        (k) Spending Limit.--For each fiscal year, the total amount of
    funds disbursed for the purposes described in section 426 shall not
    exceed the amount deposited in that fiscal year into the Climate Change
    Worker Assistance Fund established under section 782(j) of the Clean
    Air Act. The annual spending limit for any succeeding year shall be
    increased by the difference, if any, between the amount of the prior
    year's disbursements and the spending limitation for that year. The
    Secretary shall promulgate rules to ensure that this spending limit is
    not exceeded. Such rules shall provide that workers who receive any of
    the benefits described in section 426 receive full benefits, and shall
    include the establishment of a waiting list for workers in the event
    that the requests for assistance exceed the spending limit.

                        Subtitle C--Consumer Assistance

    SEC. 431. ENERGY REFUND PROGRAM.

        The Social Security Act (42 U.S.C. 201 et seq.) is amended by
    adding at the end the following:

                      ``TITLE XXII--ENERGY REFUND PROGRAM

    ``SEC. 2201. ENERGY REFUND PROGRAM.

        ``(a) In General.--The Secretary shall formulate and administer the
    program provided for in this section, which shall be known as the
    `Energy Refund Program', and under which eligible low-income households
    are provided cash payments to reimburse the households for the
    estimated loss in their purchasing power resulting from the American
    Clean Energy and Security Act of 2009.
        ``(b) Entitlement of Eligible Households to Cash Payments.--At the
    request of the State agency of a State, each eligible low-income
    household in the State shall be entitled to receive monthly cash
    payments under this section in an amount equal to the monthly energy
    refund amount determined under subsection (d).
        ``(c) Eligibility.--
                ``(1) Eligible households.--A household shall be considered
            to be an eligible low-income household for purposes of this
            section if--
                        ``(A) the gross income of the household does not
                    exceed the greater of--
                                ``(i) 150 percent of the poverty line; or
                                ``(ii) the greatest amount of household
                            gross income in respect of which a benefit
                            could be payable under subsection (d)(2)(B);
                        ``(B) the State agency of the State in which the
                    household is located determines that the household is
                    participating in--
                                ``(i) the Supplemental Nutrition Assistance
                            Program authorized by the Food and Nutrition
                            Act of 2008 (7 U.S.C. 2011 et seq.);
                                ``(ii) the Food Distribution Program on
                            Indian Reservations authorized by section 4(b)
                            of such Act (7 U.S.C. 2013(b)); or
                                ``(iii) the program for nutrition
                            assistance in Puerto Rico or American Samoa
                            under section 19 of such Act (7 U.S.C. 2028);
                        ``(C) the household consists of a single individual
                    or a married couple, and--
                                ``(i) receives the subsidy described in
                            section 1860D-14 of this Act (42 U.S.C. 1395w-
                            114); or
                                ``(ii)(I) participates in the program under
                            title XVIII of this Act; and
                                ``(II) meets the income requirements
                            described in section 1860D-14(a)(1) or (a)(2)
                            of this Act (42 U.S.C. 1395w-114(a)(1) or
                            (a)(2)); or
                        ``(D) the household consists of a single individual
                    or a married couple, and receives benefits under the
                    supplemental security income program under title XVI of
                    this Act (42 U.S.C. 1381-1383f).
                ``(2) Streamlined participation for certain
            beneficiaries.--The Secretary shall--
                        ``(A) periodically estimate the number of eligible
                    beneficiaries and households, and the number of
                    participating beneficiaries and households, for the
                    Energy Refund Program; and
                        ``(B) develop procedures, in consultation with the
                    Commissioner of Social Security, the Railroad
                    Retirement Board, the Secretary of Veterans Affairs,
                    and the State agencies, to ensure that low-income
                    beneficiaries of the benefit programs administered by
                    such entities receive the energy refund for which the
                    beneficiaries are eligible under the Energy Refund
                    Program.
                ``(3) Limitation.--Notwithstanding any other provision of
            law, the Secretary shall provide refunds to United States
            citizens, United States nationals, and individuals lawfully
            residing in the United States who qualify for a refund under
            paragraph (1)(A), and shall establish procedures to ensure that
            other individuals do not receive refunds.
                ``(4) National standards.--The Secretary shall consult with
            the Secretary of Agriculture and establish uniform national
            standards of eligibility ensuring that States may seamlessly
            co-administer the energy refund program with the Supplemental
            Nutrition Assistance Program in accordance with the provisions
            of this section. No State agency shall impose any other
            standard or requirement as a condition of eligibility or refund
            receipt under the program. Assistance in the Energy Refund
            Program shall be furnished promptly to all eligible households
            who make application for such participation or are already
            enrolled in any program referred to in paragraph (1).
        ``(d) Monthly Energy Refund Amount.--
                ``(1) Estimated annual total loss in purchasing power.--Not
            later than August 31 of each fiscal year, the Energy
            Information Administration shall estimate the annual total loss
            in purchasing power that will result from American Clean Energy
            and Security Act of 2009 in the next fiscal year for households
            of each size with gross income equal to 150 percent of the
            poverty line, based on the projected total market value of all
            compliance costs (including, but not limited to, the emissions
            allowances used to demonstrate compliance with title VII of the
            Clean Air Act in the next fiscal year, and excluding costs that
            are not projected to be incurred by households as a result of
            allowances freely allocated and intended for residential
            consumer assistance pursuant to sections 783 through 785 of the
            Clean Air Act), in a way generally recognized as suitable by
            experts.
                ``(2) Monthly energy refund.--The monthly energy refund
            amount for an eligible household under this section shall be--
                        ``(A) if the gross income of the household does not
                    exceed 150 percent of the poverty line applicable to
                    the household--
                                ``(i) if the household has 1, 2, 3, or 4
                            members, \1/12\ of the amount estimated under
                            paragraph (1) for a household of the same size,
                            rounded to the nearest whole dollar amount; or
                                ``(ii) if the household has 5 or more
                            members, \1/12\ of the arithmetic mean value of
                            the amounts estimated under paragraph (1) for
                            households with 5 or more members, rounded to
                            the nearest whole dollar amount; or
                        ``(B) if the gross income of the household exceeds
                    150 percent of the poverty line applicable to the
                    household, \1/12\ of the amount (if any) by which--
                                ``(i) the amount estimated under paragraph
                            (1) for a household of the same size; exceeds
                                ``(ii) 20 percent of the amount by which
                            the gross income of the household exceeds 150
                            percent of the poverty line.
        ``(e) Delivery Mechanism.--
                ``(1) Subject to standards and an implementation schedule
            set by the Secretary, the energy refund shall be provided in
            monthly installments via--
                        ``(A) direct deposit into the eligible household's
                    designated bank account;
                        ``(B) the State's electronic benefit transfer
                    system; or
                        ``(C) another Federal or State mechanism, if such a
                    mechanism is approved by the Secretary.
                ``(2) Such standards shall include--
                        ``(A)(i) defining the required level of recipient
                    protection regarding privacy;
                        ``(ii) guidance on how recipients are offered
                    choices, when relevant, about the delivery mechanism;
                        ``(iii) guidance on ease of use and access to the
                    refund, including the prohibition of fees charged to
                    recipients for withdrawals or other services; and
                        ``(iv) cost-effective protections against improper
                    accessing of the energy refund;
                        ``(B) operating standards that provide for
                    interoperability between States and law enforcement
                    monitoring; and
                        ``(C) other standards, as determined by the
                    Secretary or the Secretary's designee.
        ``(f) Administration.--
                ``(1) In general.--The State agency of each participating
            State shall assume responsibility for the certification of
            applicant households and for the issuance of refunds and the
            control and accountability thereof.
                ``(2) Procedures.--Under standards established by the
            Secretary, the State agency shall establish procedures
            governing the administration of the Energy Refund Program that
            the State agency determines best serve households in the State,
            including households with special needs, such as households
            with elderly or disabled members, households in rural areas,
            homeless individuals, and households residing on reservations
            as defined in the Indian Child Welfare Act of 1978 and the
            Indian Financing Act of 1974. In carrying out this paragraph, a
            State agency--
                        ``(A) shall provide timely, accurate, and fair
                    service to applicants for, and participants in, the
                    Energy Refund Program;
                        ``(B) shall permit an applicant household to apply
                    to participate in the program at the time that the
                    household first contacts the State agency, and shall
                    consider an application that contains the name,
                    address, and signature of the applicant to be
                    sufficient to constitute an application for
                    participation;
                        ``(C) shall screen any applicant household for the
                    Supplemental Nutrition Assistance Program, the State's
                    medical assistance program under section XIX of this
                    Act, State Childrens Health Insurance Program under
                    section XXI of this Act, and a State program that
                    provides basic assistance under a State program funded
                    under title IV of this Act or with qualified State
                    expenditures as defined in section 409(a)(7) of this
                    Act for eligibility for the Energy Refund Program and,
                    if eligible, shall enroll such applicant household in
                    the Energy Refund Program;
                        ``(D) shall complete certification of and provide a
                    refund to any eligible household not later than 30 days
                    following its filing of an application;
                        ``(E) shall use appropriate bilingual personnel and
                    materials in the administration of the program in those
                    portions of the State in which a substantial number of
                    members of low-income households speak a language other
                    than English; and
                        ``(F) shall utilize State agency personnel who are
                    employed in accordance with the current standards for a
                    Merit System of Personnel Administration or any
                    standards later prescribed by the Office of Personnel
                    Management pursuant to section 208 of the
                    Intergovernmental Personnel Act of 1970 (42 U.S.C.
                    4728) modifying or superseding such standards relating
                    to the establishment and maintenance of personnel
                    standards on a merit basis to make all tentative and
                    final determinations of eligibility and ineligibility.
                ``(3) Regulations.--
                        ``(A) Except as provided in subparagraph (B), the
                    Secretary shall issue such regulations consistent with
                    this section as the Secretary deems necessary or
                    appropriate for the effective and efficient
                    administration of the Energy Refund Program, and shall
                    promulgate all such regulations in accordance with the
                    procedures set forth in section 553 of title 5, United
                    States Code.
                        ``(B) Without regard to section 553 of title 5 of
                    such Code, the Administrator may by rule promulgate as
                    final, to be effective until no later than 2 years
                    after the date of the enactment of the American Clean
                    Energy and Security Act of 2009, any procedures that
                    are substantially the same as the procedures governing
                    the Supplemental Nutrition Assistance Program in
                    section 273.2, 273.12, or 273.15 of title 7, Code of
                    Federal Regulations.
                        ``(C) Notwithstanding subsection (i)(4), the
                    Secretary may promulgate regulations allowing for
                    streamlined eligibility determinations for some or all
                    households which include individuals receiving
                    assistance under a State plan approved under title XIX
                    or XXI of this Act. The regulations may institute
                    procedures whereby the income and family size
                    information used for determining eligibility under such
                    title XIX or XXI may be the basis for determining
                    eligibility for the Energy Refund Program.
                        ``(D) Notwithstanding any other provision of this
                    section, the Secretary may authorize States to provide
                    benefits under this section on a quarterly basis if the
                    Secretary determines that the amount of the benefits
                    that would be provided on a monthly basis to households
                    is insufficient to be efficiently paid on a monthly
                    basis in light of the administrative expenses of the
                    Energy Refund Program.
        ``(g) Treatment.--The value of the refund provided under this
    section shall not be considered income or resources for any purpose
    under any Federal, State, or local laws, including, but not limited to,
    laws relating to an income tax, or public assistance programs
    (including, but not limited to, health care, cash aid, child care,
    nutrition programs, and housing assistance) and no participating State
    or political subdivision thereof shall decrease any assistance
    otherwise provided an individual or individuals because of the receipt
    of a refund under this section.
        ``(h) Program Integrity.--For purposes of ensuring program
    integrity and complying with the requirements of the Improper Payment
    Information Act of 2002, the Secretary shall, to the maximum extent
    possible, rely on and coordinate with the quality control sample and
    review procedures of paragraphs (2), (3), (4), and (5) of section 16(c)
    of the Food and Nutrition Act of 2008 (7 U.S.C. 2025(c)).
        ``(i) Definitions.--
                ``(1) Secretary.--The term `Secretary' means the Secretary
            of Health and Human Services or the head of another agency
            designated by the Secretary of Health and Human Services.
                ``(2) Electronic benefit transfer system.--The term
            `electronic benefit transfer system' means a system by which
            household benefits or refunds defined under subsection (e) are
            issued from and stored in a central databank via electronic
            benefit transfer cards.
                ``(3) Gross income.--The term `gross income' means the
            gross income of a household that is determined in accordance
            with standards and procedures established under section 5 of
            the Food and Nutrition Act of 2008 (7 U.S.C. 2014) and its
            implementing regulations.
                ``(4) Household.--
                        ``(A) The term `household' means--
                                ``(i) in subparagraphs (A) and (B) of
                            subsection (c)(1) of this section, except as
                            provided in subparagraph (C) of this paragraph,
                            an individual or a group of individuals who are
                            a household under section 3(n) of the Food and
                            Nutrition Act of 2008 (7 U.S.C. 2012(n));
                                ``(ii) in subsection (c)(1)(C) of this
                            section, a single individual or married couple
                            that receives benefits under section 1860D-14
                            of this Act (42 U.S.C. 1395w-114); and
                                ``(iii) in subsection (c)(1)(D) of this
                            section, a single individual or married couple
                            that receives benefits under the supplemental
                            security income program under title XVI of this
                            Act (42 U.S.C. 1381-1383f).
                        ``(B) The Secretary shall establish rules for
                    providing the energy refund in an equitable and
                    administratively simple manner to households where the
                    group of individuals who live together includes members
                    not all of whom are described in a single clause of
                    subparagraph (A), or includes additional members not
                    described in any such clause.
                        ``(C) The Secretary shall establish rules regarding
                    the eligibility and delivery of the energy refund to
                    groups of individuals described in section 3(n)(4) or
                    (5) of the Food and Nutrition Act of 2008 (7 U.S.C.
                    2012(n)).
                ``(5) Poverty line.--The term `poverty line' has the
            meaning given the term in section 673(2) of the Community
            Services Block Grant Act (42 U.S.C. 9902(2)), including any
            revision required by that section.
                ``(6) State.--The term `State' means the 50 States, the
            District of Columbia, the Commonwealth of Puerto Rico, American
            Samoa, the United States Virgin Islands, Guam, and the
            Commonwealth of the Northern Mariana Islands.
                ``(7) State agency.--The term `State agency' means an
            agency of State government, including the local offices
            thereof, that has responsibility for administration of the 1 or
            more federally aided public assistance programs within the
            State, and in those States where such assistance programs are
            operated on a decentralized basis, the term shall include the
            counterpart local agencies administering such programs.
                ``(8) Other terms.--Other terms not defined in this title
            shall have the same meaning applied in the Supplemental
            Nutrition Assistance Program authorized by the Food and
            Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) unless the
            Secretary finds for good cause that application of a particular
            definition would be detrimental to the purposes of the Energy
            Refund Program.''.

    SEC. 432. MODIFICATION OF EARNED INCOME CREDIT AMOUNT FOR INDIVIDUALS
                  WITH NO QUALIFYING CHILDREN.

        (a) In General.--Subsection (b) of section 32 of the Internal
    Revenue Code of 1986 is amended by adding at the end the following new
    paragraph:
                ``(4) Special rule for individuals with no qualifying
            children who are affected by the american clean energy and
            security act of 2009.--
                        ``(A) In general.--In the case of any household
                    which the Secretary determines experienced a reduction
                    in purchasing power as a result of the provisions of,
                    or amendments made by, the American Clean Energy and
                    Security Act of 2009 (determined without regard to this
                    paragraph and section 2201 of the Social Security
                    Act)--
                                ``(i) Increase in credit percentage and
                            phaseout percentage.--The table contained in
                            paragraph (1)(A) shall be applied by
                            substituting `15.3' for `7.65'.
                                ``(ii) Increase in beginning phaseout
                            amount.--The table contained in paragraph
                            (2)(A) shall be applied by substituting
                            `$11,640' for `$5,280'.
                        ``(B) Inflation adjustment.--
                                ``(i) In general.--In the case of any
                            taxable year beginning after 2012, the $11,640
                            amount in subparagraph (A)(ii) shall be
                            increased by an amount equal to--
                                        ``(I) such dollar amount,
                                    multiplied by
                                        ``(II) the cost of living
                                    adjustment determined under section
                                    1(f)(3) for the calendar year in which
                                    the taxable year begins determined by
                                    substituting `calendar year 2011' for
                                    `calendar year 1992' in subparagraph
                                    (B) thereof.
                                ``(ii) Rounding.--Subparagraph (A) of
                            subsection (j)(2) shall apply after taking into
                            account any increase under clause (i) in the
                            same manner as if such increase were under
                            paragraph (1) of subsection (j).
                                ``(iii) Coordination with other inflation
                            adjustments.--Paragraph (1) of subsection (j)
                            shall not apply to the dollar amount
                            substituted under subparagraph (A)(ii).''.
        (b) Effective Date.--The amendment made by this section shall apply
    to taxable years beginning after December 31, 2011.

    SEC. 433. PROTECTION OF SOCIAL SECURITY AND MEDICARE TRUST FUNDS.

        (a) OASDI Trust Funds.--Section 201 of the Social Security Act (42
    U.S.C. 401) is amended by adding at the end the following new
    subsection:
        ``(o) The Secretary of the Treasury shall transfer from time to
    time to the Federal Old-Age and Survivors Insurance Trust Fund and the
    Federal Disability Insurance Trust Fund, from amounts in the general
    fund of the Treasury that are not otherwise appropriated, such sums as
    the Chief Actuary of the Social Security Administration calculates as
    necessary (and so certifies to such Secretary) for any fiscal year, on
    account of changes in benefit costs and changes in tax revenue
    attributable to the provisions of the American Clean Energy and
    Security Act of 2009 and the amendments made thereby, in order to place
    each of such Trust Funds in the same position at the end of such fiscal
    year as the position in which such Trust Fund would have been if such
    changes had not occurred.''.
        (b) HI Trust Fund.--Section 1817 of such Act (42 U.S.C. 1395i) is
    amended by adding at the end the following new subsection:
        ``(l) Transfers to Account for Changes in Benefit Costs and Changes
    in Tax Revenue Attributable to the American Clean Energy and Security
    Act of 2009.--The Secretary of the Treasury shall transfer from time to
    time to the Trust Fund, from amounts in the general fund of the
    Treasury that are not otherwise appropriated, such sums as the Chief
    Actuary of the Centers for Medicare & Medicaid Services calculates as
    necessary (and so certifies to such Secretary) for any fiscal year, on
    account of changes in benefit costs and changes in tax revenue
    attributable to the provisions of the American Clean Energy and
    Security Act of 2009 and the amendments made thereby, in order to place
    the Trust Fund in the same position at the end of such fiscal year as
    the position in which it would have been if such changes had not
    occurred.''.

                     Subtitle D--Exporting Clean Technology

    SEC. 441. FINDINGS AND PURPOSES.

        (a) Findings.--Congress finds the following:
                (1) Protecting Americans from the impacts of climate change
            requires global reductions in greenhouse gas emissions.
                (2) Although developing countries are historically least
            responsible for the cumulative greenhouse gas emissions that
            are causing climate change and continue to have very low per
            capita greenhouse gas emissions, their overall greenhouse gas
            emissions are increasing as they seek to grow their economies
            and reduce energy poverty for their populations.
                (3) Many developing countries lack the financial and
            technical resources to adopt clean energy technologies and
            absent assistance their greenhouse gas emissions will continue
            to increase.
                (4) Investments in clean energy technology cooperation can
            substantially reduce global greenhouse gas emissions while
            providing developing countries with incentives to adopt
            policies that will address competitiveness concerns related to
            regulation of United States greenhouse gas emissions.
                (5) Investments in clean technology in developing countries
            will increase demand for clean energy products, open up new
            markets for United States companies, spur innovation, and lower
            costs.
                (6) Under Article 4 of the United Nations Framework
            Convention on Climate Change, developed country parties,
            including the United States, committed to ``take all
            practicable steps to promote, facilitate, and finance, as
            appropriate, the transfer of, or access to, environmentally
            sound technologies and know-how to other parties, particularly
            developing country parties, to enable them to implement the
            provisions of the Convention''.
                (7) Under the Bali Action Plan, developed country parties
            to the United Nations Framework Convention on Climate Change,
            including the United States, committed to ``enhanced action on
            the provision of financial resources and investment to support
            action on mitigation and adaptation and technology
            cooperation,'' including, inter alia, consideration of
            ``improved access to adequate, predictable, and sustainable
            financial resources and financial and technical support, and
            the provision of new and additional resources, including
            official and concessional funding for developing country
            parties''.
                (8) Intellectual property rights are a key driver of
            investment and research and development in, and the global
            deployment of, clean technologies.
                (9) Innovative clean technologies, including U.S. and
            multilateral financing mechanisms for their deployment, are
            critical to mitigating global warming pollution, preventing
            catastrophic changes to the climate, and developing robust
            economies around the world.
                (10) Any weakening of intellectual property rights
            protection poses a substantial competitive risk to U.S.
            companies and the creation of high-quality U.S. jobs,
            inhibiting the creation of new ``green'' employment and the
            transformational shift to the ``Green Economy'' of the 21st
            Century.
                (11) Any U.S. funding directed toward assisting developing
            countries with regard to exporting clean technology should
            promote the robust compliance with and enforcement of existing
            international legal requirements for the protection of
            intellectual property rights as formulated in the Agreement on
            Trade-Related Aspects of Intellectual Property Rights, referred
            to in section 101(d)(15) of the Uruguay Round Agreements Act
            (19 U.S.C.3511(d)(15) and in applicable intellectual property
            provisions of bilateral trade agreements.
        (b) Purposes.--The purposes of this subtitle are--
                (1) to provide United States assistance and leverage
            private resources to encourage widespread implementation, in
            developing countries, of activities that reduce, sequester, or
            avoid greenhouse gas emissions; and
                (2) to provide such assistance in a manner that--
                        (A) encourages such countries to adopt policies and
                    measures, including sector-based and cross-sector
                    policies and measures, that substantially reduce,
                    sequester, or avoid greenhouse gas emissions;
                        (B) promotes the successful negotiation of a global
                    agreement to reduce greenhouse gas emissions under the
                    United Nations Framework Convention on Climate Change;
                    and
                        (C) promotes robust compliance with and enforcement
                    of existing international legal requirements for the
                    protection of intellectual property rights, as
                    formulated in the Agreement on Trade-Related Aspects of
                    Intellectual Property Rights referred to in section
                    101(d)(15) of the Uruguay Round Agreements Act (19
                    U.S.C. 3511(d)(15)) and in applicable intellectual
                    property provisions of bilateral trade agreements.

    SEC. 442. DEFINITIONS.

        In this subtitle:
                (1) Allowance.--The term ``allowance'' means an emission
            allowance established under section 721 of the Clean Air Act.
                (2) Appropriate congressional committees.--The term
            ``appropriate congressional committees'' means--
                        (A) the Committees on Energy and Commerce, Foreign
                    Affairs, and Financial Services of the House of
                    Representatives; and
                        (B) the Committees on Environment and Public Works,
                    Energy and Natural Resources, and Foreign Relations of
                    the Senate.
                (3) Convention.--The term ``Convention'' means the United
            Nations Framework Convention on Climate Change, done at New
            York on May 9, 1992, and entered into force on March 21, 1994.
                (4) Developing country.--The term ``developing country''
            means a country eligible to receive official development
            assistance according to the income guidelines of the
            Development Assistance Committee of the Organization for
            Economic Cooperation and Development.
                (5) Eligible country.--The term ``eligible country'' means
            a developing country that is determined by the interagency
            group under section 444 to be eligible to receive assistance
            under this subtitle.
                (6) Interagency group.--The term ``interagency group''
            means the group established by the President under section 443
            to administer the program established under this subtitle.
                (7) Least developed country.--The term ``least developed
            country'' means a foreign country the United Nations has
            identified as among the least developed of developing
            countries.
                (8) Qualifying activity.--The term ``qualifying activity''
            means an activity that meets the criteria in section 445.
                (9) Qualifying entity.--The term ``qualifying entity''
            means a national, regional, or local government in, or a
            nongovernmental organization or private entity located or
            operating in, an eligible country.

    SEC. 443. GOVERNANCE.

        (a) Oversight.--The Secretary of State, or such other Federal
    agency head as the President may designate, in consultation with the
    interagency group established under subsection (b), shall oversee
    distributions of allowances allocated under section 782(o) of the Clean
    Air Act (as added by section 321 of this Act) for distribution pursuant
    to this subtitle.
        (b) Interagency Group.--The President shall establish an
    interagency group to administer the program established under this
    subtitle. The Members of the interagency group shall include--
                (1) the Secretary of State;
                (2) the Administrator of the Environmental Protection
            Agency;
                (3) the Secretary of Energy;
                (4) the Secretary of the Treasury;
                (5) the Secretary of Commerce;
                (6) the Administrator of the United States Agency for
            International Development; and
                (7) any other head of a Federal agency or executive branch
            appointee that the President may designate.
        (c) Chairperson.--The Secretary of State shall serve as the
    chairperson of the interagency group.
        (d) Supplement Not Supplant.--Allowances distributed pursuant to
    this subtitle shall be used to supplement, and not to supplant, any
    other Federal, State, or local resources available to carry out
    activities that are qualifying activities under this subtitle.

    SEC. 444. DETERMINATION OF ELIGIBLE COUNTRIES.

        (a) In General.--The interagency group shall determine a country to
    be an eligible country for the purposes of this subtitle if a country
    meets the following criteria:
                (1) The country is a developing country that--
                        (A) has entered into an international agreement to
                    which the United States is a party, under which such
                    country agrees to take actions to produce measurable,
                    reportable, and verifiable greenhouse gas emissions
                    mitigation; or
                        (B) is determined by the interagency group to have
                    in force national policies and measures that are
                    capable of producing measurable, reportable, and
                    verifiable greenhouse gas emissions mitigation.
                (2) The country has developed a nationally appropriate
            mitigation strategy that seeks to achieve substantial
            reductions, sequestration, or avoidance of greenhouse gas
            emissions, relative to business-as-usual levels.
                (3) Subject to subsection (b)(1), such other criteria as
            the President determines will serve the purposes of this
            subtitle or other United States national security, foreign
            policy, environmental, or economic objectives including robust
            compliance with and enforcement of existing international legal
            requirements for the protection of intellectual property rights
            for clean technology, as formulated in the Agreement on Trade-
            Related Aspects of Intellectual Property Rights, referred to in
            section 101(d)(15) of the Uruguay Round Agreements Act (19
            U.S.C. 3511(d)(15)) and in applicable intellectual property
            provisions of bilateral trade agreements.
        (b) Exceptions.--
                (1) Subsection (a)(3) applies only to bilateral assistance
            under section 446(c)(4).
                (2) The eligibility criteria in this section do not apply
            in the case of least developed countries receiving assistance
            under section 445(7) for the purpose of building capacity to
            meet such eligibility criteria.

    SEC. 445. QUALIFYING ACTIVITIES.

        Assistance under this subtitle may be provided only to qualifying
    entities for clean technology activities (including building relevant
    technical and institutional capacity) that contribute to substantial,
    measurable, reportable, and verifiable reductions, sequestration, or
    avoidance of greenhouse gas emissions including--
                (1) deployment of technologies to capture and sequester
            carbon dioxide emissions from electric generating units or
            large industrial sources (except that assistance under this
            subtitle for such deployment shall be limited to the cost of
            retrofitting existing facilities with such technologies or the
            incremental cost of purchasing and installing such technologies
            at new facilities);
                (2) deployment of renewable electricity generation from
            wind, solar, sustainably produced biomass, geothermal, marine,
            or hydrokinetic sources;
                (3) substantial increases in the efficiency of electricity
            transmission, distribution, and consumption;
                (4) deployment of low- or zero emissions technologies that
            are facing financial or other barriers to their widespread
            deployment which could be addressed through support under this
            subtitle in order to reduce, sequester, or avoid emission;
                (5) reduction in transportation sector emissions through
            increased transportation system and vehicle efficiency or use
            of transportation fuels that have lifecycle greenhouse gas
            emissions that are substantially lower than those attributable
            to fossil fuel-based alternatives;
                (6) reduction in black carbon emissions; or
                (7) capacity building activities, including--
                        (A) developing and implementing methodologies and
                    programs for measuring and quantifying greenhouse gas
                    emissions and verifying emissions mitigation;
                        (B) assessing, developing, and implementing
                    technology and policy options for greenhouse gas
                    emissions mitigation and avoidance of future emissions,
                    including sector and cross-sector mitigation
                    strategies; and
                        (C) providing other forms of technical assistance
                    to facilitate the qualification for, and receipt of,
                    assistance under this Act.

    SEC. 446. ASSISTANCE.

        (a) In General.--The Secretary of State, or such other Federal
    agency head as the President may designate, is authorized to provide
    assistance, through the distribution of allowances allocated for such
    purpose under section 782(o) of the Clean Air Act (as added by section
    321 of this Act) for qualifying activities that take place in eligible
    countries, in accordance with the requirements of this subtitle.
        (b) Definition.--For the purposes of this section the term ``clean
    technology'' means any technology or service related to the qualifying
    activities identified in section 445.
        (c) Distribution of Allowances.--
                (1) In general.--The Secretary of State, or such other
            Federal agency head as the President may designate, after
            consultation with the interagency group, shall distribute
            allowances under this subtitle--
                        (A) in the form of bilateral assistance in
                    accordance with paragraph (4);
                        (B) to multilateral funds or institutions pursuant
                    to the Convention or an agreement negotiated under the
                    Convention; or
                        (C) through some combination of the mechanisms
                    identified in subparagraphs (A) and (B).
                (2) Global environment facility.--For any allowances
            provided to the Global Environment Facility pursuant to
            paragraph (1)(B), the President shall designate the Secretary
            of the Treasury to distribute those allowances to the Global
            Environment Facility.
                (3) Distribution through international fund or
            institution.--If allowances are distributed to a multilateral
            fund or institution, as authorized in paragraph (1), the
            Secretary of State, or such other Federal agency head as the
            President may designate, shall seek to ensure the establishment
            and implementation of adequate mechanisms to--
                        (A) apply and enforce the criteria for
                    determination of eligible countries and qualifying
                    activities under sections 444 and 445, respectively;
                        (B) require public reporting describing the process
                    and methodology for selecting the ultimate recipients
                    of assistance and a description of each activity that
                    received assistance, including the amount of
                    obligations and expenditures for assistance; and
                        (C) require that no funds be expended for the
                    benefit of any qualifying activity where that activity
                    or any activity relating to a qualifying activity under
                    section 445 undermines the robust compliance with and
                    enforcement of existing legal requirements for the
                    protection of intellectual property rights for clean
                    technology, as formulated in the Agreement on Trade-
                    Related Aspects of Intellectual Property Rights,
                    referred to in section 101(d)(15) of the Uruguay Round
                    Agreements Act (19 U.S.C. 3511(d)(15)).
                (4) Bilateral assistance.--
                        (A) In general.--Bilateral assistance under
                    paragraph (1) shall be carried out by the Administrator
                    of the United States Agency for International
                    Development, in consultation with the interagency
                    group.
                        (B) Limitations.--Not more than 15 percent of
                    allowances made available to carry out bilateral
                    assistance under this subtitle in any year shall be
                    distributed to support activities in any single
                    country.
                        (C) Selection criteria.--Not later than 2 years
                    after the date of enactment of this subtitle, the
                    Administrator of the United States Agency for
                    International Development, after consultation with the
                    interagency group, shall develop and publish a set of
                    criteria to be used in evaluating activities within
                    eligible countries for bilateral assistance under this
                    subtitle.
                        (D) Criteria requirements.--The criteria under
                    subparagraph (C) shall require that--
                                (i) the activity is a qualifying activity;
                                (ii) the activity will be conducted as part
                            of an eligible country's nationally appropriate
                            mitigation strategy or as part of an eligible
                            country's actions towards providing a
                            nationally appropriate mitigation strategy to
                            reduce, sequester, or avoid emissions being
                            implemented by the eligible country;
                                (iii) the activity will not have adverse
                            effects on human health, safety, or welfare,
                            the environment, or natural resources;
                                (iv) any technologies deployed through
                            bilateral assistance under this subtitle will
                            be properly implemented and maintained;
                                (v) the activity will not cause any net
                            loss of United States jobs or displacement of
                            United States production;
                                (vi) costs of the activity will be shared
                            by the host country government, private sector
                            parties, or a multinational development bank,
                            except that this clause does not apply to least
                            developed countries;
                                (vii) the activity would not undermine the
                            protection of intellectual property rights for
                            clean technology, as formulated in the
                            Agreement on Trade-Related Aspects of
                            Intellectual Property Rights, referred to in
                            section 101(d)(15) of the Uruguay Round
                            Agreements Act (19 U.S.C. 3511(d)(15)) and
                            applicable intellectual property provisions of
                            bilateral trade agreements; and
                                (viii) the activity meets such other
                            requirements as the interagency group
                            determines appropriate to further the purposes
                            of this subtitle.
                        (E) Criteria preferences.--The criteria under
                    subparagraph (C) shall give preference to activities
                    that--
                                (i) promise to achieve large-scale
                            greenhouse gas reductions, sequestration, or
                            avoidance at a national, sectoral or cross-
                            sectoral level;
                                (ii) have the potential to catalyze a shift
                            within the host country towards widespread
                            deployment of low- or zero-carbon energy
                            technologies;
                                (iii) build technical and institutional
                            capacity and other activities that are unlikely
                            to be attractive to private sector funding; or
                                (iv) maximize opportunities to leverage
                            other sources of assistance and catalyze
                            private-sector investment.
        (d) Monitoring, Evaluation, and Enforcement.--The Secretary of
    State, or such other Federal agency head as the President may
    designate, in consultation with the interagency group, shall establish
    and implement a system to monitor and evaluate the performance of
    activities receiving assistance under this subtitle. The Secretary of
    State, or such other Federal agency head as the President may
    designate, shall have the authority to suspend or terminate assistance
    in whole or in part for an activity if it is determined that the
    activity is not operating in compliance with the approved proposal.
        (e) Coordination With U.S. Foreign Assistance.--Subject to the
    direction of the President, the Secretary of State shall, to the extent
    practicable, seek to align activities under this section with broader
    development, poverty alleviation, or natural resource management
    objectives and initiatives in the recipient country.
        (f) Annual Reports.--Not later than March 1, 2012, and annually
    thereafter, the President shall submit to the appropriate congressional
    committees a report on the assistance provided under this subtitle
    during the prior fiscal year. Such report shall include--
                (1) a description of the amount and value of allowances
            distributed during the prior fiscal year;
                (2) a description of each activity that received assistance
            during the prior fiscal year, and a description of the
            anticipated and actual outcomes;
                (3) an assessment of any adverse effects to human health,
            safety, or welfare, the environment, or natural resources as a
            result of activities supported under this subtitle;
                (4) an assessment of the success of the assistance provided
            under this subtitle to improving the technical and
            institutional capacity to implement substantial emissions
            reductions;
                (5) an estimate of the greenhouse gas emissions reductions,
            sequestration, or avoidance achieved by assistance provided
            under this subtitle during the prior fiscal year; and
                (6) an assessment whether any funds expended for the
            benefit of any qualifying activity undermined the protection of
            intellectual property rights for clean technology, as
            formulated in the Agreement on Trade-Related Aspects of
            Intellectual Property Rights, referred to in section 101(d)(15)
            of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)) and
            applicable intellectual property provisions of bilateral trade
            agreements.
        (g) Not Eligible for Offset Credit.--Activities that receive
    support under this subtitle shall not be issued offset credits for the
    greenhouse gas emissions reductions or avoidance, or greenhouse gas
    sequestration, produced by such activities.

                     Subtitle E--Adapting to Climate Change

                          PART 1--DOMESTIC ADAPTATION

             Subpart A--National Climate Change Adaptation Program

    SEC. 451. GLOBAL CHANGE RESEARCH AND DATA MANAGEMENT.

        (a) Short Title.--This section may be cited as the ``Global Change
    Research and Data Management Act of 2009''.
        (b) Global Change Research.--
                (1) Purpose.--The purpose of this subsection is to provide
            for the continuation and coordination of a comprehensive and
            integrated United States observation, research, and outreach
            program which will assist the Nation and the world to
            understand, assess, predict, and respond to the effects of
            human-induced and natural processes of global change.
                (2) Definitions.--For purposes of this subsection--
                        (A) the term ``global change'' means human-induced
                    or natural changes in the global environment (including
                    alterations in climate, land productivity, oceans or
                    other water resources, atmospheric chemistry,
                    biodiversity, and ecological systems) that may alter
                    the capacity of the Earth to sustain life;
                        (B) the term ``global change research'' means
                    study, monitoring, assessment, prediction, and
                    information management activities to describe and
                    understand--
                                (i) the interactive physical, chemical, and
                            biological processes that regulate the total
                            Earth system;
                                (ii) the unique environment that the Earth
                            provides for life;
                                (iii) changes that are occurring in the
                            Earth system; and
                                (iv) the manner in which such system,
                            environment, and changes are influenced by
                            human actions;
                        (C) the term ``interagency committee'' means the
                    interagency committee established under paragraph (3);
                        (D) the term ``Plan'' means the National Global
                    Change Research and Assessment Plan developed under
                    paragraph (5);
                        (E) the term ``Program'' means the United States
                    Global Change Research Program established under
                    paragraph (4); and
                        (F) the term ``regional climate change'' means the
                    natural or human-induced changes manifested in the
                    local or regional environment (including alterations in
                    weather patterns, land productivity, water resources,
                    sea level rise, atmospheric chemistry, biodiversity,
                    and ecological systems) that may alter the capacity of
                    a specific region to support current or future social
                    and economic activity or natural ecosystems.
                (3) Interagency cooperation and coordination.--
                        (A) Establishment.--The President shall establish
                    or designate an interagency committee to ensure
                    cooperation and coordination of all Federal research
                    activities pertaining to processes of global change for
                    the purpose of increasing the overall effectiveness and
                    productivity of Federal global change research efforts.
                    The interagency committee shall include research and
                    program representatives of agencies conducting global
                    change research, agencies with authority over resources
                    likely to be affected by global change, and agencies
                    with authority to mitigate human-induced global change.
                        (B) Functions of the interagency committee.--The
                    interagency committee shall--
                                (i) serve as the forum for developing the
                            Plan and for overseeing its implementation;
                                (ii) serve as the forum for developing the
                            vulnerability assessment under paragraph (7);
                                (iii) ensure cooperation among Federal
                            agencies with respect to global change research
                            activities;
                                (iv) work with academic, State, industry,
                            and other groups conducting global change
                            research, to provide for periodic public and
                            peer review of the Program;
                                (v) cooperate with the Secretary of State
                            in--
                                        (I) providing representation at
                                    international meetings and conferences
                                    on global change research in which the
                                    United States participates; and
                                        (II) coordinating the Federal
                                    activities of the United States with
                                    programs of other nations and with
                                    international global change research
                                    activities;
                                (vi) work with appropriate Federal, State,
                            regional, and local authorities to ensure that
                            the Program is designed to produce information
                            needed to develop policies to mitigate human-
                            induced global change and to reduce the
                            vulnerability of the United States and other
                            regions to global change;
                                (vii) facilitate ongoing dialog and
                            information exchange with regional, State, and
                            local governments and other user communities;
                            and
                                (viii) identify additional decisionmaking
                            groups that may use information generated
                            through the Program.
                (4) United states global change research program.--
                        (A) Establishment.--The President shall establish
                    an interagency United States Global Change Research
                    Program to improve understanding of global change, to
                    respond to the information needs of communities and
                    decisionmakers, and to provide periodic assessments of
                    the vulnerability of the United States and other
                    regions to global and regional climate change. The
                    Program shall be implemented in accordance with the
                    Plan.
                        (B) Lead agency.--The lead agency for the United
                    States Global Change Research Program shall be the
                    Office of Science and Technology Policy.
                        (C) Interagency program activities.--The Director
                    of the Office of Science and Technology Policy, in
                    consultation with the interagency committee, shall
                    identify activities included in the Plan that involve
                    participation by 2 or more agencies in the Program, and
                    that do not fall within the current fiscal year budget
                    allocations of those participating agencies, to fulfill
                    the requirements of this section. The Director of the
                    Office of Science and Technology Policy shall allocate
                    funds to the agencies to conduct the identified
                    interagency activities. Such activities may include--
                                (i) development of scenarios for climate,
                            land-cover change, population growth, and
                            socioeconomic development;
                                (ii) calibration and testing of alternative
                            regional and global climate models;
                                (iii) identification of economic sectors
                            and regional climatic zones; and
                                (iv) convening regional workshops to
                            facilitate information exchange and involvement
                            of regional, State, and local decisionmakers,
                            non-Federal experts, and other stakeholder
                            groups in the activities of the Program.
                        (D) Workshops.--The Director shall ensure that at
                    least one workshop is held per year in each region
                    identified by the Plan under paragraph (5)(B)(xi) to
                    facilitate information exchange and outreach to
                    regional, State, and local stakeholders as required by
                    this section.
                        (E) Authorization of appropriations.--There are
                    authorized to be appropriated to the Office of Science
                    and Technology Policy for carrying out this paragraph
                    $10,000,000 for each of the fiscal years 2009 through
                    2014.
                (5) National global change research and assessment plan.--
                        (A) In general.--The President shall develop a
                    National Global Change Research and Assessment Plan for
                    implementation of the Program. The Plan shall contain
                    recommendations for global change research and
                    assessment. The President shall submit an outline for
                    the development of the Plan to the Congress within 1
                    year after the date of enactment of this Act, and shall
                    submit a completed Plan to the Congress within 3 years
                    after the date of enactment of this Act. Revised Plans
                    shall be submitted to the Congress at least once every
                    5 years thereafter. In the development of each Plan,
                    the President shall conduct a formal assessment process
                    under this paragraph to determine the needs of
                    appropriate Federal, State, regional, and local
                    authorities and other interested parties regarding the
                    types of information needed by them in developing
                    policies to mitigate human-induced global change and to
                    reduce society's vulnerability to global change and
                    shall utilize these assessments, including the reviews
                    by the National Academy of Sciences and the National
                    Governors Association under subparagraphs (E) and (F),
                    in developing the Plan.
                        (B) Contents of the plan.--The Plan shall--
                                (i) establish, for the 10-year period
                            beginning in the year the Plan is submitted,
                            the goals and priorities for Federal global
                            change research which most effectively advance
                            scientific understanding of global change and
                            provide information of use to Federal, State,
                            regional, and local authorities in the
                            development of policies relating to global
                            change;
                                (ii) describe specific activities,
                            including efforts to determine user information
                            needs, research activities, data collection,
                            database development, and data analysis
                            requirements, development of regional
                            scenarios, assessment of model predictability,
                            assessment of climate change impacts,
                            participation in international research
                            efforts, and information management, required
                            to achieve such goals and priorities;
                                (iii) identify relevant programs and
                            activities of the Federal agencies that
                            contribute to the Program directly and
                            indirectly;
                                (iv) set forth the role of each Federal
                            agency in implementing the Plan;
                                (v) consider and utilize, as appropriate,
                            reports and studies conducted by Federal
                            agencies, the National Research Council, or
                            other entities;
                                (vi) make recommendations for the
                            coordination of the global change research and
                            assessment activities of the United States with
                            such activities of other nations and
                            international organizations, including--
                                        (I) a description of the extent and
                                    nature of international cooperative
                                    activities;
                                        (II) bilateral and multilateral
                                    efforts to provide worldwide access to
                                    scientific data and information; and
                                        (III) improving participation by
                                    developing nations in international
                                    global change research and
                                    environmental data collection;
                                (vii) detail budget requirements for
                            Federal global change research and assessment
                            activities to be conducted under the Plan;
                                (viii) catalog the type of information
                            identified by appropriate Federal, State,
                            regional, and local decisionmakers needed to
                            develop policies to reduce society's
                            vulnerability to global change and indicate how
                            the planned research will meet these
                            decisionmakers' information needs;
                                (ix) identify the observing systems
                            currently employed in collecting data relevant
                            to global and regional climate change research
                            and prioritize additional observation systems
                            that may be needed to ensure adequate data
                            collection and monitoring of global change;
                                (x) describe specific activities designed
                            to facilitate outreach and data and information
                            exchange with regional, State, and local
                            governments and other user communities; and
                                (xi) identify and describe regions of the
                            United States that are likely to experience
                            similar impacts of global change or are likely
                            to share similar vulnerabilities to global
                            change.
                        (C) Research elements.--The Plan shall include at a
                    minimum the following research elements:
                                (i) Global measurements, establishing
                            worldwide to regional scale observations
                            prioritized to understand global change and to
                            meet the information needs of decisionmakers on
                            all relevant spatial and time scales.
                                (ii) Information on economic, demographic,
                            and technological trends that contribute to
                            changes in the Earth system and that influence
                            society's vulnerability to global and regional
                            climate change.
                                (iii) Development of indicators and
                            baseline databases to document global change,
                            including changes in species distribution and
                            behavior, extent of glaciations, and changes in
                            sea level.
                                (iv) Studies of historical changes in the
                            Earth system, using evidence from the
                            geological and fossil record.
                                (v) Assessments of predictability using
                            quantitative models of the Earth system to
                            simulate global and regional environmental
                            processes and trends.
                                (vi) Focused research initiatives to
                            understand the nature of and interaction among
                            physical, chemical, biological, land use, and
                            social processes related to global and regional
                            climate change.
                                (vii) Focused research initiatives to
                            determine and then meet the information needs
                            of appropriate Federal, State, and regional
                            decisionmakers.
                        (D) Information management.--The Plan shall
                    incorporate, to the extent practicable, the
                    recommendations relating to data acquisition,
                    management, integration, and archiving made by the
                    interagency climate and other global change data
                    management working group established under subsection
                    (c)(3).
                        (E) National academy of sciences evaluation.--The
                    President shall enter into an agreement with the
                    National Academy of Sciences under which the Academy
                    shall--
                                (i) evaluate the scientific content of the
                            Plan; and
                                (ii) recommend priorities for future global
                            and regional climate change research and
                            assessment.
                        (F) National governors association evaluation.--The
                    President shall enter into an agreement with the
                    National Governors Association Center for Best
                    Practices under which that Center shall--
                                (i) evaluate the utility to State, local,
                            and regional decisionmakers of each Plan and of
                            the anticipated and actual information outputs
                            of the Program for development of State, local,
                            and regional policies to reduce vulnerability
                            to global change; and
                                (ii) recommend priorities for future global
                            and regional climate change research and
                            assessment.
                        (G) Public participation.--In developing the Plan,
                    the President shall consult with representatives of
                    academic, State, industry, and environmental groups.
                    Not later than 90 days before the President submits the
                    Plan, or any revision thereof, to the Congress, a
                    summary of the proposed Plan shall be published in the
                    Federal Register for a public comment period of not
                    less than 60 days.
                (6) Budget coordination.--
                        (A) In general.--The President shall provide
                    general guidance to each Federal agency participating
                    in the Program with respect to the preparation of
                    requests for appropriations for activities related to
                    the Program.
                        (B) Consideration in president's budget.--The
                    President shall submit, at the time of his annual
                    budget request to Congress, a description of those
                    items in each agency's annual budget which are elements
                    of the Program.
                (7) Vulnerability assessment.--
                        (A) Requirement.--Within 1 year after the date of
                    enactment of this Act, and at least once every 5 years
                    thereafter, the President shall submit to the Congress
                    an assessment which--
                                (i) integrates, evaluates, and interprets
                            the findings of the Program and discusses the
                            scientific uncertainties associated with such
                            findings;
                                (ii) analyzes current trends in global
                            change, both human-induced and natural, and
                            projects major trends for the subsequent 25 to
                            100 years;
                                (iii) based on indicators and baselines
                            developed under paragraph (5)(C)(iii), as well
                            as other measurements, analyzes changes to the
                            natural environment, land and water resources,
                            and biological diversity in--
                                        (I) major geographic regions of the
                                    United States; and
                                        (II) other continents;
                                (iv) analyzes the effects of global change,
                            including the changes described in clause
                            (iii), on food and fiber production, energy
                            production and use, transportation, human
                            health and welfare, water availability and
                            coastal infrastructure, and human social and
                            economic systems, including providing
                            information about the differential impacts on
                            specific geographic regions within the United
                            States, on people of different income levels
                            within those regions, and for rural and urban
                            areas within those regions; and
                                (v) summarizes the vulnerability of
                            different geographic regions of the world to
                            global change and analyzes the implications of
                            global change for the United States, including
                            international assistance, population
                            displacement, food and resource availability,
                            and national security.
                        (B) Use of related reports.--To the extent
                    appropriate, the assessment produced pursuant to this
                    paragraph may coordinate with, consider, incorporate,
                    or otherwise make use of related reports, assessments,
                    or information produced by the United States Global
                    Change Research Program, regional, State, and local
                    entities, and international organizations, including
                    the World Meteorological Organization and the
                    Intergovernmental Panel on Climate Change.
                (8) Policy assessment.--Not later than 1 year after the
            date of enactment of this Act, and at least once every 4 years
            thereafter, the President shall enter into a joint agreement
            with the National Academy of Public Administration and the
            National Academy of Sciences under which the Academies shall--
                        (A) document current policy options being
                    implemented by Federal, State, and local governments to
                    mitigate or adapt to the effects of global and regional
                    climate change;
                        (B) evaluate the realized and anticipated
                    effectiveness of those current policy options in
                    meeting mitigation and adaptation goals;
                        (C) identify and evaluate a range of additional
                    policy options and infrastructure for mitigating or
                    adapting to the effects of global and regional climate
                    change;
                        (D) analyze the adoption rates of policies and
                    technologies available to reduce the vulnerability of
                    society to global change with an evaluation of the
                    market and policy obstacles to their adoption in the
                    United States; and
                        (E) evaluate the distribution of economic costs and
                    benefits of these policy options across different
                    United States economic sectors.
                (9) Annual report.--Each year at the time of submission to
            the Congress of the President's budget request, the President
            shall submit to the Congress a report on the activities
            conducted pursuant to this subsection, including--
                        (A) a description of the activities of the Program
                    during the past fiscal year;
                        (B) a description of the activities planned in the
                    next fiscal year toward achieving the goals of the
                    Plan; and
                        (C) a description of the groups or categories of
                    State, local, and regional decisionmakers identified as
                    potential users of the information generated through
                    the Program and a description of the activities used to
                    facilitate consultations with and outreach to these
                    groups, coordinated through the work of the interagency
                    committee.
                (10) Relation to other authorities.--The President shall--
                        (A) ensure that relevant research, assessment, and
                    outreach activities of the National Climate Program,
                    established by the National Climate Program Act (15
                    U.S.C. 2901 et seq.), are considered in developing
                    national global and regional climate change research
                    and assessment efforts; and
                        (B) facilitate ongoing dialog and information
                    exchange with regional, State, and local governments
                    and other user communities through programs authorized
                    in the National Climate Program Act (15 U.S.C. 2901 et
                    seq.).
                (11) Repeal.--The Global Change Research Act of 1990 (15
            U.S.C. 2921 et seq.) is amended by striking titles I and III
            thereof.
                (12) Global change research information.--The President
            shall establish or designate a Global Change Research
            Information Exchange to make scientific research and other
            information produced through or utilized by the Program which
            would be useful in preventing, mitigating, or adapting to the
            effects of global change accessible through electronic means.
                (13) Ice sheet study and report.--
                        (A) Study.--
                                (i) Requirement.--The Director of the
                            National Science Foundation and the
                            Administrator of National Oceanic and
                            Atmospheric Administration shall enter into an
                            arrangement with the National Academy of
                            Sciences to complete a study of the current
                            status of ice sheet melt, as caused by climate
                            change, with implications for global sea level
                            rise.
                                (ii) Contents.--The study shall take into
                            consideration--
                                        (I) the past research completed
                                    related to ice sheet melt as reviewed
                                    by Working Group I of the
                                    Intergovernmental Panel on Climate
                                    Change;
                                        (II) additional research completed
                                    since the fall of 2005 that was not
                                    included in the Working Group I report
                                    due to time constraints; and
                                        (III) the need for an accurate
                                    assessment of changes in ice sheet
                                    spreading, changes in ice sheet flow,
                                    self-lubrication, the corresponding
                                    effect on ice sheets, and current
                                    modeling capabilities.
                        (B) Report.--Not later than 18 months after the
                    date of enactment of this Act, the National Academy of
                    Sciences shall transmit to the Committee on Science and
                    Technology of the House of Representatives and the
                    Committee on Commerce, Science, and Transportation of
                    the Senate a report on the key findings of the study
                    conducted under subparagraph (A), along with
                    recommendations for additional research related to ice
                    sheet melt and corresponding sea level rise.
                (14) Hurricane frequency and intensity study and report.--
                        (A) Study.--
                                (i) Requirement.--The Administrator of the
                            National Oceanic and Atmospheric Administration
                            and the Director of the National Science
                            Foundation shall enter into an arrangement with
                            the National Academy of Sciences to complete a
                            study of the current state of the science on
                            the potential impacts of climate change on
                            patterns of hurricane and typhoon development,
                            including storm intensity, track, and
                            frequency, and the implications for hurricane-
                            prone and typhoon-prone coastal regions.
                                (ii) Contents.--The study shall take into
                            consideration--
                                        (I) the past research completed
                                    related to hurricane and typhoon
                                    development, track, and intensity as
                                    reviewed by Working Groups I and II of
                                    the Intergovernmental Panel on Climate
                                    Change;
                                        (II) additional research completed
                                    since the fall of 2005 that was not
                                    included in the Working Group I and II
                                    reports due to time constraints;
                                        (III) the need for accurate
                                    assessment of potential changes in
                                    hurricane and typhoon intensity, track,
                                    and frequency and of the current
                                    modeling and forecasting capabilities
                                    and the need for improvements in
                                    forecasting of these parameters; and
                                        (IV) the need for additional
                                    research and monitoring to improve
                                    forecasting of hurricanes and typhoons
                                    and to understand the relationship
                                    between climate change and hurricane
                                    and typhoon development.
                        (B) Report.--Not later than 18 months after the
                    date of enactment of this Act, the National Academy of
                    Sciences shall transmit to the Committee on Science and
                    Technology of the House of Representatives and the
                    Committee on Commerce, Science, and Transportation of
                    the Senate a report on the key findings of the study
                    conducted under subparagraph (A).
        (c) Climate and Other Global Change Data Management.--
                (1) Purposes.--The purposes of this subsection are to
            establish climate and other global change data management and
            archiving as Federal agency missions, and to establish Federal
            policies for managing and archiving climate and other global
            change data.
                (2) Definitions.--For purposes of this subsection--
                        (A) the term ``metadata'' means information
                    describing the content, quality, condition, and other
                    characteristics of climate and other global change
                    data, compiled, to the maximum extent possible,
                    consistent with the requirements of the ``Content
                    Standard for Digital Geospatial Metadata'' (FGDC-STD-
                    001-1998) issued by the Federal Geographic Data
                    Committee, or any successor standard approved by the
                    working group; and
                        (B) the term ``working group'' means the
                    interagency climate and other global change data
                    management working group established under paragraph
                    (3).
                (3) Interagency climate and other global change data
            management working group.--
                        (A) Establishment.--The President shall establish
                    or designate an interagency climate and other global
                    change data management working group to make
                    recommendations for coordinating Federal climate and
                    other global change data management and archiving
                    activities.
                        (B) Membership.--The working group shall include
                    the Administrator of the National Aeronautics and Space
                    Administration, the Administrator of the National
                    Oceanic and Atmospheric Administration, the Secretary
                    of Energy, the Secretary of Defense, the Director of
                    the National Science Foundation, the Director of the
                    United States Geological Survey, the Archivist of the
                    United States, the Administrator of the Environmental
                    Protection Agency, the Secretary of the Smithsonian
                    Institution, or their designees, and representatives of
                    any other Federal agencies the President considers
                    appropriate.
                        (C) Reports.--Not later than 1 year after the date
                    of enactment of this Act, the working group shall
                    transmit a report to the Congress containing the
                    elements described in subparagraph (D). Not later than
                    4 years after the initial report under this
                    subparagraph, and at least once every 4 years
                    thereafter, the working group shall transmit reports
                    updating the previous report. In preparing reports
                    under this subparagraph, the working group shall
                    consult with expected users of the data collected and
                    archived by the Program.
                        (D) Contents.--The reports and updates required
                    under subparagraph (C) shall--
                                (i) include recommendations for the
                            establishment, maintenance, and accessibility
                            of a catalog identifying all available climate
                            and other global change data sets;
                                (ii) identify climate and other global
                            change data collections in danger of being lost
                            and recommend actions to prevent such loss;
                                (iii) identify gaps in climate and other
                            global change data and recommend actions to
                            fill those gaps;
                                (iv) identify effective and compatible
                            procedures for climate and other global change
                            data collection, management, and retention and
                            make recommendations for ensuring their use by
                            Federal agencies and other appropriate
                            entities;
                                (v) develop and propose a coordinated
                            strategy for funding and allocating
                            responsibilities among Federal agencies for
                            climate and other global change data
                            collection, management, and retention;
                                (vi) make recommendations for ensuring that
                            particular attention is paid to the collection,
                            management, and archiving of metadata;
                                (vii) make recommendations for ensuring a
                            unified and coordinated Federal capital
                            investment strategy with respect to climate and
                            other global change data collection,
                            management, and archiving;
                                (viii) evaluate the data record from each
                            observing system and make recommendations to
                            ensure that delivered data are free from time-
                            dependent biases and random errors before they
                            are transferred to long-term archives; and
                                (ix) evaluate optimal design of observation
                            system components to ensure a cost-effective,
                            adequate set of observations detecting and
                            tracking global change.

    SEC. 452. NATIONAL CLIMATE SERVICE.

        (a) Short Title.--This section may be cited as the ``National
    Climate Service Act of 2009''.
        (b) Purpose.--The purpose of this section is to establish a
    National Climate Service and to define the activities to be undertaken
    within the National Oceanic and Atmospheric Administration to--
                (1) advance understanding of climate variability and change
            at the global, national, regional, and local levels;
                (2) provide forecasts, warnings, and other information to
            the public on variability and change in weather and climate
            that affect geographic areas, natural resources,
            infrastructure, economic sectors, and communities; and
                (3) support development of adaptation and response plans by
            Federal agencies, State, local, and tribal governments, the
            private sector, and the public.
        (c) Definitions.--In this section:
                (1) Advisory committee.--The term ``Advisory Committee''
            means the Climate Service Advisory Committee established under
            subsection (f).
                (2) Director.--The term ``Director'' means the Director of
            the Climate Service Office.
                (3) Representative.--The term ``representative'' means an
            individual who is not a full-time or part-time employee of the
            Federal Government and who is appointed to an advisory
            committee to represent the views of an entity or entities
            outside the Federal Government.
                (4) Special government employee.--The term ``Special
            Government Employee'' has the same meaning as in section 202(a)
            of title 18, United States Code.
                (5) Under secretary.--The term ``Under Secretary'' means
            the Under Secretary of Commerce for Oceans and Atmosphere.
        (d) Interagency Development of a National Climate Service.--
                (1) In general.--The President shall--
                        (A) initiate a process within 30 days after the
                    date of enactment of this Act through the Committee on
                    Environment and Natural Resources of the National
                    Science and Technology Council and led by the Director
                    of the Office of Science and Technology Policy, to
                    evaluate alternative structures to support a
                    collaborative, interagency research and operational
                    program that will achieve the goal of meeting the needs
                    of decisionmakers in--
                                (i) Federal agencies;
                                (ii) State, local, and tribal governments;
                                (iii) regional entities and other
                            stakeholders and users,
                    for reliable, timely, and relevant information related
                    to climate variability and change;
                        (B) within 1 year after the date of enactment of
                    this Act complete pursuant to paragraph (2) a survey of
                    the needs of current and future users of information
                    related to climate variability and change;
                        (C) within 2 years after the date of enactment of
                    this Act report to Congress under paragraph (3) the
                    results of the evaluation described in subparagraph (A)
                    and provide a plan to establish a collaborative,
                    interagency research and operational program to deliver
                    information related to climate variability and change
                    to all users; and
                        (D) within 3 years after the date of enactment of
                    this Act, and after delivery of the report to Congress
                    required under subparagraph (C), establish a National
                    Climate Service, based upon the information obtained
                    through the process described in subparagraph (A), that
                    meets the goal described in subparagraph (A).
                (2) Survey of need for climate services.--
                        (A) In general.--The Director of the Office of
                    Science and Technology Policy, through the Committee on
                    Environment and Natural Resources, shall provide a
                    report to Congress within 1 year after the date of
                    enactment of this Act that compiles information on the
                    current climate products being delivered by each
                    Federal agency and its partner organizations to users
                    and stakeholders, and on the needs of users and
                    stakeholders for new climate products and services.
                        (B) Contents of the report.--The report shall
                    identify--
                                (i) specific user groups and stakeholders
                            that currently are served by each Federal
                            agency and its partner organizations;
                                (ii) the type of climate products and
                            services currently delivered to specific users
                            groups and stakeholders, and the specific
                            Federal agency office, program, or partner
                            organization that delivers these products and
                            services;
                                (iii) potential user groups and
                            stakeholders that may be served by expanding
                            climate products and services;
                                (iv) specific needs for new climate
                            products and services to be delivered by each
                            Federal agency and its partner organizations
                            identified by user groups and stakeholders;
                                (v) a characterization of the different
                            user and stakeholder groups that were surveyed
                            by each Federal agency; and
                                (vi) a list of non-Federal entities that
                            deliver climate products and services.
                (3) Report to congress.--
                        (A) In general.--Within 2 years after the date of
                    enactment of this Act, the Director of the Office of
                    Science and Technology Policy shall report to the
                    President and the Congress on a proposal, prepared
                    through the Committee on Environment and Natural
                    Resources, to establish and operate a National Climate
                    Service. The report shall include--
                                (i) a description of the alternative
                            structures considered;
                                (ii) a description of the structure
                            proposed for a National Climate Service,
                            including a discussion of the benefits of this
                            structure as compared to the alternatives
                            considered;
                                (iii) designation of a specific office or
                            agency that will lead the National Climate
                            Service and that shall be accountable for the
                            daily operation of the National Climate
                            Service;
                                (iv) a description of the role and
                            capability of each Federal agency, including a
                            list of all entities within each agency or
                            supported with agency funds that currently
                            provide or may provide climate products or
                            services;
                                (v) a description of the mechanisms that
                            will be used to ensure ongoing communication
                            and information exchange among the Federal
                            agencies and between Federal agencies and their
                            respective user and stakeholder communities
                            including--
                                        (I) mechanisms to facilitate
                                    ongoing dialogue with non-Federal
                                    organizations providing climate
                                    services;
                                        (II) mechanisms to facilitate
                                    ongoing dialogue with regional, State,
                                    local, and tribal governments, the
                                    private sector, and other users and
                                    stakeholders on the development and
                                    delivery of climate services;
                                        (III) mechanisms to collect
                                    information, observations, and other
                                    data relevant for improving climate
                                    products and services; and
                                        (IV) designation of points of
                                    contact for each Federal agency with
                                    responsibilities to deliver climate
                                    services;
                                (vi) a detailed description of the
                            processes and procedures that will be necessary
                            to coordinate observations and information
                            collection by different Federal agencies to
                            ensure the compatibility of information and to
                            facilitate data and information exchange among
                            Federal agencies and with non-Federal entities,
                            and a designation of the agency or agencies
                            that would be responsible for ongoing oversight
                            of these functions;
                                (vii) a detailed description of how
                            research findings and climate impact
                            assessments produced through the United States
                            Global Change Research Program and the other
                            activities undertaken within the United States
                            Global Change Research Program would be
                            integrated with the activities undertaken by a
                            National Climate Service;
                                (viii) a list of the existing observation
                            and monitoring systems or programs operated by
                            each Federal agency that provide data,
                            observations, and other information that may be
                            used to develop or improve climate products and
                            services;
                                (ix) a description of new infrastructure,
                            equipment, personnel or other resources, by
                            agency, that may be needed to achieve the goals
                            of a National Climate Service, and the time
                            period over which these new resources will be
                            allocated;
                                (x) an identification of the activities
                            that may be undertaken in cooperation with
                            international partners;
                                (xi) the mechanisms established to provide
                            quality assurance and quality control of
                            climate service products and services, and the
                            agency or agencies designated to conduct and
                            oversee these mechanisms;
                                (xii) an identification of non-Federal
                            entities that provide climate products and
                            services, and a description of the relationship
                            envisioned between a National Climate Service
                            and the non-Federal entities providing climate
                            services; and
                                (xiii) responses to the comments received
                            during the public comment period.
                        (B) Draft report.--Prior to the submission of the
                    final report, the Director of the Office of Science and
                    Technology Policy shall publish a draft report in the
                    Federal Register with a comment period of at least 30
                    days.
                        (C) Consultation.--In developing the report, the
                    Director of the Office of Science and Technology Policy
                    shall consult with State, local, and tribal
                    governments, regional entities, the private sector, and
                    other users and stakeholder groups, and Congress.
                (4) Annual report.--The Director of the Office of Science
            and Technology Policy shall transmit to the Congress at the
            time of the President's fiscal year 2013 budget request, and
            annually thereafter, a report on the annual anticipated cost of
            carrying out the research and operational activities of the
            National Climate Service, with a description of the budget for
            each Federal agency's activities.
        (e) Climate Service Program.--
                (1) In general.--The Under Secretary, building upon the
            resources of the National Weather Service and other weather and
            climate programs in the National Oceanic and Atmospheric
            Administration, shall establish a Climate Service Program.
                (2) Climate service office.--The Under Secretary shall
            establish a Climate Service Office and shall appoint a Director
            of the Office to collaborate with the leadership of the
            National Oceanic and Atmospheric Administration line offices to
            perform the duties assigned to the Office. The Climate Service
            Office shall--
                        (A) coordinate programs at the National Oceanic and
                    Atmospheric Administration to ensure the timely
                    production and distribution of data and information on
                    global, national, regional, and local climate
                    variability and change over all time scales relevant
                    for planning and response, including intraseasonal,
                    interannual, decadal, and multidecadal time periods;
                        (B) ensure exchange of information between the
                    research and operational offices at the National
                    Oceanic and Atmospheric Administration to identify
                    research needs for improving climate products and
                    services and ensure the timely and orderly transition
                    of research findings, improved technologies, models,
                    and other tools to the National Oceanic and Atmospheric
                    Administration's operations;
                        (C) ensure operational quality control of all
                    Climate Service Program products including a
                    transparent and open accounting of all the assumptions
                    built into the global, national, regional, and local
                    weather and climate computer models upon which such
                    products are based;
                        (D) ensure a continuous level of high-quality data
                    collected through a national observation and monitoring
                    infrastructure, including at a minimum performing
                    regular maintenance and verification, and periodic
                    upgrades;
                        (E) serve as liaison to and exchange information
                    with other Federal agencies that provide climate
                    services in order to--
                                (i) ensure the timely dissemination of data
                            and information on weather and climate produced
                            by the National Oceanic and Atmospheric
                            Administration to other Federal agencies;
                                (ii) ensure that data and information
                            collected by other Federal agencies relevant to
                            improving climate services are made available
                            to the National Oceanic and Atmospheric
                            Administration;
                                (iii) facilitate the development and
                            delivery of climate products and services to
                            relevant stakeholders; and
                                (iv) obtain information from other Federal
                            agencies to improve the development and
                            dissemination by the National Oceanic and
                            Atmospheric Administration of information on
                            weather and climate to other Federal agencies
                            for the development of climate service products
                            by those agencies;
                        (F) ensure cooperation and collaboration, as
                    appropriate, of the Climate Service Program with State,
                    local, and tribal governments, regional entities,
                    academic and nonprofit research organizations, and
                    private sector entities, including weather information
                    providers and other stakeholders; and
                        (G) ensure exchange of data, information, and
                    research with the United States Global Change Research
                    Program to support the development of assessments
                    required under the Global Change Research Act of 1990
                    (15 U.S.C. 2921 et seq.).
                (3) Climate service program.--
                        (A) In general.--The Under Secretary shall operate
                    the Climate Service Program through a national center,
                    the Climate Service Office, and a network of regional
                    and local facilities, including the established
                    regional and local offices of the National Weather
                    Service, 6 Regional Climate Centers, the offices of the
                    Regional Integrated Sciences and Assessments program,
                    the National Integrated Drought Information System, and
                    any other National Oceanic and Atmospheric
                    Administration or National Oceanic and Atmospheric
                    Administration-supported regional and local entities,
                    as appropriate.
                        (B) Regional climate centers program.--The Under
                    Secretary shall maintain a network of 6 Regional
                    Climate Centers to work cooperatively with the State
                    Climate Offices to--
                                (i) collect and exchange data and
                            information needed to characterize, understand,
                            and forecast regional and local weather and
                            climate;
                                (ii) facilitate collection and exchange of
                            data and information between the States and
                            Federal Government on weather and climate in
                            conjunction with the National Climatic Data
                            Center;
                                (iii) support research and observations;
                                (iv) obtain input on stakeholder needs for
                            weather and climate information and products;
                            and
                                (v) support State and local adaptation and
                            response planning.
                        (C) Regional integrated sciences and assessments
                    program.--The Under Secretary shall maintain a network
                    of offices as part of the Regional Integrated Sciences
                    and Assessments Program. Such offices shall engage in
                    cooperative research, development, and demonstration
                    projects with the academic community, State Climate
                    Offices, Regional Climate Offices, and other users and
                    stakeholders on climate products, technologies, models,
                    and other tools to improve understanding and
                    forecasting of regional and local climate variability
                    and change and the effects on economic activities,
                    natural resources, and water availability, and other
                    effects on communities, to facilitate development of
                    regional and local adaptation plans to respond to
                    climate variability and change, and any other needed
                    research identified by the Under Secretary or the
                    Advisory Committee.
                        (D) Other offices.--In carrying out the functions
                    of the Climate Service Program, the Under Secretary
                    shall utilize the assets and expertise of--
                                (i) the National Weather Service to--
                                        (I) deliver operational weather and
                                    climate forecasts, warnings, products,
                                    and information through the Climate
                                    Service Programs Division, Local
                                    Weather Forecast Offices, Weather
                                    Service Offices, and River Forecast
                                    Centers; and
                                        (II) develop climate forecast
                                    models and tools through the National
                                    Centers for Environmental Prediction;
                                (ii) the National Environmental Satellite,
                            Data, and Information Service to provide data
                            services and support for product development
                            and operations through the National Climatic
                            Data Center and the Regional Climate Centers;
                                (iii) the Office of Oceanic and Atmospheric
                            Research to--
                                        (I) provide research on product
                                    development;
                                        (II) improve weather and climate
                                    forecast models;
                                        (III) provide new technologies and
                                    methods of observation; and
                                        (IV) oversee the National Oceanic
                                    and Atmospheric Administration
                                    supported research performed by the
                                    Joint Cooperative Institutes,
                                    universities, and other non-Federal
                                    entities;
                                (iv) the National Integrated Drought
                            Information System to--
                                        (I) provide an effective drought
                                    warning system;
                                        (II) coordinate and integrate
                                    Federal research on droughts;
                                        (III) collect and integrate
                                    information on key indicators of
                                    drought;
                                        (IV) make usable, reliable, and
                                    timely forecasts and assessments of
                                    drought, including assessments of the
                                    severity of drought conditions and
                                    effects;
                                        (V) communicate drought forecasts,
                                    conditions, and effects to Federal,
                                    State, tribal, and local governments,
                                    regional entities, the private sector,
                                    and the public; and
                                        (VI) coordinate with State Climate
                                    Offices and RISA teams to assess
                                    management practices and technologies,
                                    and the effects of both, used for
                                    drought mitigation at the local, State,
                                    and regional levels; and
                                (v) any other National Oceanic and
                            Atmospheric Administration offices or programs,
                            as appropriate.
                        (E) Mission.--The Under Secretary shall ensure that
                    the core functions and missions of the National Weather
                    Service, the National Integrated Drought Information
                    System, and any other programs within the National
                    Oceanic and Atmospheric Administration are not
                    diminished or neglected by the establishment of the
                    Climate Service Program or the duties imposed on such
                    offices or programs under this paragraph.
                        (F) Program elements.--The Climate Service Program
                    shall--
                                (i) conduct analyses of and studies
                            relating to the effects of weather and climate
                            on communities, including effects on
                            agricultural production, natural resources,
                            energy supply and demand, recreation, and other
                            sectors of the economy;
                                (ii) carry out observations, data
                            collection, and monitoring of atmospheric and
                            oceanic conditions on a statewide, regional,
                            national, and global basis;
                                (iii) provide information and technical
                            support for Federal, regional, State, tribal,
                            and local government efforts to assess and
                            respond to climate variability and change;
                                (iv) develop systems for the management and
                            dissemination of data, information, and
                            assessments, including mechanisms for
                            consultation with current and potential users
                            and other stakeholders;
                                (v) conduct research to improve
                            forecasting, characterization, and
                            understanding of weather and climate
                            variability and change and its effects on
                            communities, including its effects on
                            agricultural production, natural resources,
                            energy supply and demand, recreation, and other
                            sectors of the economy; and
                                (vi) develop tools to facilitate the use of
                            climate information by local and regional
                            stakeholders.
        (f) Climate Service Advisory Committee.--
                (1) In general.--The Under Secretary shall establish a
            Climate Service Advisory Committee to provide advice on--
                        (A) climate service product development;
                        (B) delivery of services to decisionmakers and
                    other stakeholders;
                        (C) infrastructure to support observations and
                    monitoring;
                        (D) computation and modeling needs, research needs,
                    and other resources needed to develop, distribute, and
                    ensure the utility of climate data, products, and
                    services; and
                        (E) any other topics as may be requested by the
                    Under Secretary or Congress.
                (2) Members.--
                        (A) In general.--The Advisory Committee shall be
                    composed of at least 25 members appointed by the Under
                    Secretary. Each member of the Advisory Committee shall
                    be qualified either--
                                (i) by education, training, and experience
                            to evaluate scientific and technical
                            information on matters referred to the Advisory
                            Committee under this subsection; or
                                (ii) to evaluate the utility and need for
                            climate products by planners, decisionmakers,
                            the private sector, and the public.
                        (B) Terms of service.--Members shall be appointed
                    for 3-year terms, renewable once, and shall serve at
                    the discretion of the Under Secretary. Vacancy
                    appointments shall be for the remainder of the
                    unexpired term of the vacancy, and an individual so
                    appointed may subsequently be appointed for 2 full 3-
                    year terms if the remainder of the unexpired term is
                    less than 1 year.
                        (C) Chairperson.--The Under Secretary shall
                    designate a chairperson from among the members of the
                    Advisory Committee. The designated Chairperson shall
                    alternate between a member who is appointed as a
                    representative and a member who is appointed as a
                    Special Government Employee.
                        (D) Subcommittees.--
                                (i) Establishment.--The Advisory Committee
                            shall establish--
                                        (I) a Subcommittee on Science and
                                    Technology to advise the Climate
                                    Service Program on needed research,
                                    technology development, and additional
                                    observations, and on any other
                                    scientific or technical issues as
                                    appropriate; and
                                        (II) a Subcommittee on Product
                                    Development and Delivery composed
                                    primarily of representatives of the
                                    community of potential users of the
                                    products developed and delivered by the
                                    Climate Service Program.
                            The Advisory Committee may establish such
                            additional subcommittees of its members as may
                            be necessary.
                                (ii) Appointment.--
                                        (I) Full advisory committee.--At
                                    least 50 percent of the members of the
                                    Advisory Committee shall be appointed
                                    as Special Government Employees.
                                        (II) Subcommittees.--At least 75
                                    percent of the members of the
                                    Subcommittee on Science and Technology
                                    shall be appointed as Special
                                    Government Employees. Not more than 25
                                    percent of the members of the
                                    Subcommittee on Product Development and
                                    Delivery shall be appointed as Special
                                    Government Employees.
                (3) Administrative provisions.--
                        (A) Reporting.--The Advisory Committee shall report
                    to the Under Secretary and the appropriate requesting
                    party.
                        (B) Administrative support.--The Under Secretary
                    shall provide administrative support to the Advisory
                    Committee.
                        (C) Meetings.--The Advisory Committee shall meet at
                    least twice each year and at other times at the call of
                    the Under Secretary or the Chairperson.
                        (D) Compensation and expenses.--A member of the
                    Advisory Committee shall not be compensated for service
                    on the Advisory Committee, but may be allowed travel
                    expenses, including per diem in lieu of subsistence, in
                    accordance with subchapter I of chapter 57 of title 5,
                    United States Code.
                (4) Expiration.--Section 14 of the Federal Advisory
            Committee Act (5 U.S.C. App.) shall not apply to the Climate
            Service Advisory Committee.
        (g) Repeal.--The National Climate Program Act (15 U.S.C. 2901 et
    seq.) is repealed.
        (h) Establishment of Regional Integrated Sciences and Assessments
    Teams.--
                (1) In general.--In maintaining the network of Regional
            Integrated Sciences and Assessments (RISA) Teams under
            subsection (e)(3)(C), the Under Secretary shall utilize a
            competitive, peer-reviewed selection process. Teams shall
            conduct applied regional climate research and projects to
            address the needs of local and regional decisionmakers for
            information and tools to develop adaptation and response plans
            to climate variability and change. The awards shall be
            administered through a cooperative agreement between the
            National Oceanic and Atmospheric Administration and the RISA
            Team. Each award shall be for a period of 5 years.
                (2) RISA teams.--Teams shall be composed of multi-
            institutional partnerships whose individual members may
            include--
                        (A) institutions of higher education, as defined in
                    section 101(a) of the Higher Education Act of 1965 (20
                    U.S.C. 1001(a));
                        (B) minority serving institutions, as defined in
                    section 371(a) of the Higher Education Act of 1965; and
                        (C) nongovernmental research organizations, Federal
                    agencies, State and local agencies, tribal
                    organizations, and for-profit entities.
                (3) Considerations.--In making awards under this
            subsection, the Under Secretary shall consider--
                        (A) the overall geographic distribution of RISA
                    Teams and existing gaps in applied research to support
                    local and regional decisionmakers;
                        (B) the team's ability to contribute to the
                    National Oceanic and Atmospheric Administration's
                    efforts to deliver climate services in the region; and
                        (C) the team's proposal to integrate social and
                    physical sciences research to address the effects of
                    climate variability and change on the ecology, economy,
                    infrastructure, and communities in the region.
        (i) Survey of Need for Climate Services.--
                (1) In general.--The Under Secretary shall provide a report
            to Congress within 9 months after the date of enactment of this
            Act that compiles information on the current climate products
            being delivered by the National Oceanic and Atmospheric
            Administration and its partner organizations to users and
            stakeholders and on the needs of users and stakeholders for new
            climate products and services.
                (2) Contents of report.--The report shall identify--
                        (A) specific user groups and stakeholders that
                    currently are served by the National Oceanic and
                    Atmospheric Administration and its partner
                    organizations;
                        (B) the type of climate products and services
                    currently delivered to specific user groups and
                    stakeholders and the specific National Oceanic and
                    Atmospheric Administration office or partner
                    organization that delivers these products and services;
                        (C) potential user groups and stakeholders that may
                    be served by expanding climate products and services;
                    and
                        (D) specific needs for new climate products and
                    services identified by user groups and stakeholders.
                (3) Consultation.--The Under Secretary shall consult with
            the Climate Service Advisory Committee in the preparation of
            this report.
        (j) Implementation Plan.--
                (1) In general.--The Under Secretary shall prepare a plan
            for creating a Climate Service Program in the National Oceanic
            and Atmospheric Administration and delivering climate products
            and services to the National Oceanic and Atmospheric
            Administration users and stakeholders. The plan shall be
            submitted to the President and the Congress within 1 year after
            the date of enactment of this Act.
                (2) Draft plan.--Prior to the submission of the final plan,
            the Under Secretary shall publish a draft plan in the Federal
            Register with a public comment period of at least 30 days.
                (3) Contents.--The plan shall--
                        (A) identify the current gaps in climate services
                    and outline the process and resources the National
                    Oceanic and Atmospheric Administration will use to fill
                    these gaps;
                        (B) describe the roles of the National Oceanic and
                    Atmospheric Administration line offices and the
                    National Oceanic and Atmospheric Administration partner
                    organizations in the development and delivery of
                    climate products and services;
                        (C) describe the development and implementation of
                    quality assurance and control mechanisms for climate
                    products and services delivered by the National Oceanic
                    and Atmospheric Administration and its partner
                    organizations;
                        (D) identify the mechanisms and opportunities for
                    determining user needs and engaging in a two-way
                    dialogue with users that will inform climate product
                    and service development and delivery of authoritative,
                    timely, and useful information on climate variability
                    and change and the effects on local, State, regional,
                    national, and global scales;
                        (E) identify new responsibilities or tasks to be
                    undertaken by existing National Oceanic and Atmospheric
                    Administration line offices and partner organizations;
                        (F) identify new infrastructure, equipment,
                    personnel, or other resources needed to implement the
                    proposed plan; and
                        (G) include responses to the comments received
                    during the public comment period.
                (4) Continuity of service.--During the development of the
            implementation plan, the public comment period, and final plan,
            the National Oceanic and Atmospheric Administration shall
            continue to provide climate services to the user community.
                (5) Consultation.--In developing the plan, the Under
            Secretary shall consult with user groups and stakeholders,
            State Climate Offices, Regional Climate Centers, other Federal
            agencies, the Climate Service Advisory Committee, and Congress.
                (6) Coordination with interagency development of a national
            climate service.--In preparing the plan required under this
            subsection, the Under Secretary shall consult with the Director
            of the Office of Science and Technology Policy to ensure that
            the program developed by the Agency will serve the needs of a
            National Climate Service.
        (k) Summer Institutes Program at the Regional Climate Centers.--
                (1) Definitions.--In this subsection:
                        (A) Summer institute.--The term ``summer
                    institute'' means an institute, operated during the
                    summer, that--
                                (i) is hosted by a Regional Climate Center
                            or an eligible partner;
                                (ii) is operated for a period of not less
                            than 2 weeks; and
                                (iii) provides direct interaction of middle
                            school and high school teacher and
                            undergraduate student participants with
                            personnel of the Regional Climate Centers or
                            eligible partners who have scientific expertise
                            in weather and climate.
                        (B) Eligible partner.--The term ``eligible
                    partner'' means--
                                (i) the science, engineering, or
                            mathematics department at an institution of
                            higher education; or
                                (ii) a nonprofit entity with expertise in
                            providing educational enrichment experiences
                            for students.
                (2) Summer institutes program authorized.--
                        (A) In general.--The Under Secretary shall
                    establish a summer institutes program, to be conducted
                    in cooperation with the Regional Climate Centers, which
                    may include an eligible partner. The purpose of the
                    program is to provide training and professional
                    enrichment by providing opportunities for interaction
                    between participants and climate scientists in a
                    research and operational setting to--
                                (i) enable middle school and high school
                            teachers to integrate weather and climate
                            sciences into their curricula: and
                                (ii) encourage undergraduate students to
                            pursue further study and careers in weather and
                            climate sciences.
                        (B) Required activities.--Funds authorized under
                    this subsection shall be used for--
                                (i) providing educational opportunities for
                            middle school and high school teachers and
                            undergraduate students not achievable inside
                            the classroom;
                                (ii) exposing such teachers and students to
                            researchers, scientists, or engineers who can
                            demonstrate their daily activities to the
                            teachers and students;
                                (iii) exposing teachers and students to
                            scientific methods in a research discovery
                            setting; and
                                (iv) assisting teachers with curriculum
                            development in the areas of weather and climate
                            science.
                (3) Priority.--The Under Secretary shall ensure that each
            summer institute program authorized under paragraph (2)
            includes students from groups underrepresented in the fields of
            science, technology, engineering, and mathematics teaching,
            including women and members of minority groups.
                (4) Report to congress.--The Under Secretary shall submit
            to Congress a biennial report on the activities conducted under
            this subsection, including the number of participants and the
            new curricula developed in atmospheric and climate sciences.
        (l) Clearinghouse of Federal Climate Service Products and Links to
    Federal Agencies Providing Climate Services.--
                (1) In general.--The Under Secretary shall establish and
            maintain a clearinghouse to inform State, local, and tribal
            governments and the public about the information and services
            available to--
                        (A) assess the impacts of climate variability and
                    change at different geographic scales;
                        (B) characterize and forecast climate variability
                    and change for specific regions, resources, and
                    economic sectors; and
                        (C) develop and implement adaptation strategies to
                    reduce vulnerabilities to climate variability and
                    change.
                (2) Other resources.--The clearinghouse shall include
            hyperlinks to Internet sites that describe the activities,
            information, and resources of--
                        (A) the Federal Government;
                        (B) State and local governments;
                        (C) the private sector;
                        (D) nongovernmental and nonprofit entities and
                    organizations; and
                        (E) international organizations.
        (m) Financial Burden.--Nothing in this section shall be construed
    as authorizing the National Climate Service or the Climate Service
    Program at the National Oceanic and Atmospheric Administration to
    require State, tribal, or local governments to develop adaptation or
    response plans or to take any other action in response to variations in
    climate that may result in an increased financial burden to such
    governments.

    SEC. 453. STATE PROGRAMS TO BUILD RESILIENCE TO CLIMATE CHANGE IMPACTS.

        (a) Definitions.--For purposes of this section:
                (1) Allowance.--The term ``allowance'' means an emission
            allowance established under section 721 of the Clean Air Act
            (as added by section 311 of this Act).
                (2) 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).
                (3) Vintage year.--The term ``vintage year'' has the
            meaning given that term under section 700 of the Clean Air Act
            (as added by section 312 of this Act).
        (b) Regulations; Coordination.--Not later than 2 years after the
    date of enactment of this Act, the Administrator, or such Federal
    agency head or heads as the President may designate, shall promulgate
    regulations to implement the requirements of this section. If the
    President designates more than 1 Federal agency to implement this
    section, the President shall require such agencies to establish a
    memorandum of understanding providing for coordination of rulemaking
    and other implementing activities, in accordance with the requirements
    of this section.
        (c) Distribution of Allowances.--
                (1) In general.--Not later than September 30 of each of
            calendar years 2011 through 2049, the Administrator shall
            distribute, in accordance with this section, allowances
            allocated for the following vintage year pursuant to section
            782(l) of the Clean Air Act (as added by section 321 of this
            Act). The Administrator shall reserve 1 percent of such
            allowances for distribution to Indian tribes in accordance with
            subsection (d). The remainder of such allowances shall be
            distributed ratably among the States based on the product of--
                        (A) each State's population; and
                        (B) each State's allocation factor as determined
                    under paragraph (2).
                (2) State allocation factors.--
                        (A) In general.--Except as provided in subparagraph
                    (B), the allocation factor for a State shall be the
                    quotient of--
                                (i) the per capita income of all
                            individuals in the United States, divided by
                                (ii) the per capita income of all
                            individuals in such State.
                        (B) Limitation.--If the allocation factor for a
                    State as calculated under subparagraph (A) would exceed
                    1.2, then the allocation factor for such State shall be
                    1.2. If the allocation factor for a State as calculated
                    under subparagraph (A) would be less than 0.8, then the
                    allocation factor for such State shall be 0.8.
                        (C) Per capita income.--For purposes of this
                    paragraph, per capita income shall be--
                                (i) determined at 2-year intervals; and
                                (ii) subject to subparagraph (D), equal to
                            the average of the annual per capita incomes
                            for the most recent period of 3 consecutive
                            years for which satisfactory data are available
                            from the Department of Commerce at the time
                            such determination is made.
                        (D) Revenue directly resulting from a
                    presidentially declared major disaster.--For purposes
                    of this paragraph, per capita income from one or more
                    of the following sources shall be reduced or excluded
                    if the Secretary of Commerce (in consultation with the
                    Administrator and the secretaries or administrators of
                    the departments or agencies involved) determines that
                    the income accrues to persons as the result of a Major
                    Disaster (as declared by the President of the United
                    States) and if the Secretary finds that the inclusion
                    of one or more of these income sources, in whole or in
                    part, results in a transitory, rather than a
                    sustainable, increase in a State's per capita income
                    level relative to the national average:
                                (i) Property and casualty insurance
                            (including homeowners and renters insurance).
                                (ii) The National Flood Insurance Program
                            of the Federal Emergency Management Agency.
                                (iii) The Individual and Family Grants
                            Program of the Federal Emergency Management
                            Agency.
                                (iv) The Disaster Housing Program of the
                            Federal Emergency Management Agency.
                                (v) The Community Development Block Grant
                            Program of the Department of Housing and Urban
                            Development.
                                (vi) The Disaster Unemployment Assistance
                            Program of the Department of Labor.
                                (vii) Any other source determined
                            appropriate by the Administrator.
        (d) Distribution to Indian Tribes.--The Administrator, or such
    Federal agency head or heads as the President may designate, shall
    promulgate regulations establishing a program to distribute allowances
    on a competitive basis to Indian tribes, in accordance with the
    requirements of this section. Such allowances shall be used exclusively
    in accordance with the requirements of subsection (e). Beginning with
    vintage year 2015, Indian tribes with a tribal adaptation plan approved
    pursuant to subsection (f) shall be given priority in selection of
    programs or projects for receipt of emission allowances under this
    subsection.
        (e) Use of Allowances.--
                (1) In general.--States and Indian tribes shall use
            allowances distributed under this section exclusively for the
            implementation of projects, programs, or measures to build
            resilience to the impacts of climate change, including--
                        (A) extreme weather events such as flooding and
                    tropical cyclones;
                        (B) more frequent heavy precipitation events;
                        (C) water scarcity and adverse impacts on water
                    quality;
                        (D) stronger and longer heat waves;
                        (E) more frequent and severe droughts;
                        (F) rises in sea level;
                        (G) ecosystem disruption;
                        (H) increased air pollution; and
                        (I) effects on public health.
                (2) Priority in projects to reduce flood events.--When
            implementing any project, program, or measure supported under
            this section and designed to reduce flood events, a State or
            Indian tribe should consider prioritizing projects that seek
            to--
                        (A) mitigate the destructive impacts of climate-
                    related increases in the duration, frequency, or
                    magnitude of rainfall or runoff, including snowmelt
                    runoff, as well as hurricanes;
                        (B) improve flood protection for densely populated
                    urban areas; and
                        (C) mitigate the destructive impact of ocean-
                    related climate change effects, including effects on
                    bays, estuaries, populated barrier islands and other
                    ocean-related features, through a variety of means and
                    measures, including the construction of jetties,
                    levies, and other coastal structures in densely
                    populated coastal areas impacted by climate change.
                (3) State and tribal adaptation plans.--Upon approval of a
            State or tribal climate adaptation plan under subsection (f),
            allowances received by a State under this section shall be used
            in accordance with such plan.
                (4) Supplement, not supplant.--It is the intent of the
            Congress that allowances distributed to carry out this section
            should be used to supplement, and not replace, existing sources
            of funding used to build resilience to the impacts of climate
            change identified in paragraph (1).
                (5) Research on hurricanes.--The authorized uses of
            allowances under this section shall include establishment of
            projects or programs to conduct research and monitoring on the
            effect of ongoing climate change on the frequency and intensity
            of hurricanes.
        (f) State and Tribal Climate Adaptation Plans.--
                (1) In general.--The regulations promulgated pursuant to
            subsection (b) shall include requirements for submission and
            approval of State or tribal climate adaptation plans under this
            section. Beginning with vintage year 2015, distribution of
            allowances to a State pursuant to this section shall be
            contingent on approval of a State climate adaptation plan for
            such State that meets the requirements of such regulations.
            Requirements for tribal climate adaptation plans may vary from
            those of State adaptation plans to the extent necessary to
            account for the special circumstances of Indian tribes.
                (2) Requirements.--Regulations promulgated under this
            section shall require, at minimum, that State and tribal
            climate adaptation plans--
                        (A) assess and prioritize the State's or Indian
                    tribe's vulnerability to a broad range of impacts of
                    climate change, based on the best available science;
                        (B) include an assessment of potential for carbon
                    reduction through changes to land management policies
                    (including enhancement or protection of forest carbon
                    sinks);
                        (C) identify and prioritize specific cost-effective
                    projects, programs, and measures to build resilience to
                    current and predicted impacts of climate change;
                        (D) ensure that the State or Indian tribe fully
                    considers and undertakes, to the maximum extent
                    practicable, initiatives that--
                                (i) protect or enhance natural ecosystem
                            functions, including protection, maintenance,
                            or restoration of natural infrastructure such
                            as wetlands, reefs, and barrier islands to
                            buffer communities from floodwaters or storms,
                            watershed protection to maintain water quality
                            and groundwater recharge, or floodplain
                            restoration to improve natural flood control
                            capacity; or
                                (ii) use non-structural approaches
                            including practices that utilize, enhance, or
                            mimic the natural hydrologic cycle processes of
                            infiltration, evapotranspiration, and reuse;
                        (E) be revised and resubmitted for approval not
                    less frequently than every 5 years; and
                        (F) be consistent with Federal conservation and
                    environmental laws and, to the maximum extent
                    practicable, avoid environmental degradation.
                (3) Coordination with prior planning efforts.--In
            implementing this subsection, the Administrator, or such
            Federal agency head or heads as the President may designate,
            shall--
                        (A) draw upon lessons learned and best practices
                    from preexisting State and tribal climate adaptation
                    planning efforts;
                        (B) seek to avoid duplication of such efforts; and
                        (C) ensure that the plans developed under this
                    section reflect and are fully consistent with State
                    natural resources adaptation plans developed under
                    section 479 of this Act.
        (g) Reporting.--Each State or Indian tribe receiving allowances
    under this section shall submit to the Administrator, or such Federal
    agency head or heads as the President may designate, within 12 months
    after each receipt of such allowances and once every 2 years thereafter
    until the value of any allowances received under this section has been
    fully expended, a report that--
                (1) provides a full accounting for the State's or Indian
            tribe's use of allowances distributed under this section,
            including a description of the projects, programs, or measures
            supported using such allowances;
                (2) includes a report prepared by an independent third
            party, in accordance with such regulations as are promulgated
            by the Administrator or such other Federal agency head or heads
            as the President may designate, evaluating the performance of
            the projects, programs, or measures supported under this
            section; and
                (3) identifies any use by the State or Indian tribe of
            allowances distributed under this section for the reduction of
            flood and storm damage and the effects of climate change on
            water and flood protection infrastructure.
        (h) Enforcement.--If the Administrator, or such Federal agency head
    or heads as the President may designate, determines that a State or
    Indian tribe is not in compliance with this section, the Administrator
    or such other agency head may withhold a quantity of the allowances
    equal to up to twice the quantity of allowances that the State or
    Indian tribe failed to use in accordance with the requirements of this
    section, that such State or Indian tribe would otherwise be eligible to
    receive under this section in 1 or more later years. Allowances
    withheld pursuant to this subsection shall be distributed among the
    remaining States or Indian tribes ratably in accordance with the
    formula in subsection (c) in the case of allowances withheld from a
    State, or in accordance with subsection (d) in the case of allowances
    withheld from an Indian tribe.

                  Subpart B--Public Health and Climate Change

    SEC. 461. SENSE OF CONGRESS ON PUBLIC HEALTH AND CLIMATE CHANGE.

        It is the sense of the Congress that the Federal Government, in
    cooperation with international, State, tribal, and local governments,
    concerned public and private organizations, and citizens, should use
    all practicable means and measures--
                (1) to assist the efforts of public health and health care
            professionals, first responders, States, tribes,
            municipalities, and local communities to incorporate measures
            to prepare health systems to respond to the impacts of climate
            change;
                (2) to ensure--
                        (A) that the Nation's health professionals have
                    sufficient information to prepare for and respond to
                    the adverse health impacts of climate change;
                        (B) the utility and value of scientific research in
                    advancing understanding of--
                                (i) the health impacts of climate change;
                            and
                                (ii) strategies to prepare for and respond
                            to the health impacts of climate change;
                        (C) the identification of communities vulnerable to
                    the health effects of climate change and the
                    development of strategic response plans to be carried
                    out by health professionals for those communities;
                        (D) the improvement of health status and health
                    equity through efforts to prepare for and respond to
                    climate change; and
                        (E) the inclusion of health policy in the
                    development of climate change responses;
                (3) to encourage further research, interdisciplinary
            partnership, and collaboration among stakeholders in order to--
                        (A) understand and monitor the health impacts of
                    climate change; and
                        (B) improve public health knowledge and response
                    strategies to climate change;
                (4) to enhance preparedness activities, and public health
            infrastructure, relating to climate change and health;
                (5) to encourage each and every American to learn about the
            impacts of climate change on health; and
                (6) to assist the efforts of developing nations to
            incorporate measures to prepare health systems to respond to
            the impacts of climate change.

    SEC. 462. RELATIONSHIP TO OTHER LAWS.

        Nothing in this subpart in any manner limits the authority provided
    to or responsibility conferred on any Federal department or agency by
    any provision of any law (including regulations) or authorizes any
    violation of any provision of any law (including regulations),
    including any health, energy, environmental, transportation, or any
    other law or regulation.

    SEC. 463. NATIONAL STRATEGIC ACTION PLAN.

        (a) Requirement.--
                (1) In general.--The Secretary of Health and Human
            Services, within 2 years after the date of the enactment of
            this Act, on the basis of the best available science, and in
            consultation pursuant to paragraph (2), shall publish a
            strategic action plan to assist health professionals in
            preparing for and responding to the impacts of climate change
            on public health in the United States and other nations,
            particularly developing nations.
                (2) Consultation.--In developing or making any revision to
            the national strategic action plan, the Secretary shall--
                        (A) consult with the Director of the Centers for
                    Disease Control and Prevention, the Administrator of
                    the Environmental Protection Agency, the Director of
                    the National Institutes of Health, the Secretary of
                    Energy, other appropriate Federal agencies, Indian
                    tribes, State and local governments, public health
                    organizations, scientists, and other interested
                    stakeholders; and
                        (B) provide opportunity for public input.
        (b) Contents.--
                (1) In general.--The Secretary, acting through the Director
            of the Centers for Disease Control and Prevention and other
            appropriate Federal agencies, shall assist health professionals
            in preparing for and responding effectively and efficiently to
            the health effects of climate change through measures
            including--
                        (A) developing, improving, integrating, and
                    maintaining domestic and international disease
                    surveillance systems and monitoring capacity to respond
                    to health-related effects of climate change, including
                    on topics addressing--
                                (i) water, food, and vector borne
                            infectious diseases and climate change;
                                (ii) pulmonary effects, including responses
                            to aeroallergens;
                                (iii) cardiovascular effects, including
                            impacts of temperature extremes;
                                (iv) air pollution health effects,
                            including heightened sensitivity to air
                            pollution;
                                (v) hazardous algal blooms;
                                (vi) mental and behavioral health impacts
                            of climate change;
                                (vii) the health of refugees, displaced
                            persons, and vulnerable communities;
                                (viii) the implications for communities
                            vulnerable to health effects of climate change,
                            as well as strategies for responding to climate
                            change within these communities; and
                                (ix) local and community-based health
                            interventions for climate-related health
                            impacts;
                        (B) creating tools for predicting and monitoring
                    the public health effects of climate change on the
                    international, national, regional, State, and local
                    levels, and providing technical support to assist in
                    their implementation;
                        (C) developing public health communications
                    strategies and interventions for extreme weather events
                    and disaster response situations;
                        (D) identifying and prioritizing communities and
                    populations vulnerable to the health effects of climate
                    change, and determining actions and communication
                    strategies that should be taken to inform and protect
                    these communities and populations from the health
                    effects of climate change;
                        (E) developing health communication, public
                    education, and outreach programs aimed at public health
                    and health care professionals, as well as the general
                    public, to promote preparedness and response strategies
                    relating to climate change and public health, including
                    the identification of greenhouse gas reduction
                    behaviors that are health-promoting; and
                        (F) developing academic and regional centers of
                    excellence devoted to--
                                (i) researching relationships between
                            climate change and health;
                                (ii) expanding and training the public
                            health workforce to strengthen the capacity of
                            such workforce to respond to and prepare for
                            the health effects of climate change;
                                (iii) creating and supporting academic
                            fellowships focusing on the health effects of
                            climate change; and
                                (iv) training senior health ministry
                            officials from developing nations to strengthen
                            the capacity of such nations to--
                                        (I) prepare for and respond to the
                                    health effects of climate change; and
                                        (II) build an international network
                                    of public health professionals with the
                                    necessary climate change knowledge
                                    base;
                        (G) using techniques, including health impact
                    assessments, to assess various climate change public
                    health preparedness and response strategies on
                    international, national, State, regional, tribal, and
                    local levels, and make recommendations as to those
                    strategies that best protect the public health;
                        (H)(i) assisting in the development,
                    implementation, and support of State, regional, tribal,
                    and local preparedness, communication, and response
                    plans (including with respect to the health departments
                    of such entities) to anticipate and reduce the health
                    threats of climate change; and
                        (ii) pursuing collaborative efforts to develop,
                    integrate, and implement such plans;
                        (I) creating a program to advance research as it
                    relates to the effects of climate change on public
                    health across Federal agencies, including research to--
                                (i) identify and assess climate change
                            health effects preparedness and response
                            strategies;
                                (ii) prioritize critical public health
                            infrastructure projects related to potential
                            climate change impacts that affect public
                            health; and
                                (iii) coordinate preparedness for climate
                            change health impacts, including the
                            development of modeling and forecasting tools;
                        (J) providing technical assistance for the
                    development, implementation, and support of
                    preparedness and response plans to anticipate and
                    reduce the health threats of climate change in
                    developing nations; and
                        (K) carrying out other activities determined
                    appropriate by the Secretary to plan for and respond to
                    the impacts of climate change on public health.
        (c) Revision.--The Secretary shall revise the national strategic
    action plan not later than July 1, 2014, and every 4 years thereafter,
    to reflect new information collected pursuant to implementation of the
    national strategic action plan and otherwise, including information
    on--
                (1) the status of critical environmental health parameters
            and related human health impacts;
                (2) the impacts of climate change on public health; and
                (3) advances in the development of strategies for preparing
            for and responding to the impacts of climate change on public
            health.
        (d) Implementation.--
                (1) Implementation through hhs.--The Secretary shall
            exercise the Secretary's authority under this subpart and other
            provisions of Federal law to achieve the goals and measures of
            the national strategic action plan.
                (2) Other public health programs and initiatives.--The
            Secretary and Federal officials of other relevant Federal
            agencies shall administer public health programs and
            initiatives authorized by provisions of law other than this
            subpart, subject to the requirements of such statutes, in a
            manner designed to achieve the goals of the national strategic
            action plan.
                (3) CDC.--In furtherance of the national strategic action
            plan, the Secretary, acting through the Director of the Centers
            for Disease Control and Prevention and the head of any other
            appropriate Federal agency, shall--
                        (A) conduct scientific research to assist health
                    professionals in preparing for and responding to the
                    impacts of climate change on public health; and
                        (B) provide funding for--
                                (i) research on the health effects of
                            climate change; and
                                (ii) preparedness planning on the
                            international, national, State, tribal,
                            regional, and local levels to respond to or
                            reduce the burden of health effects of climate
                            change; and
                        (C) carry out other activities determined
                    appropriate by the Director or the head of such agency
                    to prepare for and respond to the impacts of climate
                    change on public health.

    SEC. 464. ADVISORY BOARD.

        (a) Establishment.--The Secretary shall establish a permanent
    science advisory board comprised of not less than 10 and not more than
    20 members.
        (b) Appointment of Members.--The Secretary shall appoint the
    members of the science advisory board from among individuals--
                (1) who have expertise in public health and human services,
            climate change, and other relevant disciplines; and
                (2) at least \1/2\ of whom are recommended by the President
            of the National Academy of Sciences.
        (c) Functions.--The science advisory board shall--
                (1) provide scientific and technical advice and
            recommendations to the Secretary on the domestic and
            international impacts of climate change on public health,
            populations and regions particularly vulnerable to the effects
            of climate change, and strategies and mechanisms to prepare for
            and respond to the impacts of climate change on public health;
            and
                (2) advise the Secretary regarding the best science
            available for purposes of issuing the national strategic action
            plan.

    SEC. 465. REPORTS.

        (a) Needs Assessment.--
                (1) In general.--The Secretary shall seek to enter into, by
            not later than 6 months after the date of the enactment of this
            Act, an agreement with the National Research Council and the
            Institute of Medicine to complete a report that--
                        (A) assesses the needs for health professionals to
                    prepare for and respond to climate change impacts on
                    public health; and
                        (B) recommends programs to meet those needs.
                (2) Submission.--The agreement under paragraph (1) shall
            require the completed report to be submitted to the Congress
            and the Secretary and made publicly available not later than 1
            year after the date of the agreement.
        (b) Climate Change Health Protection and Promotion Reports.--
                (1) In general.--The Secretary, in consultation with the
            advisory board established under section 464, shall ensure the
            issuance of reports to aid health professionals in preparing
            for and responding to the adverse health effects of climate
            change that--
                        (A) review scientific developments on health
                    impacts of climate change; and
                        (B) recommend changes to the national strategic
                    action plan.
                (2) Submission.--The Secretary shall submit the reports
            required by paragraph (1) to the Congress and make such reports
            publicly available not later than July 1, 2013, and every 4
            years thereafter.

    SEC. 466. DEFINITIONS.

        In this subpart:
                (1) Health impact assessment.--The term ``health impact
            assessment'' means a combination of procedures, methods, and
            tools by which a policy, program, or project may be judged as
            to its potential effects on the health of a population, and the
            distribution of those effects within the population.
                (2) National strategic action plan.--The term ``national
            strategic action plan'' means the plan issued and revised under
            section 463.
                (3) Secretary.--Unless otherwise specified, the term
            ``Secretary'' means the Secretary of Health and Human Services.

    SEC. 467. CLIMATE CHANGE HEALTH PROTECTION AND PROMOTION FUND.

        (a) Establishment of Fund.--Subject to subtitle F of title IV,
    there is hereby established in the Treasury a separate account that
    shall be known as the Climate Change Health Protection and Promotion
    Fund.
        (b) Availability of Amounts.--Subject to subtitle F of title IV,
    all amounts deposited into the Climate Change Health Protection and
    Promotion Fund shall be available to the Secretary to carry out this
    subpart subject to further appropriation.
        (c) Distribution of Funds by HHS.--In carrying out this subpart,
    the Secretary may make funds deposited in the Climate Change Health
    Protection and Promotion Fund available to--
                (1) other departments, agencies, and offices of the Federal
            Government;
                (2) foreign, State, tribal, and local governments; and
                (3) such other entities as the Secretary determines
            appropriate.
        (d) Supplement, Not Replace.--It is the intent of Congress that
    funds made available to carry out this subpart should be used to
    supplement, and not replace, existing sources of funding for public
    health.

                     Subpart C--Natural Resource Adaptation

    SEC. 471. PURPOSES.

        The purposes of this subpart are to--
                (1) establish an integrated Federal program to protect,
            restore, and conserve the Nation's natural resources in
            response to the threats of climate change and ocean
            acidification; and
                (2) provide financial support and incentives for programs,
            strategies, and activities that protect, restore, and conserve
            the Nation's natural resources in response to the threats of
            climate change and ocean acidification.

    SEC. 472. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION POLICY.

        It is the policy of the Federal Government, in cooperation with
    State and local governments, Indian tribes, and other interested
    stakeholders to use all practicable means and measures to protect,
    restore, and conserve natural resources to enable them to become more
    resilient, adapt to, and withstand the impacts of climate change and
    ocean acidification.

    SEC. 473. DEFINITIONS.

        In this subpart:
                (1) Coastal state.--The term ``coastal State'' has the
            meaning given the term in section 304 of the Coastal Zone
            Management Act of 1972 (16 U.S.C. 1453).
                (2) Corridors.--The term ``corridors'' means areas that
            provide connectivity, over different time scales (including
            seasonal or longer), of habitat or potential habitat and that
            facilitate the ability of terrestrial, marine, estuarine, and
            freshwater fish, wildlife, or plants to move within a landscape
            as needed for migration, gene flow, or dispersal, or in
            response to the impacts of climate change and ocean
            acidification or other impacts.
                (3) Ecological processes.--The term ``ecological
            processes'' means biological, chemical, or physical interaction
            between the biotic and abiotic components of an ecosystem and
            includes--
                        (A) nutrient cycling;
                        (B) pollination;
                        (C) predator-prey relationships;
                        (D) soil formation;
                        (E) gene flow;
                        (F) disease epizootiology;
                        (G) larval dispersal and settlement;
                        (H) hydrological cycling;
                        (I) decomposition; and
                        (J) disturbance regimes such as fire and flooding.
                (4) Habitat.--The term ``habitat'' means the physical,
            chemical, and biological properties that are used by fish,
            wildlife, or plants for growth, reproduction, survival, food,
            water, and cover, on a tract of land, in a body of water, or in
            an area or region.
                (5) 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).
                (6) Natural resources.--The term ``natural resources''
            means the terrestrial, freshwater, estuarine, and marine fish,
            wildlife, plants, land, water, habitats, and ecosystems of the
            United States.
                (7) Natural resources adaptation.--The term ``natural
            resources adaptation'' means the protection, restoration, and
            conservation of natural resources to enable them to become more
            resilient, adapt to, and withstand the impacts of climate
            change and ocean acidification.
                (8) Resilience.--Each of the terms ``resilience'' and
            ``resilient'' means the ability to resist or recover from
            disturbance and preserve diversity, productivity, and
            sustainability.
                (9) State.--The term ``State'' means--
                        (A) a State of the United States;
                        (B) the District of Columbia; and
                        (C) the Commonwealth of Puerto Rico, Guam, the
                    United States Virgin Islands, the Northern Mariana
                    Islands, and American Samoa.

    SEC. 474. COUNCIL ON ENVIRONMENTAL QUALITY.

        The Chair of the Council on Environmental Quality shall--
                (1) advise the President on implementation and development
            of--
                        (A) a Natural Resources Climate Change Adaptation
                    Strategy required under section 476; and
                        (B) Federal natural resource agency adaptation
                    plans required under section 478;
                (2) serve as the Chair of the Natural Resources Climate
            Change Adaptation Panel established under section 475; and
                (3) coordinate Federal agency strategies, plans, programs,
            and activities related to protecting, restoring, and
            maintaining natural resources to become more resilient, adapt
            to, and withstand the impacts of climate change and ocean
            acidification.

    SEC. 475. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION PANEL.

        (a) Establishment.--Not later than 90 days after the date of the
    enactment of this subpart, the President shall establish a Natural
    Resources Climate Change Adaptation Panel, consisting of--
                (1) the head, or their designee, of each of--
                        (A) the National Oceanic and Atmospheric
                    Administration;
                        (B) the Forest Service;
                        (C) the National Park Service;
                        (D) the United States Fish and Wildlife Service;
                        (E) the Bureau of Land Management;
                        (F) the United States Geological Survey;
                        (G) the Bureau of Reclamation;
                        (H) the Bureau of Indian Affairs;
                        (I) the Environmental Protection Agency; and
                        (J) the Army Corps of Engineers;
                (2) the Chair of the Council on Environmental Quality; and
                (3) the heads of such other Federal agencies or departments
            with jurisdiction over natural resources of the United States,
            as determined by the President.
        (b) Functions.--The Panel shall serve as a forum for interagency
    consultation on and the coordination of the development and
    implementation of a national Natural Resources Climate Change
    Adaptation Strategy required under section 476.
        (c) Chair.--The Chair of the Council on Environmental Quality shall
    serve as the Chair of the Panel.

    SEC. 476. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION STRATEGY.

        (a) In General.--Not later than 1 year after the date of the
    enactment of this subpart, the President, through the Natural Resources
    Climate Change Adaptation Panel established under section 475, shall
    develop a Natural Resources Climate Change Adaptation Strategy to
    protect, restore, and conserve natural resources to enable them to
    become more resilient, adapt to, and withstand the impacts of climate
    change and ocean acidification and to identify opportunities to
    mitigate those impacts.
        (b) Development and Revision.--In developing and revising the
    Strategy, the Panel shall--
                (1) base the strategy on the best available science;
                (2) develop the strategy in close cooperation with States
            and Indian tribes;
                (3) coordinate with other Federal agencies as appropriate;
                (4) consult with local governments, conservation
            organizations, scientists, and other interested stakeholders;
                (5) provide public notice and opportunity for comment; and
                (6) review and revise the Strategy every 5 years to
            incorporate new information regarding the impacts of climate
            change and ocean acidification on natural resources and
            advances in the development of strategies for becoming more
            resilient and adapting to those impacts.
        (c) Contents.--The National Resources Adaptation Strategy shall
    include--
                (1) an assessment of the vulnerability of natural resources
            to climate change and ocean acidification, including the short-
            term, medium-term, long-term, cumulative, and synergistic
            impacts;
                (2) a description of current research, observation, and
            monitoring activities at the Federal, State, tribal, and local
            level related to the impacts of climate change and ocean
            acidification on natural resources, as well as identification
            of research and data needs and priorities;
                (3) identification of natural resources that are likely to
            have the greatest need for protection, restoration, and
            conservation because of the adverse effects of climate change
            and ocean acidification;
                (4) specific protocols for integrating climate change and
            ocean acidification adaptation strategies and activities into
            the conservation and management of natural resources by Federal
            departments and agencies to ensure consistency across agency
            jurisdictions and resources;
                (5) specific actions that Federal departments and agencies
            shall take to protect, conserve, and restore natural resources
            to become more resilient, adapt to, and withstand the impacts
            of climate change and ocean acidification, including a timeline
            to implement those actions;
                (6) specific mechanisms for ensuring communication and
            coordination among Federal departments and agencies, and
            between Federal departments and agencies and State natural
            resource agencies, United States territories, Indian tribes,
            private landowners, conservation organizations, and other
            nations that share jurisdiction over natural resources with the
            United States;
                (7) specific actions to develop and implement consistent
            natural resources inventory and monitoring protocols through
            interagency coordination and collaboration; and
                (8) a process for guiding the development of detailed
            agency- and department-specific adaptation plans required under
            section 478 to address the impacts of climate change and ocean
            acidification on the natural resources in the jurisdiction of
            each agency.
        (d) Implementation.--Consistent with its authorities under other
    laws and with Federal trust responsibilities with respect to Indian
    lands, each Federal department or agency with representation on the
    National Resources Climate Change Adaptation Panel shall consider the
    impacts of climate change and ocean acidification and integrate the
    elements of the strategy into agency plans, environmental reviews,
    programs, and activities related to the conservation, restoration, and
    management of natural resources.

    SEC. 477. NATURAL RESOURCES ADAPTATION SCIENCE AND INFORMATION.

        (a) Coordination.--Not later than 90 days after the date of the
    enactment of this subpart, the Secretary of Commerce, acting through
    the Administrator of the National Oceanic and Atmospheric
    Administration, and the Secretary of the Interior, acting through the
    Director of the United States Geological Survey, shall establish a
    coordinated process for developing and providing science and
    information needed to assess and address the impacts of climate change
    and ocean acidification on natural resources. The process shall be led
    by the National Climate Change and Wildlife Science Center established
    within the United States Geological Survey under subsection (d) and the
    National Climate Service of the National Oceanic and Atmospheric
    Administration.
        (b) Functions.--The Secretaries shall ensure that such process
    avoids duplication and that the National Oceanic and Atmospheric
    Administration and the United States Geological Survey shall--
                (1) provide technical assistance to Federal departments and
            agencies, State and local governments, Indian tribes, and
            interested private landowners in their efforts to assess and
            address the impacts of climate change and ocean acidification
            on natural resources;
                (2) conduct and sponsor research and provide Federal
            departments and agencies, State and local governments, Indian
            tribes, and interested private landowners with research
            products, decision and monitoring tools and information, to
            develop strategies for assisting natural resources to become
            more resilient, adapt to, and withstand the impacts of climate
            change and ocean acidification; and
                (3) assist Federal departments and agencies in the
            development of the adaptation plans required under section 478.
        (c) Survey.--Not later than 1 year after the date of enactment of
    this subpart and every 5 years thereafter, the Secretary of Commerce
    and the Secretary of the Interior shall undertake a climate change and
    ocean acidification impact survey that--
                (1) identifies natural resources considered likely to be
            adversely affected by climate change and ocean acidification;
                (2) includes baseline monitoring and ongoing trend
            analysis;
                (3) uses a stakeholder process to identify and prioritize
            needed monitoring and research that is of greatest relevance to
            the ongoing needs of natural resource managers to address the
            impacts of climate change and ocean acidification; and
                (4) identifies decision tools necessary to develop
            strategies for assisting natural resources to become more
            resilient and adapt to and withstand the impacts of climate
            change and ocean acidification.
        (d) National Climate Change and Wildlife Science Center.--
                (1) Establishment.--The Secretary of the Interior shall
            establish the National Climate Change and Wildlife Science
            Center within the United States Geological Survey.
                (2) Functions.--The Center shall, in collaboration with
            Federal and State natural resources agencies and departments,
            Indian tribes, universities, and other partner organizations--
                        (A) assess and synthesize current physical and
                    biological knowledge and prioritize scientific gaps in
                    such knowledge in order to forecast the ecological
                    impacts of climate change on fish and wildlife at the
                    ecosystem, habitat, community, population, and species
                    levels;
                        (B) develop and improve tools to identify,
                    evaluate, and, where appropriate, link scientific
                    approaches and models for forecasting the impacts of
                    climate change and adaptation on fish, wildlife,
                    plants, and their habitats, including monitoring,
                    predictive models, vulnerability analyses, risk
                    assessments, and decision support systems to help
                    managers make informed decisions;
                        (C) develop and evaluate tools to adaptively manage
                    and monitor the effects of climate change on fish and
                    wildlife at national, regional, and local scales; and
                        (D) develop capacities for sharing standardized
                    data and the synthesis of such data.
        (e) Science Advisory Board.--
                (1) Establishment.--Not later than 180 days after the date
            of enactment of this subpart, the Secretary of Commerce and the
            Secretary of the Interior shall establish and appoint the
            members of a Science Advisory Board, to be comprised of not
            fewer than 10 and not more than 20 members--
                        (A) who have expertise in fish, wildlife, plant,
                    aquatic, and coastal and marine biology, ecology,
                    climate change, ocean acidification, and other relevant
                    scientific disciplines;
                        (B) who represent a balanced membership among
                    Federal, State, Indian tribes, and local
                    representatives, universities, and conservation
                    organizations; and
                        (C) at least \1/2\ of whom are recommended by the
                    President of the National Academy of Sciences.
                (2) Duties.--The Science Advisory Board shall--
                        (A) advise the Secretaries on the state-of-the-
                    science regarding the impacts of climate change and
                    ocean acidification on natural resources and scientific
                    strategies and mechanisms for protecting, restoring,
                    and conserving natural resources to enable them to
                    become more resilient, adapt to, and withstand the
                    impacts of climate change and ocean acidification; and
                        (B) identify and recommend priorities for ongoing
                    research needs on such issues.
                (3) Collaboration.--The Science Advisory Board shall
            collaborate with other climate change and ecosystem research
            entities in other Federal agencies and departments.
                (4) Availability to the public.--The advice and
            recommendations of the Science Advisory Board shall be made
            available to the public.

    SEC. 478. FEDERAL NATURAL RESOURCE AGENCY ADAPTATION PLANS.

        (a) Development.--Not later than 1 year after the date of the
    development of a Natural Resources Climate Change Adaptation Strategy
    under section 476, each department or agency that has a representative
    on the Natural Resources Climate Change Adaptation Panel established
    under section 475 shall--
                (1) complete an adaptation plan for that department or
            agency, respectively, implementing the Natural Resources
            Climate Change Adaptation Strategy under section 476 and
            consistent with the Natural Resources Climate Change Adaptation
            Policy under section 472, detailing the department's or
            agency's current and projected efforts to address the potential
            impacts of climate change and ocean acidification on natural
            resources within the department's or agency's jurisdiction and
            necessary additional actions, including a timeline for
            implementation of those actions;
                (2) provide opportunities for review and comment on that
            adaptation plan by the public, including in the case of a plan
            by the Bureau of Indian Affairs, review by Indian tribes; and
                (3) submit such plan to the President for approval.
        (b) Review by President and Submission to Congress.--
                (1) Review by president.--The President shall--
                        (A) approve an adaptation plan submitted under
                    subsection (a)(3) if the plan meets the requirements of
                    subsection (c) and is consistent with the strategy
                    developed under section 476;
                        (B) decide whether to approve the plan within 60
                    days after submission; and
                        (C) if the President disapproves a plan, direct the
                    department or agency to submit a revised plan to the
                    President under subsection (a)(3) within 60 days after
                    such disapproval.
                (2) Submission to congress.--Not later than 30 days after
            the date of approval of such adaptation plan by the President,
            the department or agency shall submit the approved plan to the
            Committee on Natural Resources of the House of Representatives,
            the Committee on Energy and Natural Resources of the Senate,
            and the committees of the House of Representatives and the
            Senate with principal jurisdiction over the department or
            agency.
        (c) Requirements.--Each adaptation plan shall--
                (1) establish programs for assessing the current and future
            impacts of climate change and ocean acidification on natural
            resources within the department's or agency's, respectively,
            jurisdiction, including cumulative and synergistic effects, and
            for identifying and monitoring those natural resources that are
            likely to be adversely affected and that have need for
            conservation;
                (2) identify and prioritize the department's or agency's
            strategies and specific conservation actions to address the
            current and future impacts of climate change and ocean
            acidification on natural resources within the scope of the
            department's or agency's jurisdiction and to develop and
            implement strategies to protect, restore, and conserve such
            resources to become more resilient, adapt to, and better
            withstand those impacts, including--
                        (A) the protection, restoration, and conservation
                    of terrestrial, marine, estuarine, and freshwater
                    habitats and ecosystems;
                        (B) the establishment of terrestrial, marine,
                    estuarine, and freshwater habitat linkages and
                    corridors;
                        (C) the restoration and conservation of ecological
                    processes;
                        (D) the protection of a broad diversity of native
                    species of fish, wildlife, and plant populations across
                    their range; and
                        (E) the protection of fish, wildlife, and plant
                    health, recognizing that climate can alter the
                    distribution and ecology of parasites, pathogens, and
                    vectors;
                (3) describe how the department or agency will integrate
            such strategies and conservation activities into plans,
            programs, activities, and actions of the department or agency,
            related to the conservation and management of natural resources
            and establish new plans, programs, activities, and actions as
            necessary;
                (4) establish methods for assessing the effectiveness of
            strategies and conservation actions taken to protect, restore,
            and conserve natural resources to enable them to become more
            resilient, adapt to, and withstand the impacts of climate
            change and ocean acidification, and for updating those
            strategies and actions to respond to new information and
            changing conditions;
                (5) include a description of current and proposed
            mechanisms to enhance cooperation and coordination of natural
            resources adaptation efforts with other Federal agencies, State
            and local governments, Indian tribes, and nongovernmental
            stakeholders;
                (6) include specific written guidance to resource managers
            to--
                        (A) explain how managers are expected to address
                    the effects of climate change and ocean acidification;
                        (B) identify how managers are to obtain any site-
                    specific information that may be necessary; and
                        (C) reflect best practices shared among relevant
                    agencies, while also recognizing the unique missions,
                    objectives, and responsibilities of each agency; and
                (7) identify and assess data and information gaps necessary
            to develop natural resources adaptation plans and strategies.
        (d) Implementation.--
                (1) In general.--Upon approval by the President, each
            department or agency that serves on the Natural Resources
            Climate Change Adaptation Panel shall implement its adaptation
            plan through existing and new plans, policies, programs,
            activities, and actions to the extent not inconsistent with
            existing authority.
                (2) Consideration of impacts.--
                        (A) In general.--To the maximum extent practicable
                    and consistent with applicable law, every natural
                    resource management decision made by the department or
                    agency shall consider the impacts of climate change and
                    ocean acidification on those natural resources.
                        (B) Guidance.--The Council on Environmental Quality
                    shall issue guidance for Federal departments and
                    agencies for considering those impacts.
        (e) Revision and Review.--Not less than every 5 years, each
    adaptation plan under this section shall be reviewed and revised to
    incorporate the best available science and other information regarding
    the impacts of climate change and ocean acidification on natural
    resources.

    SEC. 479. STATE NATURAL RESOURCES ADAPTATION PLANS.

        (a) Requirement.--In order to be eligible for funds under section
    480, not later than 1 year after the development of a Natural Resources
    Climate Change Adaptation Strategy required under section 476 each
    State shall prepare a State natural resources adaptation plan detailing
    the State's current and projected efforts to address the potential
    impacts of climate change and ocean acidification on natural resources
    and coastal areas within the State's jurisdiction.
        (b) Review or Approval.--
                (1) In general.--Each State adaptation plan shall be
            reviewed and approved or disapproved by the Secretary of the
            Interior and, as applicable, the Secretary of Commerce. Such
            approval shall be granted if the plan meets the requirements of
            subsection (c) and is consistent with the Natural Resources
            Climate Change Adaptation Strategy required under section 476.
                (2) Approval or disapproval.--Within 180 days after
            transmittal of such a plan, or a revision to such a plan, the
            Secretary of the Interior and, as applicable, the Secretary of
            Commerce shall approve or disapprove the plan by written
            notice.
                (3) Resubmittal.--Within 90 days after transmittal of a
            resubmitted adaptation plan as a result of disapproval under
            paragraph (3), the Secretary of the Interior and, as
            applicable, the Secretary of Commerce, shall approve or
            disapprove the plan by written notice.
        (c) Contents.--A State natural resources adaptation plan shall--
                (1) include a strategy for addressing the impacts of
            climate change and ocean acidification on terrestrial, marine,
            estuarine, and freshwater fish, wildlife, plants, habitats,
            ecosystems, wildlife health, and ecological processes, that--
                        (A) describes the impacts of climate change and
                    ocean acidification on the diversity and health of the
                    fish, wildlife and plant populations, habitats,
                    ecosystems, and associated ecological processes;
                        (B) establishes programs for monitoring the impacts
                    of climate change and ocean acidification on fish,
                    wildlife, and plant populations, habitats, ecosystems,
                    and associated ecological processes;
                        (C) describes and prioritizes proposed conservation
                    actions to assist fish, wildlife, plant populations,
                    habitats, ecosystems, and associated ecological
                    processes in becoming more resilient, adapting to, and
                    better withstanding those impacts;
                        (D) includes strategies, specific conservation
                    actions, and a time frame for implementing conservation
                    actions for fish, wildlife, and plant populations,
                    habitats, ecosystems, and associated ecological
                    processes;
                        (E) establishes methods for assessing the
                    effectiveness of strategies and conservation actions
                    taken to assist fish, wildlife, and plant populations,
                    habitats, ecosystems, and associated ecological
                    processes in becoming more resilient, adapt to, and
                    better withstand the impacts of climate changes and
                    ocean acidification and for updating those strategies
                    and actions to respond appropriately to new information
                    or changing conditions;
                        (F) is incorporated into a revision of the State
                    wildlife action plan (also known as the State
                    comprehensive wildlife strategy)--
                                (i) that has been submitted to the United
                            States Fish and Wildlife Service; and
                                (ii) that has been approved by the Service
                            or on which a decision on approval is pending;
                            and
                        (G) is developed--
                                (i) with the participation of the State
                            fish and wildlife agency, the State coastal
                            agency, the State agency responsible for
                            administration of Land and Water Conservation
                            Fund grants, the State Forest Legacy program
                            coordinator, and other State agencies
                            considered appropriate by the Governor of such
                            State; and
                                (ii) in coordination with the Secretary of
                            the Interior, and where applicable, the
                            Secretary of Commerce and other States that
                            share jurisdiction over natural resources with
                            the State; and
                (2) include, in the case of a coastal State, a strategy for
            addressing the impacts of climate change and ocean
            acidification on the coastal zone that--
                        (A) identifies natural resources that are likely to
                    be impacted by climate change and ocean acidification
                    and describes those impacts;
                        (B) identifies and prioritizes continuing research
                    and data collection needed to address those impacts
                    including--
                                (i) acquisition of high resolution coastal
                            elevation and nearshore bathymetry data;
                                (ii) historic shoreline position maps,
                            erosion rates, and inventories of shoreline
                            features and structures;
                                (iii) measures and models of relative rates
                            of sea level rise or lake level changes,
                            including effects on flooding, storm surge,
                            inundation, and coastal geological processes;
                                (iv) habitat loss, including projected
                            losses of coastal wetlands and potentials for
                            inland migration of natural shoreline habitats;
                                (v) ocean and coastal species and ecosystem
                            migrations, and changes in species population
                            dynamics;
                                (vi) changes in storm frequency, intensity,
                            or rainfall patterns;
                                (vii) saltwater intrusion into coastal
                            rivers and aquifers;
                                (viii) changes in chemical or physical
                            characteristics of marine and estuarine
                            systems;
                                (ix) increased harmful algal blooms; and
                                (x) spread of invasive species;
                        (C) identifies and prioritizes adaptation
                    strategies to protect, restore, and conserve natural
                    resources to enable them to become more resilient,
                    adapt to, and withstand the impacts of climate change
                    and ocean acidification, including--
                                (i) protection, maintenance, and
                            restoration of ecologically important coastal
                            lands, coastal and ocean ecosystems, and
                            species biodiversity and the establishment of
                            habitat buffer zones, migration corridors, and
                            climate refugia; and
                                (ii) improved planning, siting policies,
                            and hazard mitigation strategies;
                        (D) establishes programs for the long-term
                    monitoring of the impacts of climate change and ocean
                    acidification on the ocean and coastal zone and to
                    assess and adjust, when necessary, such adaptive
                    management strategies;
                        (E) establishes performance measures for assessing
                    the effectiveness of adaptation strategies intended to
                    improve resilience and the ability of natural resources
                    in the coastal zone to adapt to and withstand the
                    impacts of climate change and ocean acidification and
                    of adaptation strategies intended to minimize those
                    impacts on the coastal zone and to update those
                    strategies to respond to new information or changing
                    conditions; and
                        (F) is developed with the participation of the
                    State coastal agency and other appropriate State
                    agencies and in coordination with the Secretary of
                    Commerce and other appropriate Federal agencies.
        (d) Public Input.--States shall provide for solicitation and
    consideration of public and independent scientific input in the
    development of their plans.
        (e) Coordination With Other Plans.--The State plan shall take into
    consideration research and information contained in, and coordinate
    with and integrate the goals and measures identified in, as
    appropriate, other natural resources conservation strategies,
    including--
                (1) the national fish habitat action plan;
                (2) plans under the North American Wetlands Conservation
            Act (16 U.S.C. 4401 et seq.);
                (3) the Federal, State, and local partnership known as
            ``Partners in Flight'';
                (4) federally approved coastal zone management plans under
            the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et
            seq.);
                (5) federally approved regional fishery management plants
            and habitat conservation activities under the Magnuson-Stevens
            Fishery Conservation and Management Act (16 U.S.C. 1801 et
            seq.);
                (6) the national coral reef action plan;
                (7) recovery plans for threatened species and endangered
            species under section 4(f) of the Endangered Species Act of
            1973 (16 U.S.C. 1533(f));
                (8) habitat conservation plans under section 10 of that Act
            (16 U.S.C. 1539);
                (9) other Federal, State, and tribal plans for imperiled
            species;
                (10) State or tribal hazard mitigation plans;
                (11) State or tribal water management plans; and
                (12) other State-based strategies that comprehensively
            implement adaptation activities to remediate the effects of
            climate change and ocean acidification on terrestrial, marine,
            and freshwater fish, wildlife, plants, and other natural
            resources.
        (f) Updating.--Each State plan shall be updated not less than every
    5 years.
        (g) Funding.--
                (1) In general.--Funds allocated to States under section
            480 shall be used only for activities that are consistent with
            a State natural resources adaptation plan that has been
            approved by the Secretaries of Interior and Commerce.
                (2) Funding prior to the approval of a state plan.--Until
            the earlier of the date that is 3 years after the date of the
            enactment of this subpart or the date on which a State receives
            approval for the State strategy, a State shall be eligible to
            receive funding under section 480 for adaptation activities
            that are--
                        (A) consistent with the comprehensive wildlife
                    strategy of the State and, where appropriate, other
                    natural resources conservation strategies; and
                        (B) in accordance with a workplan developed in
                    coordination with--
                                (i) the Secretary of the Interior; and
                                (ii) the Secretary of Commerce, for any
                            coastal State subject to the condition that
                            coordination with the Secretary of Commerce
                            shall be required only for those portions of
                            the strategy relating to activities affecting
                            the coastal zone.
                (3) Pending approval.--During the period for which approval
            by the applicable Secretary of a State plan is pending, the
            State may continue receiving funds under section 480 pursuant
            to the workplan described in paragraph (2)(B).

    SEC. 480. NATURAL RESOURCES CLIMATE CHANGE ADAPTATION FUND.

        (a) Allocations to States.--100 percent of the emission allowances
    made available for each year to carry out this subpart shall be
    provided to States to carry out natural resources adaptation activities
    in accordance with State natural resources adaptation plans approved
    under section 479. Specifically--
                (1) 84.4 percent shall be available to State wildlife
            agencies in accordance with the apportionment formula
            established under the second subsection (c) of section 4 of the
            Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669c), as
            added by section 902(e) of H.R. 5548 as introduced in the 106th
            Congress and enacted into law by section 1(a)(2) of Public Law
            106-553 (114 Stat. 2762A-119); and
                (2) 15.6 percent shall be available to State coastal
            agencies pursuant to the formula established by the Secretary
            of Commerce under section 306(c) of the Coastal Management Act
            of 1972 (16 U.S.C. 1455(c)).
        (b) Establishment of Fund.--
                (1) Establishment.--Subject to subtitle F of title IV,
            there is hereby established in the Treasury a separate account
            that shall be known as the Natural Resources Climate Change
            Adaptation Fund.
                (2) Authorization of appropriations.--Subject to subtitle F
            of title IV, there are authorized to be appropriated for
            subsection (c) such sums as are deposited in the Natural
            Resources Climate Change Fund, and the amounts appropriated for
            subsection (c) shall be no less than the total estimated annual
            deposits in the Natural Resources Climate Change Adaptation
            Fund.
        (c) Allocations to Federal Agencies.--
                (1) Department of the interior.--Of the amounts made
            available for each fiscal year to carry out this subpart--
                        (A) 27.6 percent shall be allocated to the
                    Secretary of the Interior for use in funding--
                                (i) natural resources adaptation activities
                            carried out--
                                        (I) under endangered species,
                                    migratory species, and other fish and
                                    wildlife programs administered by the
                                    National Park Service, the United
                                    States Fish and Wildlife Service, the
                                    Bureau of Indian Affairs, and the
                                    Bureau of Land Management;
                                        (II) on wildlife refuges, National
                                    Park Service land, and other public
                                    land under the jurisdiction of the
                                    United States Fish and Wildlife
                                    Service, the Bureau of Land Management,
                                    the Bureau of Indian Affairs, or the
                                    National Park Service; or
                                        (III) within Federal water managed
                                    by the Bureau of Reclamation and the
                                    National Park Service; and
                                (ii) for the implementation of the National
                            Fish and Wildlife Habitat and Corridors
                            Identification Program pursuant to section 481;
                        (B) 8.1 percent shall be allocated to the Secretary
                    of the Interior for natural resources adaptation
                    activities carried out under cooperative grant
                    programs, including--
                                (i) the cooperative endangered species
                            conservation fund authorized under section 6 of
                            the Endangered Species Act of 1973 (16 U.S.C.
                            1535);
                                (ii) programs under the North American
                            Wetlands Conservation Act (16 U.S.C. 4401 et
                            seq.);
                                (iii) the Neotropical Migratory Bird
                            Conservation Fund established by section 478(a)
                            of the Neotropical Migratory Bird Conservation
                            Act (16 U.S.C. 6108(a));
                                (iv) the Coastal Program of the United
                            States Fish and Wildlife Service;
                                (v) the National Fish Habitat Action Plan;
                                (vi) the Partners for Fish and Wildlife
                            Program;
                                (vii) the Landowner Incentive Program;
                                (viii) the Wildlife Without Borders Program
                            of the United States Fish and Wildlife Service;
                            and
                                (ix) the Migratory Species Program and Park
                            Flight Migratory Bird Program of the National
                            Park Service; and
                        (C) 4.9 percent shall be allocated to the Secretary
                    of the Interior to provide financial assistance to
                    Indian tribes to carry out natural resources adaptation
                    activities through the Tribal Wildlife Grants Program
                    of the United States Fish and Wildlife Service and in
                    accordance with the Indian Self-Determination and
                    Educational Assistance Act (25 U.S.C. 450(f)).
                (2) Land and water conservation fund.--
                        (A) Deposits.--
                                (i) In general.--Of the amounts made
                            available for each fiscal year to carry out
                            this subpart, 19.5 percent shall be deposited
                            into the Land and Water Conservation Fund
                            established under section 2 of the Land and
                            Water Conservation Fund Act of 1965 (16 U.S.C.
                            460l-5).
                                (ii) Use of deposits.-- (I) Deposits into
                            the Land and Water Conservation Fund under this
                            paragraph shall be supplemental to
                            authorizations provided under section 3 of the
                            Land and Water Conservation Fund Act of 1965
                            (16 U.S.C. 460l-6), which shall remain
                            available for nonadaptation needs.
                                (II) There are authorized to be
                            appropriated for activities in this subpart
                            such sums as are deposited in the Land and
                            Water Conservation Fund pursuant to section
                            480(c)(3)(A)(ii), and the amounts appropriated
                            for this paragraph shall be no less than the
                            total estimated annual deposits in the Land and
                            Water Conservation Fund.
                        (B) Allocations.--Of the amounts deposited under
                    this paragraph into the Land and Water Conservation
                    Fund--
                                (i) \1/6\ shall be allocated to the
                            Secretary of the Interior and made available on
                            a competitive basis to carry out natural
                            resources adaptation activities through the
                            acquisition of land and interests in land under
                            section 6 of the Land and Water Conservation
                            Fund Act of 1965 (16 U.S.C. 460l-8)--
                                        (I) to States in accordance with
                                    their natural resources adaptation
                                    plans, and to Indian tribes;
                                        (II) notwithstanding section 5 of
                                    that Act (16 U.S.C. 460l-7); and
                                        (III) in addition to any funds
                                    provided pursuant to annual
                                    appropriations Acts, the Energy Policy
                                    Act of 2005 (42 U.S.C. 15801 et seq.),
                                    or any other authorization for
                                    nonadaptation needs;
                                (ii) \1/3\ shall be allocated to the
                            Secretary of the Interior to carry out natural
                            resources adaptation activities through the
                            acquisition of lands and interests in land
                            under section 7 of the Land and Water
                            Conservation Fund Act of 1965 (16 U.S.C. 460l-
                            9);
                                (iii) \1/6\ shall be allocated to the
                            Secretary of Agriculture and made available to
                            the States and Indian tribes to carry out
                            natural resources adaptation activities through
                            the acquisition of land and interests in land
                            under section 7 of the Forest Legacy Program
                            under the Cooperative Forestry Assistance Act
                            of 1978 (16 U.S.C. 2103c); and
                                (iv) \1/3\ shall be allocated to the
                            Secretary of Agriculture to carry out natural
                            resources adaptation activities through the
                            acquisition of land and interests in land under
                            section 7 of the Land and Water Conservation
                            Fund Act of 1965 (16 U.S.C. 460l-9).
                        (C) Expenditure of funds.--In allocating funds
                    under subparagraph (B), the Secretary of the Interior
                    and the Secretary of Agriculture shall take into
                    consideration factors including--
                                (i) the availability of non-Federal
                            contributions from State, local, or private
                            sources;
                                (ii) opportunities to protect fish and
                            wildlife corridors or otherwise to link or
                            consolidate fragmented habitats;
                                (iii) opportunities to reduce the risk of
                            catastrophic wildfires, drought, extreme
                            flooding, or other climate-related events that
                            are harmful to fish and wildlife and people;
                            and
                                (iv) the potential for conservation of
                            species or habitat types at serious risk due to
                            climate change, ocean acidification, and other
                            stressors.
                (3) Forest service.--Of the amounts made available for each
            fiscal year to carry out this subpart, 8.1 percent shall be
            allocated to the Secretary of Agriculture for use in funding
            natural resources adaptation activities carried out on national
            forests and national grasslands under the jurisdiction of the
            Forest Service and for natural resource adaptation activities
            on State and private forest lands carried out under the
            Cooperative Forestry Assistance Act of 1978.
                (4) Department of commerce.--Of the amounts made available
            for each fiscal year to carry out this subpart, 11.5 percent
            shall be allocated to the Secretary of Commerce for use in
            funding natural resources adaptation activities to protect,
            maintain, and restore coastal, estuarine, and marine resources,
            habitats, and ecosystems, including such activities carried out
            under--
                        (A) the coastal and estuarine land conservation
                    program;
                        (B) the community-based restoration program;
                        (C) the Coastal Zone Management Act of 1972 (16
                    U.S.C. 1451 et seq.), that are specifically designed to
                    strengthen the ability of coastal, estuarine, and
                    marine resources, habitats, and ecosystems to adapt to
                    and withstand the impacts of climate change and ocean
                    acidification;
                        (D) the Open Rivers Initiative;
                        (E) the Magnuson-Stevens Fishery Conservation and
                    Management Act (16 U.S.C. 1801 et seq.);
                        (F) the Marine Mammal Protection Act of 1972 (16
                    U.S.C. 1361 et seq.);
                        (G) the Endangered Species Act of 1973 (16 U.S.C.
                    1531 et seq.);
                        (H) the Marine Protection, Research, and
                    Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.);
                        (I) the Coral Reef Conservation Act of 2000 (16
                    U.S.C. 6401 et seq.); and
                        (J) the Estuary Restoration Act of 2000 (33 U.S.C.
                    2901 et seq.).
                (5) Environmental protection agency.--Of the amounts made
            available each fiscal year to carry out this section, 12.2
            percent shall be allocated to the Administrator for use in
            natural resources adaptation activities restoring and
            protecting--
                        (A) large-scale freshwater aquatic ecosystems, such
                    as the Everglades, the Great Lakes, Flathead Lake, the
                    Missouri River, the Mississippi River, the Colorado
                    River, the Sacramento-San Joaquin Rivers, the Ohio
                    River, the Columbia-Snake River System, the
                    Apalachicola, Chattahoochee, and Flint River System,
                    the Connecticut River, and the Yellowstone River;
                        (B) large-scale estuarine ecosystems, such as
                    Chesapeake Bay, Long Island Sound, Puget Sound, the
                    Mississippi River Delta, the San Francisco Bay Delta,
                    Narragansett Bay, and Albemarle-Pamlico Sound; and
                        (C) freshwater and estuarine ecosystems,
                    watersheds, and basins identified as priorities by the
                    Administrator, working in cooperation with other
                    Federal agencies, States, Indian tribes, local
                    governments, scientists, and other conservation
                    partners.
                (6) Corps of engineers.--Of the amounts made available each
            fiscal year to carry out this section, 8.1 percent shall be
            available to the Secretary of the Army for use by the Corps of
            Engineers to carry out natural resources adaptation activities
            restoring--
                        (A) large-scale freshwater aquatic ecosystems, such
                    as the ecosystems described in paragraph (5)(A);
                        (B) large-scale estuarine ecosystems, such as the
                    ecosystems described in paragraph (5)(B);
                        (C) freshwater and estuarine ecosystems,
                    watersheds, and basins identified as priorities by the
                    Corps of Engineers, working in cooperation with other
                    Federal agencies, States, Indian tribes, local
                    governments, scientists, and other conservation
                    partners; and
                        (D) habitats and ecosystems through the
                    implementation of estuary habitat restoration projects
                    authorized by the Estuary Restoration Act of 2000 (33
                    U.S.C. 2901 et seq.), project modifications for
                    improvement of the environment, aquatic restoration and
                    protection projects authorized by section 206 of the
                    Water Resources Development Act of 1996 (33 U.S.C.
                    2330), and other appropriate programs and activities.
        (d) Use of Funds by Federal Departments and Agencies.--Funds
    allocated to Federal departments and agencies under this section shall
    only be used for natural resources adaptation activities that are
    consistent with an adaptation plan developed and approved by the
    President under section 478.
        (e) State Cost Sharing.--Notwithstanding any other provision of
    law, a State that receives a grant with amounts allocated under this
    section shall use funds from non-Federal sources to pay at least 10
    percent of the costs of each activity carried out using amounts
    provided under the grant.

    SEC. 481. NATIONAL WILDLIFE HABITAT AND CORRIDORS INFORMATION PROGRAM.

         (a) Establishment.--Within 6 months of the date of enactment of
    this subpart, the Secretary of the Interior, in cooperation with the
    States and Indian tribes, shall establish a National Fish and Wildlife
    Habitat and Corridors Information Program in accordance with the
    requirements of this section.
        (b) Purpose.--The purpose of this program is to--
                (1) support States and Indian tribes in the development of
            a geographic information system database of fish and wildlife
            habitat and corridors that would inform planning and
            development decisions within each State and Indian tribe,
            enable each State and Indian tribe to model climate impacts and
            adaptation, and provide geographically specific enhancements of
            State and tribal wildlife action plans;
                (2) ensure the collaborative development, with the States
            and Indian tribes, of a comprehensive, national geographic
            information system database of maps, models, data, surveys,
            informational products, and other geospatial information
            regarding fish and wildlife habitat and corridors, that--
                        (A) is based on consistent protocols for sampling
                    and mapping across landscapes that take into account
                    regional differences; and
                        (B) that utilizes--
                                (i) existing and planned State- and tribal-
                            based geographic information system databases;
                            and
                                (ii) existing databases, analytical tools,
                            metadata activities, and other information
                            products available through the National
                            Biological Information Infrastructure
                            maintained by the Secretary and nongovernmental
                            organizations; and
                (3) facilitate the use of such databases by Federal, State,
            local, and tribal decisionmakers to incorporate qualitative
            information on fish and wildlife habitat and corridors at the
            earliest possible stage to--
                        (A) prioritize and target natural resources
                    adaptation strategies and activities;
                        (B) avoid, minimize, and mitigate the impacts on
                    fish and wildlife habitat and corridors in siting
                    energy development, water, transmission,
                    transportation, and other land use projects;
                        (C) assess the impacts of existing development on
                    habitats and corridors; and
                        (D) develop management strategies to enhance the
                    ability of fish, wildlife, and plant species to migrate
                    or respond to shifting habitats within existing
                    habitats and corridors.
        (c) Habitat and Corridors Information System.--
                (1) In general.--The Secretary, in cooperation with the
            States and Indian tribes, shall develop a Habitat and Corridors
            Information System.
                (2) Contents.--The System shall--
                        (A) include maps, data, and descriptions of fish
                    and wildlife habitat and corridors, that--
                                (i) have been developed by Federal
                            agencies, State wildlife agencies and natural
                            heritage programs, Indian tribes, local
                            governments, nongovernmental organizations, and
                            industry;
                                (ii) meet accepted Geospatial
                            Interoperability Framework data and metadata
                            protocols and standards;
                        (B) include maps and descriptions of projected
                    shifts in habitats and corridors of fish and wildlife
                    species in response to climate change;
                        (C) assure data quality and make the data, models,
                    and analyses included in the System available at scales
                    useful to decisionmakers--
                                (i) to prioritize and target natural
                            resources adaptation strategies and activities;
                                (ii) to assess the impacts of proposed
                            energy development, water, transmission,
                            transportation, and other land use projects and
                            avoid, minimize, and mitigate those impacts on
                            habitats and corridors;
                                (iii) to assess the impacts of existing
                            development on habitats and corridors; and
                                (iv) to develop management strategies to
                            enhance the ability of fish, wildlife, and
                            plant species to migrate or respond to shifting
                            habitats within existing habitats and
                            corridors;
                        (D) establish a process for updating maps and other
                    information as landscapes, habitats, corridors, and
                    wildlife populations change or as other information
                    becomes available;
                        (E) encourage the development of collaborative
                    plans by Federal and State agencies and Indian tribes
                    to monitor and evaluate the efficacy of the System to
                    meet the needs of decisionmakers;
                        (F) identify gaps in habitat and corridor
                    information, mapping, and research that should be
                    addressed to fully understand and assess current data
                    and metadata, and to prioritize research and future
                    data collection activities for use in updating the
                    System and provide support for those activities;
                        (G) include mechanisms to support collaborative
                    research, mapping, and planning of habitats and
                    corridors by Federal and State agencies, Indian tribes,
                    and other interested stakeholders;
                        (H) incorporate biological and geospatial data on
                    species and corridors found in energy development and
                    transmission plans, including renewable energy
                    initiatives, transportation, and other land use plans;
                        (I) be based on the best scientific information
                    available; and
                        (J) identify, prioritize, and describe key parcels
                    of non-Federal land located within the boundaries of
                    units of the National Park System, National Wildlife
                    Refuge System, National Forest System, or National
                    Grassland System that are critical to maintenance of
                    wildlife habitat and migration corridors.
        (d) Financial and Other Support.--The Secretary may provide support
    to the States and Indian tribes, including financial and technical
    assistance, for activities that support the development and
    implementation of the System.
        (e) Coordination.--The Secretary, in cooperation with the States
    and Indian tribes, shall make recommendations on how the information
    developed in the System may be incorporated into existing relevant
    State and Federal plans affecting fish and wildlife, including land
    management plans, the State Comprehensive Wildlife Conservation
    Strategies, and appropriate tribal conservation plans, to ensure that
    they--
                (1) prevent unnecessary habitat fragmentation and
            disruption of corridors;
                (2) promote the landscape connectivity necessary to allow
            wildlife to move as necessary to meet biological needs, adjust
            to shifts in habitat, and adapt to climate change; and
                (3) minimize the impacts of energy, development, water,
            transportation, and transmission projects and other activities
            expected to impact habitat and corridors.
        (f) Definitions.--In this section:
                (1) Geospatial interoperability framework.--The term
            ``Geospatial Interoperability Framework'' means the strategy
            utilized by the National Biological Information Infrastructure
            that is based upon accepted standards, specifications, and
            protocols adopted through the International Standards
            Organization, the Open Geospatial Consortium, and the Federal
            Geographic Data Committee, to manage, archive, integrate,
            analyze, and make accessible geospatial and biological data and
            metadata.
                (2) Secretary.--The term ``Secretary'' means the Secretary
            of the Interior.

    SEC. 482. ADDITIONAL PROVISIONS REGARDING INDIAN TRIBES.

        (a) Federal Trust Responsibility.--Nothing in this subpart is
    intended to amend, alter, or give priority over the Federal trust
    responsibility to Indian tribes.
        (b) Exemption From FOIA.--Information received by a Federal agency
    pursuant to this Act relating to the location, character, or ownership
    of human remains of a person of Indian ancestry; or resources, cultural
    items, uses, or activities identified by an Indian tribe as traditional
    or cultural because of the long-established significance or ceremonial
    nature to the Indian tribe; shall not be subject to disclosure under
    section 552 of title 5, United States Code, if the head of the agency,
    in consultation with the Secretary of the Interior and an affected
    Indian tribe, determines that disclosure may--
                (1) cause a significant invasion of privacy;
                (2) risk harm to the human remains or resources, cultural
            items, uses, or activities; or
                (3) impede the use of a traditional religious site by
            practitioners.
        (c) Application of Other Law.--The Secretary of the Interior may
    apply the provisions of Public Law 93-638 where appropriate in the
    implementation of this subpart.

            PART 2--INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM

    SEC. 491. FINDINGS AND PURPOSES.

        (a) Findings.--Congress finds the following:
                (1) Global climate change is a potentially significant
            national and global security threat multiplier and is likely to
            exacerbate competition and conflict over agricultural,
            vegetative, marine, and water resources and to result in
            increased displacement of people, poverty, and hunger within
            developing countries.
                (2) The strategic, social, political, economic, cultural,
            and environmental consequences of global climate change are
            likely to have disproportionate adverse impacts on developing
            countries, which have less economic capacity to respond to such
            impacts.
                (3) The countries most vulnerable to climate change, due
            both to greater exposure to harmful impacts and to lower
            capacity to adapt, are developing countries with very low
            industrial greenhouse gas emissions that have contributed less
            to climate change than more affluent countries.
                (4) To a much greater degree than developed countries,
            developing countries rely on the natural and environmental
            systems likely to be affected by climate change for sustenance,
            livelihoods, and economic growth and stability.
                (5) Within developing countries there may be varying
            climate change adaptation and resilience needs among different
            communities and populations, including impoverished
            communities, children, women, and indigenous peoples.
                (6) The consequences of global climate change, including
            increases in poverty and destabilization of economies and
            societies, are likely to pose long-term challenges to the
            national security, foreign policy, and economic interests of
            the United States.
                (7) It is in the national security, foreign policy, and
            economic interests of the United States to recognize, plan for,
            and mitigate the international strategic, social, political,
            cultural, environmental, health, and economic effects of
            climate change and to assist developing countries to increase
            their resilience to those effects.
                (8) Under Article 4 of the United Nations Framework
            Convention on Climate Change, developed country parties,
            including the United States, committed to ``assist the
            developing country parties that are particularly vulnerable to
            the adverse effects of climate change in meeting costs of
            adaptation to those adverse effects''.
                (9) Under the Bali Action Plan, developed country parties
            to the United Nations Framework Convention on Climate Change,
            including the United States, committed to ``enhanced action on
            the provision of financial resources and investment to support
            action on mitigation and adaptation and technology
            cooperation,'' including, inter alia, consideration of
            ``improved access to adequate, predictable, and sustainable
            financial resources and financial and technical support, and
            the provision of new and additional resources, including
            official and concessional funding for developing country
            parties''.
        (b) Purposes.--The purposes of this part are--
                (1) to provide new and additional assistance from the
            United States to the most vulnerable developing countries,
            including the most vulnerable communities and populations
            therein, in order to support the development and implementation
            of climate change adaptation programs and activities that
            reduce the vulnerability and increase the resilience of
            communities to climate change impacts, including impacts on
            water availability, agricultural productivity, flood risk,
            coastal resources, timing of seasons, biodiversity, economic
            livelihoods, health and diseases, and human migration; and
                (2) to provide such assistance in a manner that protects
            and promotes the national security, foreign policy,
            environmental, and economic interests of the United States to
            the extent such interests may be advanced by minimizing,
            averting, or increasing resilience to climate change impacts.

    SEC. 492. DEFINITIONS.

        In this part:
                (1) Allowance.--The term ``allowance'' means an emission
            allowance established under section 721 of the Clean Air Act.
                (2) Appropriate congressional committees.--The term
            ``appropriate congressional committees'' means--
                        (A) the Committees on Energy and Commerce,
                    Financial Services, and Foreign Affairs of the House of
                    Representatives; and
                        (B) the Committees on Environment and Public Works
                    and Foreign Relations of the Senate.
                (3) Developing country.--The term ``developing country''
            means a country eligible to receive official development
            assistance according to the income guidelines of the
            Development Assistance Committee of the Organization for
            Economic Cooperation and Development.
                (4) Most vulnerable developing countries.--The term ``most
            vulnerable developing countries'' means, as determined by the
            Administrator of USAID, developing countries that are at risk
            of substantial adverse impacts of climate change and have
            limited capacity to respond to such impacts, considering the
            approaches included in any international treaties and
            agreements.
                (5) Most vulnerable communities and populations.--The term
            ``most vulnerable communities and populations'' means
            communities and populations that are at risk of substantial
            adverse impacts of climate change and have limited capacity to
            respond to such impacts, including impoverished communities,
            children, women, and indigenous peoples.
                (6) Program.--The term ``Program'' means the International
            Climate Change Adaptation Program established under section
            493.
                (7) USAID.--The term ``USAID'' means the United States
            Agency for International Development.
                (8) United nations framework convention on climate
            change.--The term ``United Nations Framework Convention on
            Climate Change'' or ``Convention'' means the United Nations
            Framework Convention on Climate Change done at New York on May
            9, 1992, and entered into force on March 21, 1994.

    SEC. 493. INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM.

        (a) Establishment.--The Secretary of State, in consultation with
    the Administrator of USAID, the Secretary of the Treasury, and the
    Administrator of the Environmental Protection Agency, shall establish
    an International Climate Change Adaptation Program in accordance with
    the requirements of this part.
        (b) Allowance Account.--Allowances allocated pursuant to section
    782(n) of the Clean Air Act shall be available for distribution to
    carry out the Program established under subsection (a).
        (c) Supplement Not Supplant.--Assistance provided under this part
    shall be used to supplement, and not to supplant, any other Federal,
    State, or local resources available to carry out activities of the type
    carried out under the Program.

    SEC. 494. DISTRIBUTION OF ALLOWANCES.

        (a) In General.--The Secretary of State, or such other Federal
    agency head as the President may designate, after consultation with the
    Secretary of the Treasury, the Administrator of USAID, and the
    Administrator of the Environmental Protection Agency, shall direct the
    distribution of allowances to carry out the Program--
                (1) in the form of bilateral assistance pursuant to the
            requirements under section 495;
                (2) to multilateral funds or international institutions
            pursuant to the Convention or an agreement negotiated under the
            Convention; or
                (3) through a combination of the mechanisms identified
            under paragraphs (1) and (2).
        (b) Limitation.--
                (1) Conditional distribution to multilateral funds or
            international institutions.--In any fiscal year, the Secretary
            of State, or such other Federal agency head as the President
            may designate, in consultation with the Administrator of USAID,
            the Secretary of the Treasury, and the Administrator of the
            Environmental Protection Agency, shall distribute at least 40
            percent and up to 60 percent of the allowances available to
            carry out the Program to one or more multilateral funds or
            international institutions that meet the requirements of
            paragraph (2), if any such fund or institution exists, and
            shall annually certify in a report to the appropriate
            congressional committees that any multilateral fund or
            international institution receiving allowances under this
            section meets the requirements of paragraph (2) or that no
            multilateral fund or international institution that meets the
            requirements of paragraph (2) exists, as the case may be. The
            Secretary of State shall notify the appropriate congressional
            committees not less than 15 days prior to any transfer of
            allowances to a multilateral fund or international institution
            pursuant to this section.
                (2) Multilateral fund or international institution
            eligibility.--A multilateral fund or international institution
            is eligible to receive allowances available to carry out the
            Program--
                        (A) if--
                                (i) such fund or institution is established
                            pursuant to--
                                        (I) the Convention; or
                                        (II) an agreement negotiated under
                                    the Convention; or
                                (ii) the allowances are directed to one or
                            more multilateral development banks or
                            international development institutions,
                            pursuant to an agreement negotiated under such
                            Convention; and
                        (B) if such fund or institution--
                                (i) specifies the terms and conditions
                            under which the United States is to provide
                            allowances to the fund or institution, and
                            under which the fund or institution is to
                            provide assistance to recipient countries;
                                (ii) ensures that assistance from the
                            United States to the fund or institution and
                            the principal and income of the fund or
                            institution are disbursed only for purposes
                            that are consistent with those described in
                            section 491(b)(1);
                                (iii) requires a regular meeting of a
                            governing body of the fund or institution that
                            includes representation from countries among
                            the most vulnerable developing countries and
                            provides public access;
                                (iv) requires that local communities and
                            indigenous peoples in areas where any
                            activities or programs are planned are engaged
                            through adequate disclosure of information,
                            public participation, and consultation; and
                                (v) prepares and makes public an annual
                            report that--
                                        (I) describes the process and
                                    methodology for selecting the
                                    recipients of assistance from the fund
                                    or institution, including assessments
                                    of vulnerability;
                                        (II) describes specific programs
                                    and activities supported by the fund or
                                    institution and the extent to which the
                                    assistance is addressing the adaptation
                                    needs of the most vulnerable developing
                                    countries, and the most vulnerable
                                    communities and populations therein;
                                        (III) describes the performance
                                    goals for assistance authorized under
                                    the fund or institution and expresses
                                    such goals in an objective and
                                    quantifiable form, to the extent
                                    practicable;
                                        (IV) describes the performance
                                    indicators to be used in measuring or
                                    assessing the achievement of the
                                    performance goals described in
                                    subclause (III);
                                        (V) provides a basis for
                                    recommendations for adjustments to
                                    assistance authorized under this part
                                    to enhance the impact of such
                                    assistance; and
                                        (VI) describes the participation of
                                    other nations and international
                                    organizations in supporting and
                                    governing the fund or institution.
        (c) Oversight.--
                (1) Distribution to multilateral funds or international
            institutions.--The Secretary of State, or such other Federal
            agency head as the President may designate, in consultation
            with the Administrator of USAID, shall oversee the distribution
            of allowances available to carry out the Program to a
            multilateral fund or international institution under subsection
            (b).
                (2) Bilateral assistance.--The Administrator of USAID, in
            consultation with the Secretary of State, shall oversee the
            distribution of allowances available to carry out the Program
            for bilateral assistance under section 495.

    SEC. 495. BILATERAL ASSISTANCE.

        (a) Activities and Foreign Aid.--
                (1) In general.--In order to achieve the purposes of this
            part, the Administrator of USAID may carry out programs and
            activities and distribute allowances to any private or public
            group (including international organizations and faith-based
            organizations), association, or other entity engaged in
            peaceful activities to--
                        (A) provide assistance to the most vulnerable
                    developing countries for--
                                (i) the development of national or regional
                            climate change adaptation plans, including a
                            systematic assessment of socioeconomic
                            vulnerabilities in order to identify the most
                            vulnerable communities and populations;
                                (ii) associated national policies; and
                                (iii) planning, financing, and execution of
                            adaptation programs and activities;
                        (B) support investments, capacity-building
                    activities, and other assistance, to reduce
                    vulnerability and promote community-level resilience
                    related to climate change and its impacts in the most
                    vulnerable developing countries, including impacts on
                    water availability, agricultural productivity, flood
                    risk, coastal resources, timing of seasons,
                    biodiversity, economic livelihoods, health, human
                    migration, or other social, economic, political,
                    cultural, or environmental matters;
                        (C) support climate change adaptation research in
                    or for the most vulnerable developing countries;
                        (D) reduce vulnerability and provide increased
                    resilience to climate change for local communities and
                    livelihoods in the most vulnerable developing countries
                    by encouraging--
                                (i) the protection and rehabilitation of
                            natural systems;
                                (ii) the enhancement and diversification of
                            agricultural, fishery, and other livelihoods;
                            and
                                (iii) the reduction of disaster risks;
                        (E) support the deployment of technologies to help
                    the most vulnerable developing countries respond to the
                    destabilizing impacts of climate change and encourage
                    the identification and adoption of appropriate
                    renewable and efficient energy technologies that are
                    beneficial in increasing community-level resilience to
                    the impacts of global climate change in those
                    countries; and
                        (F) encourage the engagement of local communities
                    through disclosure of information, consultation, and
                    the communities' informed participation relating to the
                    development of plans, programs, and activities to
                    increase community-level resilience to climate change
                    impacts.
                (2) Limitations.--Not more than 10 percent of the
            allowances made available to carry out bilateral assistance
            under this part in any year shall be distributed to support
            activities in any single country.
                (3) Prioritizing assistance.--In providing assistance under
            this section, the Administrator of USAID shall give priority to
            countries, including the most vulnerable communities and
            populations therein, that are most vulnerable to the adverse
            impacts of climate change, determined by the likelihood and
            severity of such impacts and the country's capacity to adapt to
            such impacts.
        (b) Community Engagement.--
                (1) In general.--The Administrator of USAID shall ensure
            that local communities, including the most vulnerable
            communities and populations therein, in areas where any
            programs or activities are carried out pursuant to this section
            are engaged in, through disclosure of information, public
            participation, and consultation, the design, implementation,
            monitoring, and evaluation of such programs and activities.
                (2) Consultation and disclosure.--For each country
            receiving assistance under this section, the Administrator of
            USAID shall establish a process for consultation with, and
            disclosure of information to, local, national, and
            international stakeholders regarding any programs and
            activities carried out pursuant to this section.
        (c) Coordination.--
                (1) Alignment of activities.--Subject to the direction of
            the President and the Secretary of State, the Administrator of
            USAID shall, to the extent practicable, seek to align
            activities under this section with broader development, poverty
            alleviation, or natural resource management objectives and
            initiatives in the recipient country.
                (2) Coordination of activities.--The Administrator of USAID
            shall ensure that there is coordination among the activities
            under this section, subtitle D of this title, and part E of
            title VII of the Clean Air Act, in order to maximize the
            effectiveness of United States assistance to developing
            countries.
        (d) Reporting.--
                (1) Initial report.--Not later than 180 days after the date
            of enactment of this part, the Administrator of USAID, in
            consultation with the Secretary of State, shall submit to the
            President and the appropriate congressional committees an
            initial report that--
                        (A) based on the most recent information available
                    from reliable public sources or knowledge obtained by
                    USAID on a reliable basis, as determined by the
                    Administrator of USAID, identifies the developing
                    countries, including the most vulnerable communities
                    and populations therein, that are most vulnerable to
                    climate change impacts and in which assistance may have
                    the greatest and most sustainable benefit in reducing
                    vulnerability to climate change; and
                        (B) describes the process and methodology for
                    selecting the recipients of assistance under subsection
                    (a)(1).
                (2) Annual reports.--Not later than 18 months after the
            date on which the initial report is submitted pursuant to
            paragraph (1), and annually thereafter, the Administrator of
            USAID, in consultation with the Secretary of State, shall
            submit to the President and the appropriate congressional
            committees a report that--
                        (A) describes the extent to which global climate
                    change, through its potential negative impacts on
                    sensitive populations and natural resources in the most
                    vulnerable developing countries, may threaten, cause,
                    or exacerbate political, economic, environmental,
                    cultural, or social instability or international
                    conflict in those regions;
                        (B) describes the ramifications of any potentially
                    destabilizing impacts climate change may have on the
                    national security, foreign policy, and economic
                    interests of the United States, including--
                                (i) the creation of environmental migrants
                            and internally displaced peoples;
                                (ii) international or internal armed
                            conflicts over water, food, land, or other
                            resources;
                                (iii) loss of agricultural and other
                            livelihoods, cultural stability, and other
                            causes of increased poverty and economic
                            destabilization;
                                (iv) decline in availability of resources
                            needed for survival, including water;
                                (v) increased impact of natural disasters
                            (including droughts, flooding, and other severe
                            weather events);
                                (vi) increased prevalence or virulence of
                            climate-related diseases; and
                                (vii) intensified urban migration;
                        (C) describes how allowances available under this
                    section were distributed during the previous fiscal
                    year to enhance the national security, foreign policy,
                    and economic interests of the United States and assist
                    in avoiding the economically, politically,
                    environmentally, culturally, and socially destabilizing
                    impacts of climate change in most vulnerable developing
                    countries;
                        (D) identifies and recommends the developing
                    countries, including the most vulnerable communities
                    and populations therein, that are most vulnerable to
                    climate change impacts and in which assistance may have
                    the greatest and most sustainable benefit in reducing
                    vulnerability to climate change, including in the form
                    of deploying technologies, investments, capacity-
                    building activities, and other types of assistance for
                    adaptation to climate change impacts and approaches to
                    reduce greenhouse gases in ways that may also provide
                    community-level resilience to climate change impacts;
                    and
                        (E) describes cooperation undertaken with other
                    nations and international organizations to carry out
                    this part.
        (e) Monitoring and Evaluation.--
                (1) In general.--The Administrator of USAID shall establish
            and implement a system to monitor and evaluate the
            effectiveness and efficiency of assistance provided under this
            section in order to maximize the long-term sustainable
            development impact of such assistance, including the extent to
            which such assistance is meeting the purposes of this part and
            addressing the adaptation needs of developing countries.
                (2) Requirements.--In carrying out paragraph (1), the
            Administrator of USAID shall--
                        (A) in consultation with national governments in
                    recipient countries, establish performance goals for
                    assistance authorized under this section and express
                    such goals in an objective and quantifiable form, to
                    the extent practicable;
                        (B) establish performance indicators to be used in
                    measuring or assessing the achievement of the
                    performance goals described in subparagraph (A),
                    including an evaluation of--
                                (i) the extent to which assistance under
                            this section provided for disclosure of
                            information to, consultation with, and informed
                            participation by local communities;
                                (ii) the extent to which local communities
                            participated in the design, implementation, and
                            evaluation of programs and activities
                            implemented pursuant to this section; and
                                (iii) the impacts of such participation on
                            the goals and objectives of the programs and
                            activities implemented under this section;
                        (C) provide a basis for recommendations for
                    adjustments to assistance authorized under this section
                    to enhance the impact of such assistance; and
                        (D) include, in the annual report to the
                    appropriate congressional committees and other relevant
                    agencies required under subsection (d)(2), findings
                    resulting from the monitoring and evaluation of
                    programs and activities under this section.

                Subtitle F--Deficit Neutral Budgetary Treatment

    SEC. 496. DEFICIT NEUTRALITY.

        (a) Funds Established.--Funds established under sections 422, 467,
    and 480 of this Act are to be treated as separate accounts in the
    Treasury and shall be known as ``the Funds''.
        (b) Availability.--Funds appropriated or made available pursuant to
    sections 422(b), 467(b), and 480(b)(2) are only available for the
    purposes set forth under this Act. Receipts in the Funds and
    appropriations therefrom shall not be available and are precluded from
    obligation for any other purpose.
        (c) Estimation of Budgetary Impact.--For the purposes of estimating
    the revenue and spending effects of this Act;
                (1) the revenue assumed to be deposited into the Funds
            established under sections 422, 467, and 480, shall be
            attributed to this Act; and
                (2) the authorization or availability of appropriations
            from the Funds shall be treated as new direct spending and
            attributed to this Act.
        (d) Budgetary Treatment.--For the purposes of section 257 of the
    Balanced Budget and Emergency Deficit Control Act of 1985, the Funds,
    and amounts subsequently appropriated or made available for the
    purposes for which such Funds were established, shall be deemed to be
    included on the list of appropriations referenced under section
    250(c)(17) of that Act. Such appropriations from each Fund shall not be
    in excess of the amounts deposited into the respective Fund in the
    previous year.

               TITLE V--AGRICULTURAL AND FORESTRY RELATED OFFSETS

       Subtitle A--Offset Credit Program From Domestic Agricultural and
                                Forestry Sources

    SEC. 501. DEFINITIONS.

        (a) In General.--In this title:
                (1) Additional.--The term ``additional'', when used with
            respect to reductions or avoidance of greenhouse gas emissions,
            or to sequestration of greenhouse gases, means reductions,
            avoidance, or sequestration that result in a lower level of net
            greenhouse gas emissions or atmospheric concentrations than
            would occur in the absence of an offset project.
                (2) Additionality.--The term ``additionality'' means the
            extent to which reductions or avoidance of greenhouse gas
            emissions, or sequestration of greenhouse gases, are
            additional.
                (3) Administrator.--The term ``Administrator'' means the
            Administrator of the Environmental Protection Agency.
                (4) Advisory committee.--The term ``Advisory Committee''
            means the USDA Greenhouse Gas Emission Reduction and
            Sequestration Advisory Committee established under section
            1245(f) of the Food Security Act of 1985 (16 U.S.C. 3845).
                (5) Greenhouse gas.--The term ``greenhouse gas'' means any
            of the following:
                        (A) Carbon dioxide.
                        (B) Methane.
                        (C) Nitrous oxide.
                        (D) Sulfur hexafluoride.
                        (E) Hydrofluorocarbons from a chemical
                    manufacturing process at an industrial stationary
                    source.
                        (F) Any perfluorocarbon.
                        (G) Nitrogen trifluoride.
                        (H) Any other anthropogenic gas designated as a
                    greenhouse gas by the Administrator.
                (6) Leakage.--The term ``leakage'' means a significant and
            quantifiable increase in greenhouse gas emissions, or a
            significant and quantifiable decrease in sequestration, which
            is caused by an offset practice and occurs outside the
            boundaries of the offset practice.
                (7) Offset credit.--The term ``offset credit'' means a
            tradeable compliance instrument that--
                        (A) represents the reduction, avoidance, or
                    sequestration of 1 ton of carbon dioxide equivalent;
                    and
                        (B) is issued pursuant to this title.
                (8) Offset practice.--The term ``offset practice'' means an
            activity that reduces, avoids, or sequesters greenhouse gas
            emissions, and for which offset credits may be issued pursuant
            to this title.
                (9) Offset producer.--The term ``offset producer'' means an
            owner, operator, landlord, tenant, or sharecropper who has or
            shares responsibility for ensuring that an offset practice is
            established and maintained during the crediting period for
            purposes of an offset credit.
                (10) Offset project.--The term ``offset project'' means a
            practice or set of practices that reduce or avoid greenhouse
            gas emissions, or sequester greenhouse gases as implemented by
            an offset producer.
                (11) Offset project developer.--The term ``offset project
            developer'' means the offset producer or designee of the offset
            producer.
                (12) Practice type.--The term ``practice type'' means a
            discrete category of offset practices for which the Secretary
            develops a standardized methodology to accurately estimate the
            amount of greenhouse gas emissions reduced or avoided or
            greenhouse gases sequestered.
                (13) Reversal.--The term ``reversal'' means an intentional
            or unintentional loss of sequestered greenhouse gases to the
            atmosphere.
                (14) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.
                (15) Sequestration and sequestered.--The terms
            ``sequestered'' and ``sequestration'' mean the separation,
            isolation, or removal of greenhouse gases from the atmosphere,
            as determined by the Secretary. The terms include biological
            sequestration, but do not include ocean fertilization
            techniques.
                (16) Term offset credit.--The term ``term offset credit''
            means a compliance instrument authorized under section 504(d).
        (b) Agricultural and Forestry Exception to Definition of Capped
    Sector.--For purposes of this title and title III of this Act, and
    amendments made by such titles, the term ``capped sector'' means a
    sector of economic activity that directly emits capped emissions,
    including the industrial sector, the electricity generation sector, the
    transportation sector, and the residential and commercial sectors (to
    the extent they burn oil or natural gas), but not including the
    agricultural or forestry sectors.

    SEC. 502. ESTABLISHMENT OF OFFSET CREDIT PROGRAM FROM DOMESTIC
                  AGRICULTURAL AND FORESTRY SOURCES.

        (a) Establishment.--Not later than 1 year after the date of
    enactment of this title, the Secretary shall establish a program
    governing the generation of offset credits from domestic agricultural
    and forestry sources.
        (b) Requirements.--The program described in subsection (a) shall--
                (1) ensure that offset credits represent verifiable and
            additional greenhouse gas emission reductions or avoidance, or
            increases in sequestration; and
                (2) ensure that offset credits issued for sequestration
            offset projects are only issued for greenhouse gas reductions
            that result in a permanent net reduction in atmospheric
            greenhouse gases.
        (c) Duties of Secretary.--In addition to the duties described in
    subsection (a) and section 1245 of the Food Security Act of 1985 (16
    U.S.C. 3845), the Secretary shall, with respect to practices relating
    to offset credits from agricultural and forestry sources--
                (1) establish by rule methodologies by practice types for
            quantifying greenhouse gas benefits;
                (2) establish by rule methodologies for each practice type
            for establishing activity baselines and determining
            additionality;
                (3) establish by rule methodologies by practice types for
            accounting for and mitigating potential leakage;
                (4) establish rules to account for and address reversals;
                (5) establish rules to require third-party verification;
                (6) provide technical assistance to offset project
            developers using funds appropriated to the Conservation
            Operations account;
                (7) establish rules for approval of offset project plans;
                (8) establish rules for certification of implementation of
            offset project plans;
                (9) establish by rule requirements for reporting and record
            keeping; and
                (10) conduct audits.

    SEC. 503. LIST OF ELIGIBLE DOMESTIC AGRICULTURAL AND FORESTRY OFFSET
                  PRACTICE TYPES.

        (a) List Required.--
                (1) Preparation and publication.--Not later than 1 year
            after the date of enactment of this title, the Secretary shall
            prepare and publish in the Federal Register a list of domestic
            agricultural and forestry practice types that are eligible to
            generate offset credits under this title because the practices
            avoid or reduce greenhouse gas emissions or sequester
            greenhouse gases.
                (2) Recommendations.--In preparing the list under paragraph
            (1), the Secretary shall take into consideration the
            recommendations of the Advisory Committee.
        (b) Initial List.--At a minimum, the list prepared under this
    section shall include those practices that avoid or reduce greenhouse
    gas emissions or sequester greenhouse gases, such as--
                (1) agricultural, grassland, 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) reduction of nitrogen fertilizer use or
                    increase in nitrogen use efficiency;
                        (D) reduction in the frequency and duration of
                    flooding of rice paddies;
                        (E) reduction in carbon emissions from organic
                    soils;
                        (F) reduction in greenhouse gas emissions from
                    manure and effluent; and
                        (G) reduction in greenhouse gas emissions due to
                    changes in animal management practices, including
                    dietary modifications;
                (2) changes in carbon stocks attributed to land use change
            and forestry activities, including--
                        (A) afforestation or reforestation of acreage that
                    is not forested;
                        (B) forest management resulting in an increase in
                    forest carbon stores including but not limited to
                    harvested wood products;
                        (C) management of peatland or wetland;
                        (D) conservation of grassland and forested land;
                        (E) improved forest management, including
                    accounting for carbon stored in wood products;
                        (F) reduced deforestation or avoided forest
                    conversion;
                        (G) urban tree-planting and maintenance;
                        (H) agroforestry; and
                        (I) adaptation of plant traits or new technologies
                    that increase sequestration by forests; and
                (3) manure management and disposal, including--
                        (A) waste aeration;
                        (B) biogas capture and combustion; and
                        (C) application to fields as a substitute for
                    commercial fertilizer.
        (c) Additions and Revisions to List.--
                (1) Periodic revision.--Not later than 2 years after the
            date of enactment of this title, and every 2 years thereafter,
            the Secretary, after public notice and opportunity for comment,
            shall add to and revise the types of offset practices to the
            list established under subsection (a) if those types of
            practices meet the standards for environmental integrity that
            are consistent with the purposes of this title.
                (2) Consideration of petitions.--The Secretary shall--
                        (A) consider petitions to add types of offset
                    practices to the list established under subsection (a);
                    and
                        (B) add those types of offset practices to the list
                    if the types of offset practices meet standards for
                    environmental integrity consistent with the purposes of
                    this title.
                (3) Time for consideration of petitions.--Not later than 1
            year after the receipt of a petition under paragraph (2), the
            Secretary shall make a decision to either grant or deny the
            petition and publish a written explanation of the reasons for
            the Secretary's decision. The Secretary may not deny a petition
            under this subsection on the basis of inadequate Department of
            Agriculture resources at the time of the review.

    SEC. 504. REQUIREMENTS FOR DOMESTIC AGRICULTURAL AND FORESTRY
                  PRACTICES.

        (a) Methodologies.--
                (1) In general; condition.--In promulgating regulations
            under section 502, the Secretary shall establish methodologies
            for domestic agricultural and forestry practices listed under
            section 503, if the Secretary determines that methodologies can
            be established for such practices that meet each of the
            requirements of this section. The Secretary shall only issue
            offset credits under this title pursuant to promulgated
            methodologies applicable to the offset practice that avoided or
            reduced greenhouse gas emissions or sequestered greenhouse
            gases.
                (2) Specified methodologies.--The Secretary shall establish
            the following methodologies under this section:
                        (A) Activity baselines.--A standardized methodology
                    for establishing activity baselines for an offset
                    practice of that type. The Secretary shall set activity
                    baselines to reflect a conservative estimate of
                    performance or activities for the relevant type of
                    practice (excluding changes in performance or
                    activities due to the availability of offset credits)
                    such that the baseline provides an adequate margin of
                    safety to ensure the environmental integrity of offset
                    credits calculated in reference to such baseline.
                        (B) Additionality.--A standardized methodology for
                    determining the additionality of greenhouse gas
                    emissions reduction or avoidance, or greenhouse gas
                    sequestration, achieved by an offset practice of that
                    type. Such methodology shall ensure, at a minimum, that
                    any greenhouse gas emission reduction or avoidance, or
                    any greenhouse gas sequestration, is considered
                    additional only to the extent that it results from
                    activities that--
                                (i) are not required by existing government
                            regulations, as determined by the Secretary;
                                (ii) were not commenced prior to January 1,
                            2009, except in the case of--
                                        (I) offset project activities that
                                    commenced after January 1, 2001, and
                                    were registered as of the date of
                                    enactment of this title under an offset
                                    program with respect to which an
                                    affirmative determination has been made
                                    under section 740 of the Clean Air Act;
                                    or
                                        (II) activities that are readily
                                    reversible, with respect to which the
                                    Secretary may set an alternative
                                    earlier date under this subparagraph
                                    that is not earlier than January 1,
                                    2001, where the Secretary determines
                                    that setting such an alternative date
                                    may produce an environmental benefit by
                                    removing an incentive to cease and then
                                    reinitiate activities that began prior
                                    to January 1, 2009; and
                                (iii) exceed the applicable activity
                            baseline established under paragraph (2).
                        (C) Quantification methods.--A standardized
                    methodology for determining the extent to which
                    greenhouse gas emission reductions or avoidance, or
                    greenhouse gas sequestration, achieved by an offset
                    practice of that type exceeded a relevant activity
                    baseline, including methods for monitoring and
                    accounting for uncertainty.
                        (D) Leakage.--A standardized methodology for
                    accounting for and mitigating potential leakage, if
                    any, from an offset practice of that type, taking
                    uncertainty into account, excluding international
                    indirect land use changes unless a positive
                    determination is made under section 211(o)(13)(C)(iii)
                    of the Clean Air Act.
        (b) Special Considerations.--
                (1) Existing offset practices.--In establishing the
            methodologies under subsection (a), the Secretary shall give
            due consideration to methodologies for offset practices
            existing as of the date of the enactment of this title.
                (2) Certain factors.--As part of the methodologies
            established under subsection (a), the Secretary shall establish
            a formula that takes into account the components of the
            practice, the characteristics of the land on which the practice
            is applied, the crop produced, and such other factors as
            determined appropriate by the Secretary.
        (c) Accounting for Reversals.--
                (1) In general.--Except as provided in subsection (d) with
            respect to issuance of a term offset credit, for each type of
            practice listed under section 503, the Secretary shall
            establish requirements to account for and address reversals,
            including--
                        (A) a requirement to report any reversal with
                    respect to an offset practice for which offset credits
                    have been issued under this title;
                        (B) provisions to require emission allowances or
                    offset credits to be held in amounts to fully
                    compensate for greenhouse gas emissions attributable to
                    reversals, and to assign responsibility for holding
                    such emission allowances; and
                        (C) any other provisions that the Secretary
                    determines to be necessary to account for and address
                    reversals.
                (2) Mechanisms.--
                        (A) In general.--The Secretary shall prescribe
                    mechanisms to ensure that any sequestration of
                    greenhouse gases, with respect to which an offset
                    credit is issued under this title, results in a
                    permanent net increase in sequestration of greenhouse
                    gases, and that full account is taken of any actual or
                    potential reversal of such sequestration, with an
                    adequate margin of safety.
                        (B) Specific mechanisms.--The Secretary shall make
                    available one or more of the following mechanisms to
                    meet the requirements of this paragraph:
                                (i) An offsets reserve, pursuant to
                            paragraph (3).
                                (ii) Insurance that provides for purchase
                            and provision to the Secretary for retirement
                            of a quantity of offset credits or emission
                            allowances equal in number to the tons of
                            carbon dioxide equivalents of greenhouse gas
                            emissions released due to reversal.
                                (iii) Another mechanism if the Secretary
                            determines it is necessary to satisfy the
                            requirements of this title, taking into account
                            whether the reversal was intentional or
                            unintentional.
                (3) Offsets reserve.--
                        (A) In general.--An offsets reserve referred to in
                    paragraph (2)(B)(i) is a program under which, before
                    issuance of offset credits under this title, the
                    Secretary shall--
                                (i) subtract and reserve from the quantity
                            to be issued a quantity of offset credits based
                            on the risk of reversal;
                                (ii) hold those reserved offset credits in
                            the offsets reserve; and
                                (iii) register the holding of the reserved
                            offset credits in an offset registry.
                        (B) Practice reversal.--
                                (i) In general.--If a reversal has occurred
                            with respect to an offset practice within an
                            offset project, for which offset credits are
                            reserved under this paragraph, the Secretary
                            shall retire offset credits from the offsets
                            reserve to fully account for the tons of carbon
                            dioxide equivalent that are no longer
                            sequestered.
                                (ii) Intentional reversals.--If the
                            Secretary determines that a reversal was
                            intentional, the offset practice developer for
                            the relevant offset practice shall place into
                            the offsets reserve a quantity of offset
                            credits, or combination of offset credits and
                            emission allowances, equal in number to the
                            number of reserve offset credits that were
                            retired pursuant to clause (i).
                                (iii) Unintentional reversals.--If the
                            Secretary determines that a reversal was
                            unintentional, the offset project developer for
                            the relevant offset project shall place into
                            the offsets reserve a quantity of offset
                            credits, or combination of offset credits and
                            emission allowances, equal in number to half
                            the number of offset credits that were reserved
                            for that offset project, or half the number of
                            reserve offset credits that were canceled due
                            to the reversal pursuant to clause (i),
                            whichever is less, except that the Secretary
                            may lower this amount based on undue hardship
                            in the event of a catastrophic occurrence.
                        (C) Use of reserved offset credits.--Offset credits
                    placed into the offsets reserve under this paragraph
                    may not be used to comply with section 722 of the Clean
                    Air Act.
        (d) Term Offset Credits.--
                (1) Applicability.--With respect to a practice listed under
            section 503 that sequesters greenhouse gases and has a
            crediting period of no more than 5 years, the Secretary may
            address reversals pursuant to this subsection in lieu of
            permanently accounting for reversals pursuant to subsection
            (c).
                (2) Accounting for reversals.--For such practices or
            projects implementing such practices, the Secretary shall
            require only reversals that occur during the crediting period
            to be accounted for and addressed pursuant to subsection (c).
                (3) Credits issued.--For practices or projects regulated
            pursuant to paragraph (2), the Secretary shall issue under
            section 507 a term offset credit, in lieu of an offset credit,
            for each ton of carbon dioxide equivalent that has been
            sequestered.
        (e) Crediting Periods.--
                (1) In general.--For each offset practice type within an
            offset project, the Secretary shall specify a crediting period,
            and establish provisions for reenrollment for a subsequent
            crediting period, in accordance with this subsection.
                (2) Duration.--The crediting period shall have a term of up
            to--
                        (A) 5 years for agricultural sequestration
                    practices;
                        (B) 20 years for forestry sequestration practices;
                    and
                        (C) 10 years for other practice types that reduce
                    or avoid greenhouse gas emissions or sequester
                    greenhouse gases.
                (3) Eligibility.--An offset practice, within an offset
            project, shall--
                        (A) be eligible to generate offset credits under
                    this title only during the crediting period of the
                    offset practice; and
                        (B) remain eligible to generate offset credits,
                    only during the crediting period, subject to the
                    methodologies and practice type eligibility list that
                    applied as of the date of the project approval.
                (4) Reenrollment for subsequent crediting period.--
                        (A) Reenrollment authorized; time for
                    reenrollment.--An offset project developer may reenroll
                    for a subsequent crediting period, to commence after
                    termination of the current crediting period, subject to
                    the methodologies and practice type eligibility list in
                    effect at the time of reenrollment. Reenrollment may
                    not occur more than 18 months before the end of the
                    crediting period then in effect.
                        (B) Limitation.--The Secretary may limit the number
                    of subsequent crediting periods available for a
                    particular practice type.
        (f) Environmental Integrity.--In establishing the requirements
    under this section, the Secretary shall apply conservative assumptions
    or methods to ensure the environmental integrity of the cap established
    under section 703 of the Clean Air Act is not compromised.

    SEC. 505. PROJECT PLAN SUBMISSION AND APPROVAL.

        (a) Project Plan Required.--An offset project developer shall
    submit to the Secretary an offset project plan for approval.
        (b) Requirements.--As part of the regulations promulgated under
    this title, the Secretary shall include provisions for, and shall
    specify, the required components of an offset project plan, including--
                (1) designation of an offset project developer;
                (2) a list and schedule of the practices to be implemented;
                (3) any other information that the Secretary considers to
            be necessary--
                        (A) to determine whether the offset practice,
                    within the offset project, is eligible for issuance of
                    offset credits under regulations promulgated under this
                    title; and
                        (B) to achieve the purposes of this title.
        (c) Time for Consideration; Notification.--Not later than 90 days
    after receiving a complete offset project plan under subsection (a),
    the Secretary shall--
                (1) approve the plan in writing and include an estimate of
            the offset project credits that will be earned if the plan is
            implemented, subject to verification of all project-specific
            variables; or
                (2) if the plan is denied, provide the reasons for denial
            in writing.
        (d) Appeal.--The Secretary shall establish procedures for appeal
    and review of determinations made under this section.
        (e) Resubmission.--After an offset project plan is approved, the
    offset project developer shall not be required to resubmit a project
    plan during the crediting period.

    SEC. 506. VERIFICATION OF OFFSET PRACTICES.

        (a) In General.--As part of the regulations promulgated under this
    title, the Secretary shall establish requirements to verify--
                (1) that offset practices in an approved offset project
            plan have been implemented; and
                (2) the quantity of greenhouse gas emission reductions or
            avoidance, or sequestration of greenhouse gases, resulting from
            an offset practice and project.
        (b) Verification Reports.--
                (1) In general.--The regulations described in subsection
            (a) shall require an offset project developer to submit a
            report, prepared by a third-party verifier accredited under
            subsection (c).
                (2) Requirements.--The Secretary shall specify the
            components of a verification report required under paragraph
            (1), including--
                        (A) the name and contact information for the offset
                    project developer;
                        (B) a certification that the project plan has been
                    implemented;
                        (C) the quantity of greenhouse gases reduced,
                    avoided, or sequestered;
                        (D) a certification establishing that the conflict
                    of interest requirements in the regulations promulgated
                    under this title have been complied with;
                        (E) any other information that the Secretary
                    requires to determine the quantity of greenhouse gas
                    emission reduction or avoidance, or sequestration of
                    greenhouse gases, resulting from the offset practice
                    and project; and
                        (F) any other information that the Secretary
                    considers to be necessary to achieve the purposes of
                    this title.
        (c) Verifier Accreditation.--
                (1) In general.--As part of the regulations promulgated
            under this title, the Secretary shall establish a process and
            requirements for periodic accreditation of third-party
            verifiers for offset credits under this program to ensure that
            those verifiers are professionally qualified and have no
            conflicts of interest.
                (2) Public accessibility.--Each verifier meeting the
            requirements for accreditation in accordance with this
            subsection shall be listed in a publicly accessible database,
            which shall be maintained and updated by the Secretary.

    SEC. 507. CERTIFICATION OF OFFSET CREDITS.

        (a) Determination and Notification.--Not later than 90 days after
    receiving a complete verification report, the Secretary shall--
                (1) make a determination of the quantity of greenhouse gas
            emissions that have been reduced or avoided, or greenhouse
            gases that have been sequestered, by the offset practice in an
            approved and verified offset project plan; and
                (2) notify the offset project developer in writing of the
            determination.
        (b) Issuance of Offset Credits.--The Secretary shall issue 1 offset
    credit to an offset project developer for each ton of carbon dioxide
    equivalent that the Secretary determines has been reduced, avoided, or
    sequestered during the crediting period. Offset credits may be issued
    only for greenhouse gas emissions reduced, avoided, or sequestered
    after January 1, 2009.
        (c) Appeal.--The Secretary shall establish procedures for appeal
    and review of determinations made under subsection (a).
        (d) Timing.--Offset credits meeting the criteria described in
    subsection (b) shall be issued by the Secretary not later than 14 days
    after the date on which the Secretary makes a determination under
    subsection (a).
        (e) Registration.--The Secretary shall obtain from the
    Administrator a unique serial number to allow for the registration of
    each offset credit to be issued under this title.

    SEC. 508. OWNERSHIP AND TRANSFER OF OFFSET CREDITS.

        (a) Ownership.--Initial ownership of an offset credit shall lie
    with the offset project developer, unless otherwise specified in a
    legally binding contract or agreement.
        (b) Transferability.--An offset credit issued under this title may
    be sold, traded, or transferred, unless the offset credit has expired
    or been retired.

    SEC. 509. PROGRAM REVIEW AND REVISION.

        At least once every 5 years, the Secretary shall review and, based
    on new or updated information and taking into consideration the
    recommendations of the Advisory Board, update and revise--
                (1) the list of eligible practice types established under
            section 503;
                (2) the methodologies established, including specific
            activity baselines, under section 504(a);
                (3) the reversal requirements and mechanisms established or
            prescribed under subsections (c) and (d) of section 504;
                (4) measures to improve the accountability of the offsets
            program; and
                (5) any other requirements established under this title to
            ensure the environmental integrity and effective operation of
            this title.

    SEC. 510. ENVIRONMENTAL CONSIDERATIONS.

        If the Secretary lists forestry practices as eligible offset
    practice types under section 503, the Secretary, in consultation with
    appropriate Federal agencies, shall promulgate regulations for the
    selection and use of species in forestry and other relevant land
    management-related offset practices--
                (1) to ensure that native species are given primary
            consideration in such practices;
                (2) to encourage the conservation of biological diversity
            in such practices;
                (3) to prohibit the use of federally designated or State-
            designated noxious weeds;
                (4) to prohibit the use of a species listed by a regional
            or State invasive plant authority within the applicable region
            or State; and
                (5) in accordance with widely accepted, environmentally
            sustainable forestry practices.

    SEC. 511. AUDITS.

        (a) Audits Required.--The Secretary shall conduct, on an annual
    basis, random audits of offset projects, offset credits, and the
    practices of third-party verifiers. At a minimum, the Secretary shall
    conduct audits each year for a representative sample of practice types
    and geographical areas.
        (b) Additional Authority.--Nothing in this section prevents the
    Secretary from conducting any audit the Secretary considers to be
    necessary.

     Subtitle B--USDA Greenhouse Gas Emission Reduction and Sequestration
                               Advisory Committee

    SEC. 531. ESTABLISHMENT OF USDA GREENHOUSE GAS EMISSION REDUCTION AND
                  SEQUESTRATION ADVISORY COMMITTEE.

        Section 1245 of the Food Security Act of 1985 (16 U.S.C. 3854), as
    added by section 2709 of the Food, Conservation, and Energy Act of 2008
    (Public Law 110-246; 122 Stat. 1809), is amended by adding at the end
    the following new subsection:
        ``(f) USDA Greenhouse Gas Emission Reduction and Sequestration
    Advisory Committee.--
                ``(1) Establishment.--Not later than 30 days after the date
            of the enactment of the American Clean Energy and Security Act
            of 2009, the Secretary shall establish an independent advisory
            committee, to be known as the `USDA Greenhouse Gas Emission
            Reduction and Sequestration Advisory Committee', to provide
            scientific and technical advice on establishing, implementing,
            and ensuring the overall environmental integrity of an offset
            program for domestic agricultural and forestry practices that
            reduce or avoid greenhouse gas emissions, or sequester
            greenhouse gases.
                ``(2) Membership.--The Advisory Committee shall be
            comprised of nine members, including a chairperson and vice-
            chairperson, appointed by the Secretary. Each member shall be
            qualified by education, training, and experience to evaluate
            scientific and technical information for domestic agricultural
            and forestry offset practices that reduce or avoid greenhouse
            gas emissions or sequester greenhouse gases.
                ``(3) Terms.--Terms shall be 3 years in length, except for
            the initial terms, which may be up to 5 years in length to
            allow staggered terms. Members may be reappointed only once for
            an additional 3-year term, and such term may follow directly
            after a first term.
                ``(4) Duties.--The Advisory Committee shall--
                        ``(A) provide options and recommendations, not
                    later than 180 days after the date of the enactment of
                    the American Clean Energy and Security Act of 2009, to
                    the Secretary regarding the establishment of
                    methodologies as described in section 504 of such Act,
                    taking into account relevant scientific information,
                    including--
                                ``(i) the availability of representative
                            data for use in developing an activity baseline
                            for a land area, forest, soil, industry sector,
                            and facility type;
                                ``(ii) the potential for accurate
                            quanitification of greenhouse gas reduction, or
                            sequestration for an offset practice type;
                                ``(iii) the potential level of scientific
                            and measurement uncertainty associated with an
                            offset practice type; and
                                ``(iv) the use of practice methodologies
                            that account for common practice or other
                            direct comparisons within a relevant land area,
                            industry sector, forest, soil, or facility
                            type;
                        ``(B) make available to the Secretary options and
                    recommendations for the program as a whole and on
                    offset methodologies for each practice type that should
                    be considered under regulations promulgated pursuant to
                    section 504 of the American Clean Energy and Security
                    Act of 2009, including methodologies to address the
                    issues of additionality, activity baselines,
                    measurement, leakage, including the application of
                    sector specific leakage factors, uncertainty,
                    permanence, and environmental integrity;
                        ``(C) make available to the Secretary advice and
                    comment on areas where further knowledge is required to
                    appraise the adequacy of existing, revised, or proposed
                    methodologies and describe the research efforts
                    necessary to provide the required information;
                        ``(D) make available to the Secretary advice and
                    comments on other ways to improve or safeguard the
                    environmental integrity of the offset practice types
                    listed under section 503 of the American Clean Energy
                    and Security Act of 2009; and
                        ``(E) provide options and recommendations regarding
                    new practice types.
                ``(5) Scientific review of offset program.--Not later than
            January 1, 2017, and at 5-year intervals thereafter, the
            Advisory Committee shall--
                        ``(A) submit to the Secretary and make available to
                    the public an analysis of relevant scientific and
                    technical information regarding agricultural and
                    forestry offset practices that reduce or avoid
                    greenhouse gas emissions or sequester greenhouse gases;
                        ``(B) review approved and potential practice types,
                    methodologies, scientific studies, offset project
                    monitoring, offset project verification reports,
                    reporting of reversals, audits related to the offset
                    program, and other relevant information needed to
                    evaluate the offset program;
                        ``(C) evaluate the net emission effects of
                    implemented offset projects; and
                        ``(D) recommend changes to offset methodologies,
                    procedures, practice types, or the overall program to
                    ensure that--
                                ``(i) the offset practices result in
                            reduced or avoided greenhouse gas emissions or
                            sequestration of greenhouse gases;
                                ``(ii) the offset credits issued by the
                            Secretary do not compromise the integrity of
                            the annual emissions reductions established
                            under section 703 of the Clean Air Act; and
                                ``(iii) the offset program avoids or
                            minimizes adverse affects to human health and
                            the environment.
                ``(6) Coordination.--To avoid duplication, the Advisory
            Committee shall coordinate its activities with those of any
            other Federal advisory committees working in related areas, and
            shall to the maximum extent possible use research data and
            services of the research, education, extension agencies of the
            Department of Agriculture.
                ``(7) Consultation.--On a periodic basis, the Advisory
            Committee shall consult with, and be informed by the views of,
            the Offsets Integrity Advisory Board established under section
            731 of the Clean Air Act.
                ``(8) Meeting.--The Advisory Committee shall meet on at
            least a quarterly basis each year.
                ``(9) Administrative support and funding.--The Secretary
            may provide such administrative and funding support as
            necessary to enable the Advisory Committee to carry out its
            duties under this section.
                ``(10) Report.--For each fiscal year, the Secretary shall
            submit to Congress a report on--
                        ``(A) the status and progress on the offset
                    practices;
                        ``(B) the general status of cooperation and
                    research and development; and
                        ``(C) the plans for addressing future issues and
                    concerns.''.

                           Subtitle C--Miscellaneous

    SEC. 551. INTERNATIONAL INDIRECT LAND USE CHANGES.

        Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended
    by adding at the end the following
                ``(13) International indirect land use changes.--
                        ``(A) Exclusion from regulatory requirements
                    regarding lifecycle greenhouse gas emissions.--
                    Notwithstanding the definition of `lifecycle greenhouse
                    gas emissions' in paragraph (1)(H), for purposes of
                    determining whether the fuel meets a definition in
                    paragraph (1) or complies with paragraph (2)(A)(i), the
                    Administrator shall exclude emissions from indirect
                    land use changes outside the renewable fuel's
                    feedstock's country of origin.
                        ``(B) National academies of science report.--(i)
                    Not later than 6 months after the date of enactment of
                    this paragraph, the Administrator and the Secretary of
                    Agriculture shall jointly arrange for the National
                    Academies of Science to review and report on specified
                    issues related to indirect greenhouse gas emissions
                    related to transportation fuels.
                        ``(ii) The report shall evaluate and report on
                    whether there are economic and environmental models and
                    methodologies that individually, or as a system, can
                    project with reliability, predictability, and
                    confidence--
                                ``(I) for purposes of determining whether
                            the fuel meets a definition in paragraph (1) or
                            complies with paragraph (2)(A)(i), indirect
                            land use changes that are related to the
                            production of renewable fuels and that may
                            occur outside the country in which the
                            feedstocks are grown, and the impacts of these
                            changes on greenhouse gas emissions; and
                                ``(II) indirect effects, both domestic and
                            international, related to the production and
                            importation of non-renewable transportation
                            fuels that have significant greenhouse gas
                            emissions, and the impact of these effects on
                            greenhouse gas emissions.
                        ``(iii) The report shall include a review and
                    assessment of all pertinent scientific studies,
                    methodologies and data, shall evaluate potential
                    methodologies for calculating such emissions (including
                    an evaluation of methods for annualizing emissions
                    associated with forest degradation or land conversion),
                    and shall make appropriate recommendations. The
                    recommendations shall address indirect effects, both
                    domestic and international, related to the production
                    and importation of non-renewable transportation fuels
                    that have significant greenhouse gas emissions. The
                    report shall use appropriate validation procedures,
                    including sensitivity analyses, of how results change
                    as assumptions change. The evaluation shall include for
                    a model, a methodology, or a system of models--
                                ``(I) an assessment of how reliably the
                            models, methodologies, or systems track actual
                            outcomes over historical periods using
                            available historical data; and
                                ``(II) an assessment of how reliably the
                            models, methodologies or systems will project
                            future outcomes.
                        ``(iv) The report shall be publicly available and
                    shall include sufficient information and data such that
                    economists and other scientists with relevant expertise
                    that are not on the National Academies of Science panel
                    can fully evaluate the conclusions of the report.
                        ``(v) The report shall be completed within 3 years
                    of the date of enactment of this paragraph.
                        ``(C) Determination.--(i) The Administrator and the
                    Secretary of Agriculture shall, after notice and an
                    opportunity for public comment, determine whether, for
                    purposes of determining compliance with the percent
                    reductions in lifecycle greenhouse gas emissions
                    specified in paragraph (1) for various renewable fuels,
                    scientifically valid models and methodologies exist to
                    project indirect land use changes that are related to
                    the production of renewable fuels and that occur
                    outside the country in which the feedstocks are grown,
                    and the impact of these changes on greenhouse gas
                    emissions.
                        ``(ii) The determination shall take into account
                    the findings and recommendations of the report required
                    under subparagraph (B), as well as other available
                    scientific, economic, and other relevant information.
                    The Administrator and the Secretary may also consider
                    methods used by the Environmental Protection Agency,
                    the Department of Agriculture, and other Federal
                    agencies to assess or guide their related policies.
                        ``(iii) The Administrator and the Secretary of
                    Agriculture shall publish a proposed determination not
                    later than 4 years after date of enactment of this
                    paragraph, and shall publish a final determination not
                    later than 5 years after date of enactment of this
                    paragraph. An explanation and justification of the
                    determination shall be included in the proposed and
                    final actions, together with a response to comments
                    received.
                        ``(D) Response to determination.--(i) In the event
                    of a positive determination under subparagraph (C), the
                    Administrator and the Secretary of Agriculture shall,
                    after notice and an opportunity for public comment, by
                    the same date jointly establish a methodology (or
                    methodologies) to calculate greenhouse gas emissions
                    from indirect land use changes that are attributable to
                    the production of renewable fuels and that occur
                    outside the country in which feedstocks are grown for
                    purposes of calculating a renewable fuel's lifecycle
                    greenhouse gas emissions to determine whether the fuel
                    meets a definition in paragraph (1) or complies with
                    paragraph (2)(A)(i). The exclusion in subparagraph (A)
                    shall end, and the Administrator shall issue a
                    regulation by the same date that shall include
                    emissions from indirect land use changes outside the
                    renewable fuel's feedstock's country of origin for
                    purposes of calculating a renewable fuel's lifecycle
                    greenhouse gas emissions to determine whether the fuel
                    meets a definition in paragraph (1) or complies with
                    paragraph (2)(A)(i) for renewable fuels sold in the
                    calendar year following the year of the positive
                    determination. The effective date of the regulation
                    shall be 6 years after the date of enactment of this
                    paragraph.
                        ``(ii) A negative determination under subparagraph
                    (C) shall include a statement of the basis for the
                    determination.
                        ``(E) Accountability.--The joint duties and actions
                    of the Administrator and the Secretary of Agriculture
                    shall be subject to sections 304 and 307 of this Act as
                    if they were the duties and actions of the
                    Administrator alone.''.

    SEC. 552. BIOMASS-BASED DIESEL.

        Section 211(o)(2)(A) of the Clean Air Act (42 U.S.C. 7545(o)(2)(A))
    is amended by adding at the end the following new clause:
                                ``(v) Grandfathering biomass-based
                            diesel.--The Administrator shall promulgate
                            regulations exempting from the lifecycle
                            greenhouse gas requirements in subparagraphs
                            (B) and (D) of paragraph (1) up to the greater
                            of 1 billion gallons or the volume mandate
                            adopted pursuant to subparagraph (B)(ii) of
                            biomass-based diesel annually from facilities
                            that commenced construction before the date of
                            enactment of the Energy Independence and
                            Security Act of 2007.''.

    SEC. 553. MODIFICATION OF DEFINITION OF RENEWABLE BIOMASS.

        (a) National Academy of Sciences Report.--Not later than 1 year
    after the date of enactment of this Act, the Administrator of the
    Environmental Protection Agency, the Secretary of Agriculture, and the
    Federal Energy Regulatory Commission shall jointly arrange for the
    National Academy of Sciences to evaluate how sources of renewable
    biomass contribute to the goals of increasing America's energy
    independence, protecting the environment, and reducing global warming
    pollution.
        (b) Modification.--
                (1) EPA modification authority.--After reviewing the report
            required by subsection (a), the Administrator of the
            Environmental Protection Agency, in concurrence with the
            Secretary of Agriculture, may, by regulation and after public
            notice and comment, modify the non-Federal lands portion of the
            definition of ``renewable biomass'' in sections 211(o)(1)(I)
            and 700 of the Clean Air Act in order to advance the goals of
            increasing America's energy independence, protecting the
            environment, and reducing global warming pollution.
                (2) FERC modification authority.--After reviewing the
            report required by subsection (a), the Federal Energy
            Regulatory Commission, in concurrence with the Secretary of
            Agriculture, may, by regulation and after public notice and
            comment, modify the non-Federal lands portion of the definition
            of ``renewable biomass'' in section 610 of the Public Utility
            Regulatory Policies Act of 1978 in order to advance the goals
            of increasing America's energy independence, protecting the
            environment, and reducing global warming pollution.
        (c) Federal Lands.--
                (1) Scientific review.--The Secretary of the Interior, the
            Secretary of Agriculture, and the Administrator of the
            Environmental Protection Agency shall conduct a joint
            scientific review, within 1 year after the date of enactment of
            this Act, to evaluate how sources of biomass from Federal lands
            could contribute to the goals of increasing America's energy
            independence, protecting the environment, and reducing global
            warming pollution.
                (2) Modification authority.--Based on the scientific
            review, the agencies may, by rule, modify the definition of
            ``renewable biomass'' from Federal lands in sections
            211(o)(1)(I) and 700 of the Clean Air Act and section 610 of
            the Public Utility Regulatory Policies Act of 1978 as
            appropriate to advance the goals of increasing America's energy
            independence, protecting the environment, and reducing global
            warming pollution.

                Passed the House of Representatives June 26, 2009.

                Attest:

                                                                     Clerk.
    111th CONGRESS

      1st Session

                                   H. R. 2454

    _______________________________________________________________________

                                     AN ACT

    To create clean energy jobs, achieve energy independence, reduce global
          warming pollution and transition to a clean energy economy.